How We Created $3,276,342 In Equity Within Just 18 Months?
The project exemplifies a remarkable transformation of a D-class property in a B-class area, resulting in the creation of $3,276,342 in equity within just 18 months. This achievement was not a stroke of luck but rather the product of careful planning, efficient execution, and a commitment to creating a desirable living environment. Let’s dive into the details.
Property Overview:
– Initial In-place Rents: $28,005
– Current Market Rent: $53,546
– Monthly Revenue Increase: $19,112 ($229,344 annually)
– Average Rental Rate Increase: $425
Renovation Scope:
Exterior Renovations:
- Repair/Replace Damaged and Missing Soffit
- Install Border Accent Trim on Buildings
- Paint Exterior Brick with Sherwin Williams Super Paint
- Replace Landscaping
- Install New Re-branded Entrance Sign
- Roof Repairs
- Concrete Repairs
- Remove Satellite Dishes
- Remove Abandoned Vehicles
Interior Renovations:
- New Designer Plank Flooring
- Cabinet Replacement/Painting
- Replace Shower Mixing Valve
- Replace Shower Surround
- Replace Toilet, Vanity, Mirror
- Black Hardware Package
- Black Knob & Hinge Package
- Black Designer Lights with LED Bulbs
- Granite Countertops, Undermount Sink, Designer Plumbing Fixture
- New Appliance Package
- New Blinds
- Replace Heater Covers
Key Success Factors:
- Cost-Efficient Procurement:
– Appelman Capital’s ability to procure labor and materials at a cost basis played a crucial role in the project’s success. Cost-effective sourcing contributed to maximizing returns on investment.
- In-House Project Management:
– Instead of relying on third-party property management or general contractors, Appelman Capital took charge of project management. This decision streamlined operations, reduced costs, and ensured close alignment with project goals.
- Strategic Property Acquisition:
– The property was strategically acquired at the right price. The team avoided overinflated pricing and assessed the potential of the property meticulously.
- Internal Property Management:
– Two third-party property management companies were replaced by an in-house management team. Effective communication and ethical practices were prioritized, enhancing tenant satisfaction and trust.
- Diligent Execution:
– Appelman Capital executed a well-defined business plan with precision. The team actively worked to make the property a desirable place to live, rather than relying solely on market appreciation.
Conclusion:
The transformation of this D-class property in a B-class area into a thriving asset generating $3,276,342 in equity within 18 months is a testament to Appelman Capital’s strategic vision, hands-on approach, and commitment to creating value. This case study demonstrates that success in multifamily real estate investment requires more than luck; it demands careful planning, effective execution, and a relentless focus on creating desirable living spaces for tenants.
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