All Forum Posts by: Mike Ballard

Investment Info:

Large multi-family (5+ units) fix & flip investment.

Purchase price: $1,450,000
Cash invested: $525,000

Camino 2630, formerly Sherwood Pines, is a 60-year-old, 20-unit multi-family complex located in downtown Las Vegas, NV. The property is just a short distance from the Westgate Las Vegas Resort, The Strat, Resorts World, & the Fashion Show Mall.

We also received news coverage about improving the neighborhood and this property was the before renovation example in the television report found here: https://news3lv.com/news/local/central-valley-apartments-to-get-renovated-by-new-development-team

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

We owned 5 properties in the area that were achieving increased rents after improvements. This property was in disrepair-5 of the 20 units were uninhabitable with holes in the ceilings and walls, non-functioning air conditioning units, appliances and toilets, and broken windows and doors.

We were projecting more than 50 percent rent growth from current rents due to our knowledge of the area from our ownership of the properties in the area that have achieved similar rents and high occupancy.

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

Off market deal through a broker who knew we could close in a short time.

How did you finance this deal?

Debt fund and syndicated equity (11 investors invested $25,000 to $75,000) of $525,000. We secured acquisition financing at 75 percent loan to cost at seven percent (7%) interest. This lender also agreed to finance 100 percent of the renovation costs.

We forecasted to investors that the hold period would be five years, and that for every dollar invested they would receive approximately $0.69, and the estimated internal rate of return would be 16.1 percent (annualized return.)

How did you add value to the deal?

After acquisition, improvements began immediately. We projected the complete rehabilitation would take 15 to 18 months. While rehabilitation of the property was ongoing to improve curb appeal, we also changed the management style of the property.

Challenging tenants were also weeded out, while marketing for the complex was improved.

We were able to increase rents to improved market rates for the area, adding about $300 per month per unit or 45 percent.

What was the outcome?

On June 30, 2023, less than two years after acquisition, we successfully sold the property for $2.3 million, or $115,000 per door. Investors received an annualized return (IRR) of 23.5 percent and for each dollar invested they received their initial investment back plus $0.57.