Co-Living Ground-Up Development

[Jay Chang]

Investment Info:

Small multi-family (2-4 units) commercial investment investment.

Purchase price: $3,800,000
Cash invested: $320,000

A 3-story co-living ground-up project with (32) rooms in Hollywood/Silverlake area. 10-minute walk from the LA metro. This project is currently in construction and will finish in Q3 next year

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

This is our ground-up project with our own construction team. We purchased this lot almost a year ago because of its location. It's very close to the Hollywood/Sunset metro station and the hospitals. We expect 50%+ IRR on the project level and 30% IRR for our limited partners

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

We found this lot through a local broker.

How did you finance this deal?

We bought the lot with cash and financed the construction with a construction loan.

How did you add value to the deal?

design development and currently construction.

What was the outcome?

Currently still in construction

Lessons learned? Challenges?

1) We did some design adjustments towards the end of the design phase to give the co-living rooms more privacy.

2) This lot is sloped and requires retaining wall. Slot cutting will take a long time, so we are hoping that we can finish the foundation before the rainy season starts.