After purchasing the apartment community for $7 million, DLP sold Kensington Cottages for $14.9 million, providing 66% annual IRR.
DLP Real Estate Capital turned the 170-unit multifamily apartment community from old and outdated to modern and sleek, while increasing occupancy to 97%, prior to selling the property in August 2019.
Real Estate profits are made at time of purchase
Originally purchased in July 2016 for $7,345,000, DLP Real Estate Capital created a welcome space for a desirable tenant base and took strategic advantage of market timing.
DLP’s acquisitions focused on undervalued assets with high upside potential
The specific strategy involved maintaining high occupancy while adding value through improvements to unit interiors upon turnover, positioning the property to capitalize on the 5%+ rent growth anticipated in the central Florida market.
Nicholas Lanni, Senior Investment Associate, commented, “We spent over $1 million in capital expenditures primarily aimed at interior upgrades.” Renovations included hard surface flooring in kitchens and bathrooms, upgraded appliances, and new cabinetry.
Upgrades led to over $600,000 increase in annual rents
The property maintained better than market average occupancy while under DLP’s property management. “Over 36 months, the average rent rose from $502 to $801, an increase of over 59%. Total monthly rent revenue was up from $82,000 at closing to over $133,000 per month,” noted Lanni.
DLP Investors earned over 19% on this Property
Larry Hickernell, DLP Capital Partners’ Senior Investor Success Manager commented, “With this specific property, we had an over 19% net annual return to investors! With those phenomenal returns, investors had the opportunity to then re-invest and transition their substantial earnings into our brand new Housing Fund.” He continued, “Kensington Cottages was a prime example of DLP taking a somewhat neglected asset and creating a safe, comfortable, and most importantly, a desirable environment to call home.”
Janet Oetterer, former property manager shared, “As the property manager of Kensington, I began to see the possibilities of our community as a whole – hard-working individuals working two jobs, older citizens that had no one to talk to, families with little ones with financial woes and young vibrant individuals simply trying to get a head start. I loved them all! Humble Confidence is what Kensington Cottages is all about.” She continues, “I began as just another management company and by the end we were family. I still receive phone calls from residents telling me that we were by far the most caring management company that they have experienced. We were able to put them at ease by simply sharing our company values.”
Under the ownership of DLP Real Estate Capital, the Kensington apartment community offered a good, stable investment for the buyer.