ADDRESS | PURCHASE DATE | SALE DATE | AVG. RENT AT PURCHASE |
|---|---|---|---|
111 SW Madison Cir. N, St. Petersburg | 11/2017 | 12/2019 | $565 |
AVG. RENT AT SALE | RENT INCREASE | NOI | IRR REALIZED |
|---|---|---|---|
$920 | 63% | 56% | 35% |
Past performance and statements regarding earnings are no guarantee of future results.
At a glance
111 SW Madison Cir. N, St. Petersburg | |
|---|---|
Purchase Date | 11/2017 |
Sale Date | 12/2019 |
Avg. rent at purchase | $565 |
Avg. rent at sale | $920 |
Rent increase | 63% |
NOI | 56% |
IRR realized | 35% |
Why we invested
“Madison at Fourth” comprising of 21 apartments was Whitestone’s second project. While we are primarily focused on great investments to create great homes, in this project we also relieved an overburdened owner.
Opportunities and challenges
- The premises had not been maintained for a long period of time. The decay was so advanced that some apartments could not even be rented out anymore.
- The present tenants were left discouraged and frustrated by their former landlord, thus treating the premises with little respect also.
- Because of the lax management, payment practice had also lowered over time, burdening the low cash flow even more, giving us the opportunity to part ways with conflicting tenants.
- The owner was ready to sell the premises on progress payment with an owner financing, allowing us to only refinance a fraction of the asking price, recouping the unpaid balance while and by improving the housing estate.
- Our analysis conducted that severe investing would be needed to renovate the building’s face and roof as well as the apartments themselves but that the estimated rent increases would outweigh these investments by far.
Results
After becoming familiar with the tenants, we were able to establish our common goal to create a better place to live for everyone involved and embarked the voyage to a “new Madison” together.
The facade was renewed and the roofs were rebuilt in their entirety.
We also renovated every single inhabited and vacant apartment within a few months, thus assuring that renting out could start as early as possible. That was another opportunity to proof to ourselves our ability to act very quickly whenever needed.
We also installed a new fire alarm system in increase the overall feeling of safety.
We and our investors were very pleased with our results in rent increases as well as the sale price two years after our acquisition. This encouraged us further to apply our concept to more and larger projects.
