Boise Bench Investor Hits It Big (Real Client Success Story) by Gregg Davis
Our client purchased a property we located that was—a for sale by owner—that was in need of some TLC. The bones were good. Large 2 bedroom units with washer and dryer and 1 car garages for each unit built in the ‘60’s. Brick facades, hardwood floors, and nice culdesac location which backed up to a park. Prior to buying the property, the rental rates were $675-750 and none of the units had been updated in many years. We saw the potential and cast the vision for our client. We were able to negotiate a $250k price reduction with the Seller and closed late in 2017. With our property management team and maintenance team, we quickly went to work and as leases ended, we renovated units with an average investment of around $17k per unit and a new roof on the building.
Now, those units that back up to the park have sliding glass doors that let residents enjoy the park as if it was their own back yard and let in tons of light to show off the updated finishes inside. Those same units now rent for $1,200+. The increased rent of $500 per month equates to approximately a 3 year return on investment for the cash invested in the unit renovations. We are nearly through the renovations of all units in approximately 14 months since the purchase. The value of the building is now approximately $400k more than the total invested by the client. That is nearly half a million dollars of forced appreciation. The client could refinance, pull out most of that equity and do it all again! What’s the point? With the right team—one that knows the market rents, can manage the renovations and estimate the costs associated with those repairs, you can buy a property and add value, force appreciation, and grow your net worth. Our team at Commercial Northwest Property Management and KW Commercial, our brokerage arm, can help you find those neighborhoods that harbor potential gems, help you negotiate and purchase the property, manage the renovation and lease the units at the increased rates to create and grow your property value and in turn your net worth.
Contact us today to see how we can help you!