Our Boston Woods investment was located a short 10 min drive from the Medical Center in San Antonio, TX at Intersection 110 and Loop 410. We were able to find this deal using an off-market strategy, reaching out to the sellers directly. Using an off-market strategy in procuring a deal can help make it a more advantageous investment. It is comprised of 174 originally split into 3 locations: FKA Cumberland, Villa Madrid, and Westchester. Constructed originally in 1970, 1974, and 1984 respectively. We combined the three properties into one – Boston Woods.
Purchasing deals at the market cap rate can be a great investment as long as there is a value-add component, which in this case there clearly was. Our decision to merge the three properties into one not only streamlined this property- but was a huge marketing advantage as well.
Acquisition
- Purchased in November 2016, 6.51% cap rate
- Cash out of pocket: $3.76 million
- Initial Financing: $4.66 million at 4.61%
- Capital Repairs: $1.52 million
Purchasing deals at the market cap rate can be a great investment as long as there is a value-add component, which in this case there clearly was. Our decision to merge the three properties into one not only streamlined this property- but was a huge marketing advantage as well.
How Did We Find the Deal?
Off Market Strategy
- Using text blast campaign to Sellers.
- Negotiated with Sellers for almost 8 months.
- Sellers are partners with bad relationships.
- Sellers are sophisticated Land developers/brokers
Learn to Find Deals using an Off-Market Strategy
Previous Management Marketing Issue
Top three Largest PM companies in San Antonio
- Right strategy Managing Three Properties as One
- Horrible marketing with phone greetings with 3 different names.
We increased rental income from $.75/sq. foot to $.92/sq. foot. We utilized multiple crews for the rehab, implementing a partial rehab plus full rehab strategy to slow resident turnover and keep tenant occupancy up throughout the process.
We spent $1.3 million within 12 months of acquiring this property with a total budget of $1.5 million. It’s important to pump capital into the property ASAP to increase valuation. By doing this we were able to quickly convert $1.3 million cash in the bank to $75k NOI – a 50% increase.
At the end of this project:
- We increased rent by $130 per door
- Reduced expenses from 67% to 48%
- NOI increase of 86%- with a value increase from $6.9 mil to $13 mil
- Cash flow increased 7/8% based on the initial investment
- Altogether an INCREDIBLE 117% return from Initial Investment!
