Everyone in Real Estate is sitting on the edge of their seat waiting to see what the Fed does at each of their meetings and how that will affect interest rates. Fortunately, all of our Long Beach properties are on 5-year fixed rate loan terms!
Our Property Management partner, Weststar Property Management and Construction Partner, JD Remodeling, continue to deliver on our original business plan for each of the properties. As inflation continues to affect many areas of the economy, rents continue to increase as well, which will bode well when we finally sell the properties.
For the upcoming Tallahassee, FL deal, we have purchased a rate cap which will limit our exposure to 2.5% above our starting rate. The conservative assumptions we have incorporated into the underwriting should help this property exceed expectations. For more details on these conservative assumptions, please contact us.
1955 Locust Ave., Long Beach, California
Overall, this building continues to perform well although we have had to initiate the eviction process for one tenant. We are still making distributions albeit slightly less due to this. We will be attempting to collect past due rent through collections, although the outcome is uncertain.
551 Daisy Ave., Long Beach, California
The one vacancy at this property has been leased and the tenant moved in this week. The unit had previously been rehabbed but we were still able to raise the rent another $50 without additional rehab. We are still making monthly distributions on this property.
1470 Elm Ave., Long Beach, California
The 9th unit has been completed! You can see from the pictures below, these units are sometimes received in rough condition, but after 3-4 weeks the transformation is amazing. This unit and another recently vacated unit have both been leased with move-in dates this week and next. It will still be a month or two before we can resume distributions but the building is definitely on the right track.
Reseda Medical Arts Building, Reseda, California
The single vacancy at this property has been filled with another physician. We’re excited to report that the tenant is paying 21% higher rent than the previous tenant!
Plans are still being reviewed by the City to install a new drainage system, new parking lot, and new security gates to secure the rear parking lot. Have you ever tried getting building permits through the City of L.A.? It’s definitely not for the faint of heart!
565 Prescott St., Pasadena, California
The three homes on this property are still under construction. We were forced to replace the contractor on the project due to schedule and budget issues. The new team is moving along much better and we have already received several permit approvals.
The goal is to put these homes on the market in the next two months.