Eastpointe Apartments - 20 Unit Value Add Acquisition

[Ben S.]

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $1,200,000
Cash invested: $350,000

The Eastpointe Apartments is a 20-unit multifamily community located in Eastpointe, Michigan. The sponsor acquired this asset with below market rents in place, and immediately commenced a strategic rent increase program. The net operating income has been increased and the property is on track for a cash out refinance, returning a large portion of investor equity.

What made you interested in investing in this type of deal?

This was a stable asset with room to increase value through strategic rent increases. The tenant base is solid and collections are strong. The property is clean and well-maintained.

How did you find this deal and how did you negotiate it?

This deal came to us off market and we were able to quickly negotiate terms with the seller.

How did you finance this deal?

We financed this deal with a combination of sponsor/LP equity and a conventional bank loan. The property is scheduled to be refinanced with agency debt once the value add process is complete.

How did you add value to the deal?

Increased rents to market rates.

What was the outcome?

Refinance is anticipated in Q2 2022.