Case Study: "Creating the Downpayment"
The following is a 13-unit, 1-bedroom townhome project.
We "created the downpayment" by generating enough equity to withdraw 100% of our original investment upon stabilization. We completed the project without any general contractor (GC) or developer fees. 50/50 split over zero preferred return.
With all the cash-out, it's an infinite Cash on Cash return.
We continue to own the property with our partners and plan to do so indefinitely.
Having completed close to 30 similar projects, we likely won't undertake a project of this small scale again. This 10,000-square-foot project requires the same amount of effort and management as a 30,000 sq. ft project, and even though we've never completed one, it's taking the same work as our 400,000 sq. ft, 400-unit project in Austin.
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