We opportunistically acquire moderate to high risk investment grade properties where opportunities are available to improve the condition, operations and performance of the investment. Depending on the underlying property criteria, we either buy & hold as cash flow rentals, or we fix & flip (rehab/sell) the property.
Example of a value-add project
Example of a value-add 3 family project that we purchased, and then sold as we approached year 3 of holding (29 months). We were able to implement better management, increase rents by 20-30% per unit, improve the condition of the units, and significantly increase the Net Operating Income, which, more than doubled the sale price in less than 3 years, all while enjoying a steady stream of monthly cash flow.
2104 Purchase price: $56,500 (Acquired with 25% down payment + Closing costs, approx $17,900)
2014-2017 Value-add Improvements: $8,500
2014-2017 Net Cash Flow (Paid in monthly distributions): $43,000
2017 Sale Price: $125,000
2017 Sale Price Difference ($68,500) + Initial 25% Down Payment ($14,125) + Equity Pay-down ($2,300) = $84,925
2014-2017 Cash Out of Pocket: $26,400
2014-2017 Profit: $82,625 (Sale) + $43,000 (Cash Flow) = $125,625
29 Month Cash-on-Cash return: 475.85%