INVESTMENT SUMMARY

5520 Gaston Avenue is a two story 14,200 sf multifamily value-add rehab from a Class C to Class B property type. The interior walls of the rehab were brought to the studs and individual units were realigned and modernized to maximize efficiency and appeal. The exterior fa├žade and grounds have also been updated and modernized. The property consists of 19 one-bedroom units averaging roughly 600 sf per unit with rents of approximately $1,300 each. There are also 4 two-bedroom units averaging roughly 700 sf per unit with rents of approximately $1,450 each.

PURCHASE RATIONALE

5520 Gaston Avenue was originally named the Royal Palm Apartments and constructed in 1955. It has been owned by the same family for over 55 years. The area is gentrifying considerably and this property has been severely underutilized. The costs for Class A new construction, which may be somewhat overbuilt resulting in concessions, are very high and ultimately result in the need for high rents. There is a need for updated lower to moderate income rentals in the Dallas Metropolitan area.

EXIT STRATEGY

Stabilization should occur in year 2 with a 2% rental increase projected for the next 11 years. This project was initially a buy and hold; however, the partners will sell the project within 2 years for a 15% profit as a recapitalization event for other larger projects.