Quest Capital Partners (“QCP”) acquired the 50-unit, “The Manhattan” apartment community in the Koreatown neighborhood of Los Angeles, CA in 2012 for $3,835,000. QCP invested approximately $1,150,000 and obtained a 5-year loan from Capital Source Bank at a rate of 4.35%.
In need of significant improvement and hands management the property was only 85% occupied at acquisition..
Refinish/Repair hallway wood floors
Paint basement and epoxy paint floor, general clean up
Security Cameras – Security camera signs
Fabricated metal fencing for front lobby windows and back alley
Installed new exterior lighting, lobby chandelier, interior common area sconces
Painted lobby, exterior façade, and common hallways
Installed new mailboxes and mailbox alcove
Installed new store front glass door and secure entry with intercom
Concrete at rear of property in alley and in front
Turned and upgraded approximately 30 units with various levels of QCP standard finishes
Replace sections of main sewer line under first floor
Replace vertical galvanized lines with copper lines on an as needed basis
New Front Landing
After completing renovations to the common area and exterior of the property, QCP was able to increase the property’s occupancy and stabilized the property up to a consistent 94%-100% occupancy. The much-needed capital improvements were welcomed by current and incoming residents which resulted in a higher retention rate and an average increase in rent of 17%
QCP sold the property in 2014 (2-year hold) for $5,400,000 which represented a 49.50% internal rate of return and approximately a 2.3x equity multiple on the investment.