Estimated Mortgage Payment $1571.71
(20% down with a rate of 5.5%)
Rents Year 1:
$1,400.00
Rents Year 3:
$1,575.00
Rents Year 5:
$2,000.00
Rents Year 10:
$2,600.00
Apartment Value Add
Lyndhurst Terrace
Acquisition Date:
6/24/2013
Acquisition Price:
$910,000.00
Per Unit Price:
$60,666.00
Disposition Date:
8/31/2015
Disposition Price:
$1,500,000.00
Per Unit Price:
$93,750.00
Obstacles
Ineffective onsite
Outdated Paperwork
Weak tenant base
Poor Screening
Low curb appeal
Poor reputation
Deferred maintenance
Widespread culture problems, no adherence to rules
Underutilized space
The Opportunity
The property was poorly managed, residents were not following lease provisions which was driving away
good tenants, there was a lot of deferred maintenance and the paperwork on file was unorganized,
out of date and weak. This building could be repositioned from a class C building to a class B
building by improving day to day operations and addressing deferred maintenance.
Strategy
Start with implement new screening criteria, collect larger deposits and improve the look and feel of
the common areas. Next we updated all paperwork and begin strict enforcement of the lease. Existing
residents could either decide to comply with the new terms or move. These steps would improve
the curb appeal and reputation of the building. This would then allow the owner to update units
and increase rents.
Reposition and Value Add - Multifamily
Pacific Court Apartments
Acquisition Date:
1/30/2015
Acquisition Price:
$1,900,000.00
Per Unit Price:
$67,857.00
Disposition Date:
6/5/2017
Disposition Price:
$3,265,000.00
Per Unit Price:
$116,607.00
Price Difference:
$1,365,000.00
Obstacles
Ineffective onsite
Instability in Management - 5 companies in 3 years.
Outdated Paperwork
Weak tenant base
Poor Screening
Low curb appeal
Poor reputation
Deferred maintenance
Design flaws
Unauthorized occupants
Widespread culture problems, no adherence to rules
The Opportunity
The existing onsite manager was failing to do their job. They had forged relationships with many of the
residents that blurred the lines between professional and friendship which limited their ability
to be objective and fair. In several cases units had unauthorized occupants who were harassing
their neighbors and were being destructive to the units they occupied. Deferred maintenance had
piled up over the years to the point where roughly 20% of the units had mold problems. The property
was situated off of a busy street and due to it’s layout encourage non-residents to walk through
the common areas. This led to homeless people regularly breaking into the laundry area to sleep
and using the common areas as their restroom.
Strategy
Remove the existing onsite and retain a new one. Immediately remediate mold. Update paperwork with all
residents to give management more leverage. Strictly enforce the lease and take steps to eviction
any unauthorized occupants who are unwilling to volunteerly apply. Each building had two floors
and as a result two floating staircases. Removing one staircase from each building would prevent
non-residents from using the building premises as a shortcut and reduce trespassing. Implement
a no pet policy and no smoking policy to reduce damage in units. As residents vacated or were
evicted, units would be renovated and rents increased.
