The Setup
This 22-unit apartment building at 4573 Willis Ave. sold for $5.275 million, or just $196 per square foot.
The buyer, B.A.G. Investments, has acquired more than $186 million of real estate over the past five years. They're buying it because they believe today's prices gives them a business plan that can get them 11-17% IRR.
What an Operator Sees
I see $196 per square foot, a below replacement cost, a 6.11% going-in cap rate, positive leverage, below-market rents with upside, tax depreciation, and a path to a 9%+ yield on cost.
If interest rates normalize, a future refinance could return a meaningful portion of the original equity while the property's cash flow continues paying down the debt.
I see a long-term plan with the potential to generate 11–17% leveraged IRRs, build equity through debt amortization, and eventually become a debt-free cash-flow machine.
That's why I like this deal.
I track every multifamily sale in Los Angeles so you don't have to.
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