6% preferred return with a stabilized IRR target of 32.45% and 9.0 cash on cash.

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

1) Current expenses are 46% 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 12-16 units per year for the first 3 years, spending on average $9,137 per unit, totaling $155k per year or $465,987 bringing up rents to market which is 58% premium.
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 $22.3M and profits expected to be $6.3M

Notes: 10 units currently vacant and on as is OM, using market rents, so I removed and significantly lower NOI as is.
Also for expenses, used more accurate numbers based on actual comparable properties for the following: Insurance, R&M, Landscape, Off-site mgr, Reserves.

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