Investor Sees 15% Cash-on-Cash Return
The Situation
We assisted a client in purchasing a 27 unit apartment complex which was a diamond in rough. The property had been on the market at $1,395,000 and was in need of an exterior rehabilitation.
The Buyer bought the property with the intention of adding new roofs, exterior siding, paint, and improving the landscaping.
Our Approach
We were able to assist the Buyer in negotiating a loan where the lender based the value on “as-completed” value, and held the improvement money in an escrow holdback account.
My client felt that this was sweet deal because the final value came in $100,000 above what we had estimated for the completed value. Their cash-on-cash return was over 15%.
The property now has no deferred maintenance, a strong tenant base, and is managed by a professional property manager and is providing a solid stream of passive income for the Buyer.
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