Case Studies
Highland Apartments - $4.54 Million
This 20-unit garden-style apartment complex was sold for the first time in 60 years of ownership due to the seller finding himself unable to properly manage the asset after inheriting it. Swallow Hill Investments acted quickly and offered strong terms, which allowed it to acquire the asset at a $340,000 discount to the asking price.
The appeal of this investment was due to its location within the gentrifying Highland Park submarket, current rents being 35% below market levels, and the ability to develop additional units. As part of its comprehensive business plan, Swallow Hill Investments immediately repaired long-standing deferred maintenance issues with the roofing and sewage line systems, engaged a painter to re-design the exterior of the asset and embarked on the development of the additional units. Due to the large lot size, the rear carport structures can be converted to build an additional two-story structure with luxury-finished apartments.
Northbrook Apartments - $2.80 Million
This 12-unit apartment investment was sourced through a long-standing relationship between one of the top-producing brokers in Los Angeles and Swallow Hill Investments. The mom-and-pop ownership had initially engaged a residential real estate agent to market their property who substantially misunderstood the value potential of the asset.
All units were renting significantly below market, and the layout permitted for the tuck-under parking spaces to be developed into additional units. Additionally, previous ownership was using an onsite live-in manager who was paying rent at 25% of the fair market rate and severely mismanaging the asset.
Swallow Hill Investments installed professional property management, implemented immediate rent increases permissible under state law, added drought resistant landscaping for significantly decreased utility costs, and addressed many deferred maintenance issues, all of which have increased investor returns dramatically and improved the livelihood of the tenants.
6-unit Development - In Process
Monitoring local and statewide legislative changes allows Swallow Hill Investments to maintain a competitive edge and capitalize on new mechanisms to add value for its assets and investors. For example, we frequently target value-add opportunities that allow us to utilize the newly-enacted Accessory Dwelling Unit legislation, where we can develop additional units by-right.
This development was created in close coordination with one of the most knowledgeable structural engineering and architectural firms in Los Angeles. The floor plan and design were curated specifically for the sub-market to attract top-of-market rents.
Example Unit Renovation - 42% R.O.I.
Unit renovations typically range in R.O.I. from 15%-50% on an unlevered basis. They represent one of the most material mechanisms to add value and increase cash flow for multifamily investments, and they bring a net positive to the apartment communities by improving overall systems functionality and cleanliness.
When a tenant chooses to vacate, we embark on a detailed rent study of comparable assets in the market and determine what amenities, designs and costs will yield the best return on capital.
Using our deep network of sub-contractors, we rapidly renovate the units and list them with our specialized marketing team to re-lease. This whole process typically is completed in less than one month.
This example resulted in an annual return on investment of 42% and increased the property value by approximately $132,000.
