In September 2020, Gray Property Group added another property to its portfolio, this time an 8-unit set of townhouses at 9 Bayberry Lane in Epping.
The Property, purchased for $850K ($106K/unit), is comprised of eight 950 SF, 2-bedroom, 1-bathroom double-decker townhouses that currently rent for an average of $1,450/month. At the time of acquisition, annual net operating income is ~$80K/year, corresponding to a $975K valuation.
Gray intends to complete a $140K cosmetic rehab of the Property in three stages throughout late 2020. The renovated apartments will feature stainless steel appliances, vinyl plank flooring, white cabinets and bright countertops, new bathroom fixtures, and a washer/dryer set in-unit. Each apartment will rent for $1,800/month, increasing the Property’s annual net operating income to ~$110K/year and its valuation to $1.35M.
This project was partially funded with syndicated capital from a limited partner who will exit the deal with a significant profit after the renovation’s completion. Gray will execute a buyout of the limited partner’s equity with the proceeds of a cash-out refinance based on the Property’s post-renovation appraisal. The refinance will cash out all capital initially invested in the deal and maintain ~$50K/year in 2021 projected cash flow.
Gray intends to complete the Property’s renovation and lease all 8 units by end-of-year 2020. Stay tuned for updates.