In November of 2018 we purchased The Palm on Ray, a 16-unit multifamily property for $1,780,000. For the acquisition, we secured a 2-year, interest-only bridge loan at 7.5% interest. We received $1,575,000 in loan proceeds which included $172,000 for renovations or an average of $10,750 per unit. Average rents at acquisition were $772 and our initial projections were to achieve $1,000 after renovations.
We ended up achieving over $1,050 per month for fully renovated units and $900 per month for partially renovated units. By pivoting to this blended renovation plan, we were able to beat our initial projections while fully renovating only half of the units; this left plenty of value-add opportunity for the next owner.
We made the determination to sell this asset just before the COVID-19 pandemic was in full swing. We closed on July 1, 2020 after holding this asset for 19 months and made investors a 65% net return on their investment.
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