Multifamily value-add deal in Atlanta, GA.
10 of the 86 units were burnt out in a fire and the current owner claimed from insurance and did not repair the property. Since then, the property has been completely mismanaged with water leaks going unrepaired for over a year, the grounds completely unkempt and in general just in a very sad state.
The area it's situated in is an upper C Class, lower B Class neighbourhood with other properties being upgraded and rental demand consistently driving rental rates up.
By running a comprehensive rehab programme to bring the 10 units back online and upgrade interiors of the existing units on lease renewal, we can push rents up. Once the renovations are done, the exterior cleaned up and painted and the unnecessarily high expenses brought back in line by installing individual water meters, fixing all the leaks and transferring the cost of electricity to the tenants, we can boost Net Operating Income to over $450,000.00 per year within the next 2-3 years.
There will be no cashflow distributions in the first year as we roll out the project plan, but we expect to be able to start paying cashflow in the 2nd year of holding, however, this project is not our usual CASHFLOW investment. This project is an aggressive CAPITAL GROWTH opportunity where we have significant upside on sale within 24 months. However, once the project plan is complete, we expect to be distributing over 10% cash on cash returns, so our downside is protected should we be in a position where we hold the property.