Updated post with final numbers – calculations below are final as of July 2021.
We’re going to review one of the investment properties we invested in back in May 2018 (closing date). We became a limited partner for the property and we own roughly 4% of the asset.
Some details around the property: 25 unit Class C apartment community in Houston, TX. At the time we were evaluating the deal, the goal was to have this property upgraded to a Class C+ with a 10% projected preferred return for the investors. 2020 was the targeted sale year, however, the covid pandemic and the Texas winter storm in early 2021 has pushed it back and brought about increased operating expenses.
On this investment, we’ve received (post tax-advantages mechanisms):
> 2018 – $1500 from quarterly distributions
> 2019 – $165 very limited cashflow as property was going through the value add improvements
> 2020 – $500 from quarterly distribution + $4912.50 from cash out refinancing
> 2021 – $23,903.51 from initial sale + $2033.90 final amount from sale
In summary, we received $8,014.91 return (post tax-advantages) over the course of 3 year holding period from our initial capital of $25,000. The property was recently sold after the value-add improvements have been made. The sale took around 90 days to go through. In other words, this investment gave us 10.7% return annually (not compounded) from our capital over holding period of 3 years – all while being a passive investor.
This asset was the most conservative investment in our current portfolio.
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