The Asset Advantage

Forced Appreciation

Maximizing Value Through Forced Appreciation

This month, we’re excited to share a success story from one of our recent projects that underscores the effectiveness of forced appreciation.

Exceeding Expectations:

At the time of purchase, the rent roll was sitting at $13,500 per month. Today, the rent roll is at $16,800. Once renovations are completed on the singular vacant unit, we project this to increase even further to $18,100.

This is a result of renewing a majority of leases and renovating the units that have come available. 13 leases have been renewed with increases ranging from 14 - 36 % with minimal to no renovations. 2 units have been fully renovated and leased out for an average rental increase of 47%, exceeding our projections.

Renovations and Capital Deployment:

As we move forward with our renovation plans, we’re even more optimistic about the potential for this property. Originally, our conservative projections estimated post-renovation rents at $1,250. However, given the current market dynamics and the positive reception to our initial efforts, we now project rents for renovated units to reach $1,350. This adjustment not only reflects the value we’re adding through renovations but also highlights the strong demand in the area for upgraded living spaces.

Thus far, we have completed 2 unit renovations with a third one in progress. In addition, the parking lot has been repaved and a new monument sign is currently being manufactured, drastically increasing the curb appeal.

Increased Property Value:

With the increase in Net Operating Income (NOI) driven by higher rents, the property’s value has seen a substantial boost. Based on our current NOI and a conservative market cap rate of 8.0%, the property is now valued at approximately $1.8 million, a significant increase from our original purchase price of $1.35 million just 4 months ago. Of course, this is only one method of calculating a property’s value and several other factors come in to play. However, this growth exemplifies the power of forced appreciation in enhancing asset value.

Looking Ahead:

Forced appreciation is a cornerstone of our investment strategy at CHLW Partners. By strategically increasing rents and enhancing property value, we’re able to deliver superior returns to our investors while creating desirable communities for our residents. The success of this project is just one example of how we’re leveraging market conditions and our expertise to maximize asset value.

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Disclaimer: Nothing in this communication shall be construed as an offer for investment in CHLW Partners, LLC (the “Company”). Solicitations for investments by the Company will only be made through a Published Investment Opportunity in the Company's investor portal provided by the Company to potential investors for such purpose.