A Path to a 200% Turnaround in 6 months in the Oakman Boulevard Community for 3475 Ewald Circle

3475 Ewald Circle 48204

2726 Ewald Circle 48238

On 8/27/2024, the MTMA Team acquired two value-add properties within the Oakman Boulevard Community, 3475 and 2726 Ewald Circles, for the total price of $364,000.00, from the same seller. This was a Joint Venture purchase with a local investor.

These were acquired as value-add properties, and although there were some renters, they were mostly out of touch with the seller, or on a month-to-month lease, and there was little expectation that they stay on as long term tenants.

Here we will discuss the original acquisition thesis and the turnaround that 3475 Ewald Circle Investment Opportunity has taken.

• 3475 Ewald is a 8-unit 1BR and 2BR apartment building within the 48204 zip code
• a $24,500.00-a-unit investment
• conservatively estimated a $30,000.00 per unit repair cost 
• Estimated after-repair cost of each unit at $54,500.00 

Nearby For Sale listings in late 2024 of similar caliber properties are as per below.

The affiliate property manager’s rent assessment is $950/mo for the 2BR, and $800/mo for the 1BR. The first floor 2BR1BA units all come with a sizable basement. These assessments align with the nearby comparables. 

2055 Clements Avenue’s rents and sales price are from a sales date of 7/14/2022 and unlikely to apply today. 

Today, during mid-December of 2024, below is what we have been able to achieve with this property. We now have turned several of the month-to-month renters into permanent renters who pay close to market rent. The occupancy rate is now 70.00%, with rental income expectation of $5,215.00 a month. 

This was also achieved with minimal outlay. Many of the tenants were happy to see the new management come in and make a difference in the common areas. These ended up signing on as long term tenants, and the management was able to raise some of these rents closer to market rent. The owners have, to date, disbursed a total of $57,786.34 to turn this property. 

The team may spend another $30,000 after the tenant in Unit 3485 is successfully evicted to turn this property around. At this point, the Team has revised its $240,000.00 turnaround repair estimate to $100,000.00 before the building can be operated at 100% occupancy. 

The new investment outlook for this property within 6 months of its purchase is now as per below.

• a $24,500.00-a-unit investment
• $12,500.00 per unit of improvements including the common areas
• A total at cost basis of $37,000 per unit to stabilize
• Rent income of $6,965 at full collection

Interestingly, this will match our Subject Investment Property at the same cost basis as Comp 5, which was sold in 2022 before rents and values soared. Our Team has successfully overachieved by a mile.

Income Approach Cap Rate Estimation



Currently we are still seeing where the costs will come in at, so let us use a rule of thumb of 40% expenses from full face value rent value. This brings the 6 months stabilized Net Income of Subject Property’s to an annualized $50,148.00. 

Deriving a 8 to 10% cap rate, the income approach valuation of Subject Property may come in at between $500,000 to $625,000.

The team’s total investment amount during the first year will have been $296,000.000 This is an incredible value creation of 170% to 210%.