A Los Angeles Apartment Complex Sale | Transforming Retirement with Smart Real Estate Strategies
VALUE-ADD APARTMENT COMPLEX IN SUN VALLEY
In the vibrant San Fernando region of Los Angeles, specifically in Sun Valley, a sale was completed by real estate apartment broker team led by Kevin Kawaoka of Bluechip Investment Group @ NAI Capital.
This case study delves into the sale of a 26-unit apartment complex, revealing the challenges met and the strategic solutions implemented to ensure a successful transaction.
PROPERTY OVERVIEW
Key Details
Location: Los Angeles, Sun Valley, CA. 0.4 miles to the Sun Valley Recreation Center, 1 mile to the Gol Soccer Complex, less than 0.5 miles to the 5 freeway, and 2.7 miles to the Burbank Airport.
Units: 26
Sale Price: $5,000,000
Price Per Unit: $192,308
Unit Mix: 17 (1 Bedroom), 8 (2 Bedroom), 1 (3 Bedroom)
Price Per Square Foot: $274
Building Details: 2-story, 26-unit complex
Building Square Footage: 18,240 sq ft
Year Built: 1983
Lot Size: 31,743 sq ft
Zoning: LAR3
PARTIES INVOLVED
Seller: F. Escuadro
Buyer: Nordhon LLC
Lead Apartment Broker: Kevin Kawaoka, Bluechip Investment Group @ NAI Capital
CHALLENGES AND SOLUTIONS
CHALLENGES OF MANAGING A 26-UNIT WORKFORCE HOUSING APARTMENT COMPLEX
Our client, Mrs. Escuadro, faced significant challenges managing her 26-unit workforce housing apartment complex in Sun Valley, Los Angeles. The strong apartment market presented a prime opportunity to sell, but long-term ownership posed a substantial capital gains tax liability. As a recent retiree, she needed a steady income stream and cash for monthly expenses. Her experience was limited to residential income properties, and the prospect of change was intimidating. Additionally, the property had a federal tax lien and an unreconveyed deed of trust, adding complexity to the sale process.
UTILIZING A 1031 EXCHANGE TO DEFER CAPITAL GAINS TAX
Our brokerage proposed a 1031 exchange to help F. Escuadro defer the capital gains tax while securing a property that offered a stable income stream. After thorough discussions, we identified a single tenant NNN property as the ideal solution. We focused on businesses that were internet-proof, well-located, and financially sound.
ATTRACTING BUYERS AND RESOLVING LEGAL ISSUES
Using our robust marketing platform, we attracted a buyer for the apartment building and structured an all-cash deal with no loan contingency. We also negotiated seller extensions to allow time for identifying the right replacement property. Despite the federal tax lien and unreconveyed deed of trust, our team resolved these issues and successfully closed the sale.
SECURING A HASSLE-FREE INVESTMENT
During escrow, we sourced a new Mister Car Wash located on a Walmart outparcel in a high-end neighborhood in Atlanta. This property was a perfect fit, offering a hassle-free investment with no maintenance, taxes, insurance, or landlord responsibilities.
SUMMARY
Today, Mrs. Escuadro enjoys a stress-free investment with a monthly rental payment backed by an absolute NNN corporate guarantee for 20 years at a 6.25% cap rate with annual increases. Her net operating income (NOI) increased by over 49% ! Even during the pandemic, her income remained stable, and the business continued to thrive.
With the right strategy and expert guidance, we achieved the outcomes she needed. Our mission is your success, and this case study is a testament to how we can turn real estate challenges into lucrative opportunities.
Discover more about our team and successes at Bluechip Investment Group Team and NAI Capital.
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