Our apartments located in St. Petersburg Florida comprises 170 “fractured condo” units in a plantation style development of 240 units total. We purchased this project in September of 2010 for a purchase price of 4,167,000. This project needed renovation in many of the units and common areas, all which have been completed. We added washer and dryer hookups to the units and replaced the stair wells throughout as well as upgrading and updating each unit as needed.
Before purchasing the project we completed extensive due diligence and market research on the area and determined this market to have very favorable rental conditions. Since purchasing the project, Marcus & Millichap, CB Richard Ellis and other multi-family forecasts have projected positive rental growth through out the region.
Our expectations before purchasing the property, were to stabilize occupancy, filling the vacancies in the project in less than twelve months. Rental demand for our units has been robust. We are ahead of schedule and 10% above projected rents! Additionally, we were also to decrease the property taxes by 10%.
At an 8% cap rate, the expected Net Operating Income will support a sales price of around 13,000,000.