The Montana - Summerville (Charleston) SC

[Josh Eitingon]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $3,900,000
Cash invested: $1,222,000

The Montana was developed in 1974 and remained in the developer’s family up until DXE’s acquisition in 2018. The property is well located in a burgeoning submarket of Charleston. The original developer’s son was managing the property himself. They maintained near 100% occupancy with average rents significantly below market.

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

Extremely strong and growing location. Strong property management presence in place.

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

The project was sourced by DXE’s property manager who had been building the relationship with the seller’s family for years prior. DXE needed to overcome a seller that was very difficult to work with. By leveraging their team and moving quickly with aggressive terms, DXE was able to get the property in contract and closed in March of 2018.

How did you finance this deal?

Bridge

How did you add value to the deal?

Within 12 months of ownership average effective rents increased over 47%.

What was the outcome?

The combination of proven upgrades and additional upside through turnover will allow DXE to increase average rents over 65% in 36 months from takeover. Well capitalized, with patient equity, and in an upward trending location DXE will execute a refinance into an agency loan product. The plan is to hold for 7 to 10 years with an exit comfortably projected at 20%++ IRR.