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  • Writer's pictureDan Thomas

Syndication Case Study #3 - Haven on Thomas (Phoenix, AZ)

If you’ve decided that incorporating real estate into your investment portfolio is a no-brainer and realize that you don’t have the time or desire to be an active investor (another great choice!), then investing in a no-hassle, hands-off, Real Estate Syndication is the best option. These investments enable multiple participants to pool capital together to purchase a real estate property that delivers passive income and appreciation to the investor.


Limitless Investing believes strongly in transparency, which is why we publish case studies for all of our investments once they have exited (sold or refinanced) and the investment outcomes have been finalized. The case study today will be focused on Haven on Thomas in Phoenix, Arizona which closed earlier this month.


Property Details:


  • Location: Phoenix, AZ

  • Type: Two story garden style apartment community with 7 buildings and a unit mix consisting of 32 one-bed/on-bath and 72 two-bed/two-bath units

  • Class: C+

  • Year Built: 1983

  • Rental Units: 104

  • Purchase Price: $16M

  • Renovation Budget: $2.8M

  • Investor Capital: $10.5M

  • Loan Amount: $8.3M

  • Sale Price: $30M


Investment Strategy:


  • Overall Business Plan: Increase rental income by $400+ per unit, per month through significant value-add improvements

  • Exterior Value-Add:

    • Rebrand from Villa de La Paz to Haven on Thomas

    • New paint and window sunscreens

    • Upgrade the office, swimming pool, playground and BBQ gazebo

    • New landscaping and signage

  • Interior Value-Add:

    • New cabinets in the kitchen and bathrooms

    • Replace vinyl surfaces with granite

    • New washers, dryers and stainless steel appliances

    • Fresh paint and upgraded flooring

  • Operational Improvements:

    • Utilize 2 full-time personnel, including a manager and maintenance supervisor

  • Investment Funded: February, 2021


Why We Invested (based on 2021 data):


  • Market: Phoenix is one of our favorite areas to invest (as detailed in our recent blog) and has been for the last few years based on numerous key real estate drivers

  • Population Growth: Phoenix MSA recorded the greatest population growth of any large city in 2019.

  • Rental Price Increases: Phoenix MSA is leading the nation in rent growth YoY, clocking in at 5.4%, well ahead of the national average of 0.7%.

  • Personal Income Growth: Median household income in Phoenix is $64,427, above the national median of $61,937. In the last year, income in Phoenix grew 10x faster than the national average.

  • Business Plan: solid and conservative projections given the proven business model and significant value-add opportunities to increase monthly, per unit rent from $890 to $1,376

  • Sponsor Team: Experienced team with proven track record of executing on similar investments near the target property


Investment Results:

Metric

Projected

Actual

Variance

17%

60%

+43%

14%

58%

+44%

Hold Period

60 Months

14 Months

-46 Months

1.7X

1.75X

+0.05X*


Before Value-Add Improvements:


After Value-Add Improvements:


Interested in Learning More?


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