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Case Study - Woodard Park Apartments

Westland helps investors achieve 15%+ annual returns

This real-life case study is a good representation of what investors can expect from a Westland venture.

WOODARD PARK STATS:

• Location: Tigard
• Purchased 2005: $ 1,993,244
• Units: 39
• Total Investment: $ 700,000
• Investors: 7
• Avg. Rate of Return: 15.4%

Property Profile
Woodard was purchased by a small group of investors Westland put together in late 2005. Woodard sat on the market for six months as broker after broker attempted to sell the property to potential clients. Few buyers even considered purchasing the property because of its terrible curb appeal and rough tenant profile. While these might be detractors to some, at Westland this spells opportunity -- if the area is better than the property and the layout is very livable. By this time the seller was motivated.

The previous owners had invested a significant amount in upgrading the interior but had paid little attention to the exterior with the exception of a much needed new roof. The paint colors were awful and did not appeal to conscientious renters. This caused the tenant profile to decline, while expenses and vacancies climbed.

Opportunity
The play was simple and the process familiar to Westland.  It included:

• Buy the property at a low price.
• Put strong and solid management on site.
• Repaint the property--tastefully.
• Install new windows and doors to improve the livability and appearance while taking advantage of energy department tax credits.
• Redo the landscaping (mostly at the street).
• Improve signage.
• Upgrade the tenant profile.
  • Invite some residents to leave, closely screen new ones and enforce rules actively.
• Raise rents on turnover and then across the board.

Execution
To execute on our plan investors set aside a total of $217,000, in addition to the down payment to fund the upgrade. The upgrade took nearly 12 months to complete and after another eight months the tenant profile had been turned over. Upgrading the tenant profile was critical to keeping expenses down and rents up.

Result
Within 18 months of the purchase, the owners began to get monthly cash distributions. Upgrades in the property and tenant profile have increased the operating revenue by 21% while expenses increased by just 2%. The net result is that after 4 years the annual operating income has increased by $53,000.