6% preferred return with a stabilized IRR target of 34.86% and 9.6% cash on cash.

Large amount of units in a concentrated and highly desirable area.

1) Current expenses are 50% of rents
2) Update landscaping for reduced water expense
3) Analyze current leases and notify all tenants paying below market rents that we will offer them cash for keys, typically $10k to $12k depending on the unit.
4) Rehab 10-14 units per year for the first 3 years, spending on average $8,000 per unit, totaling $112,000 per year or $336,000 bringing up rents.
5) Any in place leases will on average be increased 4% yoy
6) expect each unit to be vacant for 1 month during rehab
7) By year 3 expenses will be about 30% of gross income
8) Refinance out of bridge loan by year 3 moving to a more permanent loan
9) Sell in year 5, using a cap rate of 4.25%, with estimated sale price of $24M and profits expected to be $7.3M

Unbeatable location with proximity to shopping, dining, and schools. Onsite pool, multiple laundry rooms and Well maintained playground.