sir john's apartments
PURCHASE PRICE $655,000, SALE PRICE $1.1 million
Unit Mix: 2 BR, 1 BA
Number of Units: 14
Building Size: 11, 340 SqFt
Lot Size: 0.89
Acre Year Built: 1967
Sought after area (85018 East Phoenix Zip Code)
Moderate risk – strong area, no major renovation needed.
Large bedrooms, appealing floor plans.
All units tiled throughout with ceramic tiles
Old roof was replaced during escrow (leveraging error by broker of previous owner, $50,000 value)
Significant upside potential in rent increase
No major renovation was performed.
- Bring rent to at least par with submarket average ($650 at purchase)
- Terminate property manager, recover costs
- Apply strict screening procedures and higher security deposit requirements
- Market to higher profile tenants especially healthcare workers in the nearby Phoenix Children Hospital
Within 3.5 years we successfully increased occupancy by 20%, increased property value by 68%, and delivered unlevered IRR of 23% to the investor.
Purchased August 2012
Purchase Price $655,000 (all cash)
Price per Door - $46,785
Price per SqFt - $57.76
Avg. Rent at Purchase - $600/Mo.
Occupancy Rate - 79%
Sold in March 2016
Sale Price - $1,100,000
Rent Increased to $825/Mo. (highest)
Occupancy Increased to 95%
Unlevered IRR - 32%
Trailing 12 prior to sale, Cash-on-Cash - 13.74%