Levered IRR - 62.77% | Equity Multiple 2.80x | Asset Appreciation - 67%
Unit Mix: 1 BR, 1 BA (2) and 2 BR, 2 BA (9)
Number of Units: 11
Building Size: 8,989 SqFt
Lot Size: 0.76
Acre Year Built: 1960
- Evict delinquent tenants
- Complete rebranding and renovation of property:
- New brand name and signage
- Complete exterior overhaul, including new accent colors, re-paving, flood repair, and desert landscaping (reducing utility costs)
- Contemporary, elegant interior design
- Electric car gates
- Market to young professionals
- Single story garden-style apartment community
- Located in a desirable city block with three other properties acquired and managed by Red Rock Equities
- Potential to reduce management costs and services by treating property as a combined unit complex
- Growing submarket (demonstrated by increase in occupancy levels above those of the metropolitan area)
- Significant Value-Add/Reposition potential through extensive renovation
- Opportunity to purchase at a fraction of replacement cost
Desert Jewel was fully operating and stabilized 9.5 months following its acquisition with impressive rental rate increases of up to 20% over the previous owner average rent. The specific submarket rental rate has increased by only 8% over the same period.
We continued operating the building and increasing rent for another year, achieving rental rate increases of up to 36% over the previous owner average.
Cash-on-Cash return for the last 12 trailing months of our ownership was 22.90%.
Desert Jewel was sold in January 2016 for $795,000, reflecting a Levered IRR of 62.77% to our investors, and an Equity Multiple of 2.80x to their initial investment over two years.
Purchased December 2013
Purchase Price $475,000
Price per Door - $43,182
Price per SqFt - $52.84
Avg. Rent at Purchase - $583/Mo.
Occupancy Rate - 90.9%
Renovations - $11,790
Total Investment - $146,790
Sold in January 2016
Sale Price - $795,000
Rent Increased to $795/Mo. (highest)
Occupancy Increased to 100%
Unlevered IRR - 62.77%
Trailing 12 prior to sale, Cash-on-Cash - 22.9%