The Blackwood Apartments
South Lake Tahoe, CA - 20 units
$2,925,000
Acquired
(mar. 2022)
1.82x
Projected equity multiple
22.1% IRR
Projected IRR
Flite pleased to present Blackwood Apartments, a 20-unit apartment community nestled in the resort town of South Lake Tahoe, California and half a block away from our 13 unit property, Leawood Apartments that we currently own. Working closely with a local broker and partnering with Clearwater Construction, a well established local contractor, we were able to secure the deal off-market for $2,925,000. The community features:
Three Studio units
Seven One-Bedroom/One-Bathrooms units
Eight Two-Bedroom / One-Bathrooms units
Two Three-Bedroom / One-Bathroom single family houses
In addition to the desirable unit mix, the property features on-site (owned) laundry and ample on-site parking. The current ownership has done minimal maintenance and management of this property, which means that upgrades to the property will need to be done thus rents are far below market. The offering represents a classic value-add opportunity in one of the countries hottest rental markets.
Flite has partnered up with Clearwater Construction and we are experienced to take on this challenge as it provides value-add opportunities from property management and renovation perspectives. The incumbent rents are extremely low, averaging $1,090 per unit, and have over 35% upside to current market levels to over $1,695 average per unit. Although short-term rentals are not allowed in this area and for this property, we are exploring possibilities of 30 day or more "seasonal" type leases to boost income potential.
As coastal residents and companies adjust to a work-from-home model, South Lake Tahoe property owners are poised to benefit from an influx of population and thus occupancy pressure. The Tahoe basin has been a lucrative destination for residents who can now work in the same setting that they play due to Tahoe's vast recreational opportunities. The property is located in a quiet residential neighborhood of South Lake Tahoe but is still very close proximity to the Stateline Casinos and Lake Tahoe Boulevard Business Corridor, providing residents with convenience to modern amenities and entertainment. Heavenly Ski Resort is also a short three-minute drive away from the property.
