California - SOLD

Realized Gross Returns:
IRR: 45%
Equity Multiple: 2.3x
Hold Period: 6 Years

1846 N California Ave, Chicago, IL 60647
Strategy: Add Value, Cash Out Refinance
Status: Realized
Purchase Price: $1,650,000
Acquisition Date: 12/9/2015
Sale Price: $2,150,000
Sale Date: 12/28/2021
Units: 6 Units
Repeat Broker, Repeat Seller, Realized

Constructed in 2012, California is a multifamily property in the rapidly-growing Logan Square neighborhood.

Our firm acquired California and Kedzie from a well-known local condo developer. The seller was not obtaining the rental rates these buildings should have commanded. Rents were materially below market, and we acquired the properties at a price based on current rental rates.

We immediately executed on our improved revenue management, moving all rental rates to market and charging for parking separately. We obtained multiple property tax reductions. We far exceeded even our rent projections and taxes remain well under our initial underwriting.

Within 18 months, we increased the rental income by 30%. 20 months after acquisition, we closed on a refinance with a loan balance of $1,912,000, above our initial purchase price by $262,000. From the date of purchase to the date of refinance, we distributed 165% of the initial cash equity invested in the project. California appraised for $2,390,000 during this refinance, which represented a 45% value increase in less than 2 years.