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.
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.
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.