6685 SW 12th Street, Sherwood, OR
6685 SW 12th Street, Sherwood, OR
Our client’s experience was a prime example of a seller taking prime advantage of the market. A long-time apartment owner, they recently sold the largest asset in their portfolio (a 29-unit building in Los Angeles’ Westlake neighborhood).
Being involved in a 1031 exchange, they now had to identify their “upleg” property. Our client wanted an investment that could provide income during their retirement and eventually be passed on to their children.
Strategy:
With an apartment market flooded with buyers, low cap rates, and minimal inventory, we decided it would be best to exchange into a single-tenant net leased property to yield a higher return on investment (and zero management responsibility).
This informed a strategy based on finding a deal that provided the following: a strong tenant, a long-term corporate lease, large acreage, low rental price (per square foot) in a densely-populated location.
Execution:
Using our network and exclusive access to the market, we found an off-market deal that met all our pre-qualifying terms. From there, we pre-qualified our client to acquire a property that was above and beyond expectations.
The next step was to secure financing, which resulted in a new first loan of $3,420,000, 20-year term, a 4.81% fixed rate, amortized over 25 years.
Outcome:
How did we do? Here are the results:
- The work that we did resulted in an increased annual net income from $82,500 to over $267,000.
- We expertly handled some unexpected hurdles, such as an uncooperative seller, questions regarding corporate guarantee of the lease, lot splitting, and other tax issues.