Maxwell Park Apartments
I traded into this 18 unit building in the Maxwell Park neighborhood of Oakland in 2006 at the peak of the market. At that time the market was on fire and the identical 1 bedroom units were renting at a maximum of 900/mo.
I fell in love with the building when I saw the spacious maple wood floors and residential streets. Later I discovered that the area lacked a walking neighborhood, proximity to BART and was negatively impacted by crime creeping up from west of Foothill Blvd. Regardless, I have transformed this building into a cash flow machine, now getting 1250/mo for the same 1 bedroom units. I have installed new windows, granite kitchens, garage doors, roof and many other substantial upgrades.
Purchase price: $1,650,000 6.5% cap rate
Renovations and repairs: $80k
Rent increases: 16.5%
Current value: $1,950,000
Increase in value: $300k at 6.5% cap rate
Current Rent Roll: $192k/yr
Original Rent Roll: $162k/yr