INTRODUCTION WOODLEY 34

Woodley 34 is an investment opportunity located in the Lake Balboa area of the San Fernando Valley (City of Los Angeles).

The property is within minutes of the Orange Metro Line, Japanese Garden, Sepulveda Basin Rec Area, and the Van Nuys Golf Course.

Golden Bee Properties has been active in the Lake Balboa submarket for over a year with another asset (Woodley 24 – 6736 Woodley Ave) just up the street.

BUSINESS PLAN

The plan for this asset is to gut and rehab all 34 units within nine months or so, then re-rent at market rents and bring the building up for sale within two years of purchase.

To accomplish this we intend to use a $1.5 million capital improvement budget, spending on average $45,000 per unit to upgrade kitchens, baths, floors, paint and add central air.  On the exterior we intend to clean up landscaping, upgrade the pool, add lighting and paint, as necessary.

INVESTMENT SUMMARY FAST FACTS

Limited partners will receive a guaranteed and accrued 8% preferred return with a 65% (paripasu) share of the distributable cash after all fees are paid.

Investor level internal rate of return (IRR) is projected to be approximately 20% over the two year term.

  • Investor Capital Contribution – 80%
  • Hold Period ~2 years
  • Investor Preferred Return – 8.0%
  • Property Level Internal Rate of Return – 26%
  • Investor Level Internal Rate of Return – 20%
  • Investor Equity Multiple – 1.31

SOURCES AND USES OF EQUITY

The sponsor is placing approximately $470,000 of its own funds into the investment.

Approximately $7.2 million will come in the form of debt from a local lender (~80% LTC).  The remaining $2.35 million will come from an equity position.

Limited partners will receive a guaranteed and accrued 8% preferred return with a 65% (paripasu) share of the distributable cash after all fees are paid.

PURCHASE SUMMARY & RENT ROLL

Woodley 34’s purchase price is $7.25 million with an additional $1.5 million intended in capital improvements.

Current gross rent is approximately $42,000 per month, with market rent at approximately $65,000 per month.  To achieve market rents, 15 of the 34 units will change from studios to junior one bedroom units or from one bedroom units to two bedroom units.