Appelman Capital

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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:

  1. Repair/Replace Damaged and Missing Soffit
  2. Install Border Accent Trim on Buildings
  3. Paint Exterior Brick with Sherwin Williams Super Paint
  4. Replace Landscaping
  5. Install New Re-branded Entrance Sign
  6. Roof Repairs
  7. Concrete Repairs
  8. Remove Satellite Dishes
  9. Remove Abandoned Vehicles

Interior Renovations:

  1. New Designer Plank Flooring
  2. Cabinet Replacement/Painting
  3. Replace Shower Mixing Valve
  4. Replace Shower Surround
  5. Replace Toilet, Vanity, Mirror
  6. Black Hardware Package
  7. Black Knob & Hinge Package
  8. Black Designer Lights with LED Bulbs
  9. Granite Countertops, Undermount Sink, Designer Plumbing Fixture
  10. New Appliance Package
  11. New Blinds
  12. Replace Heater Covers

Key Success Factors:

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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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