Magnolia Ridge Apartments

Average Cash: 10%++ annual rate

IRR: 20%+

Number Of Units: 84 State: South Carolina

Purchase Date: September 2012

Sold Date: November 2017

Magnolia Ridge is a C class property, located in a C class area in Gaffney, South Carolina. The property was purchased at a substantial discount to market value through an on-line auction process. The property was a small part of a larger portfolio that collateralized a loan that was in default due to non-performance of other assets in the portfolio. Magnolia Ridge was a largely neglected, but performing property in a small market that had minimal deferred maintenance issues and was profitable immediately upon acquisition. The property was financed with short-term bridge loans, which converted into equity (LLC membership interests) shortly after acquisition. Within 18 months of purchase, we obtained a bank loan and returned 80% of the original equity to investors. Through the return of capital via the refinancing and quarterly cash distributions, investors have recouped over 100% of their original investment to date, while maintaining their ownership in an appreciated property. We continue to pay quarterly cash distributions and will operate the property for cash flows until we ultimately sell the property to realize capital appreciation.