Meridian Terrace Townhomes

Metrics Overview

• Address: 215 23rd Ave SW Puyallup, WA 98371
• Units: 15
• Date acquired: 9/26/2017
• Date sold: 12/30/2020
• Acquisition price: $2,984,000
• Selling price: $4,160,455
• Capital (cash) investment (M&M Ventures): $2,930,661
• Cash Profit: $1,217,895
• Internal rate of return (IRR): 16.3%
  

This 15 unit property consists of 3 separate buildings with 5 units each, including 9 large 2&3BR townhomes at 1570sf each and 6 2BR flats at about 1000sf each. In 1993 the original owner built one of the buildings with 5 units on the 38,333sf parcel. In 2003 the subsequent owner built two similar buildings with 5 units each on the same parcel. When M&M Ventures acquired the property in Fall of 2017, only one of the original 5 units in the 1993 building had been remodeled and many of the units in the other two buildings were dated and in need of upgrades to appliances, cabinetry, carpets, etc. Additionally, existing rents at Meridian Terrace were below market rates at the time of acquisition.



In the first 30 months of ownership M&M Ventures invested about $120,000 in capital improvements, including remodeling 4 units, upgrades to several dated units, new appliances, pickle-ball court, new cedar fence and more. This investment along with natural Pierce County rent growth resulted in an average monthly rent increase of about $400/unit from $1,300 to $1,700, or about 12% annual rent increase from the value add investments and organic rent growth during the first 30 months. Meridian Terrace was sold just over 3 years after acquisition on 12/30/2020 for $4,160,000, a cash profit of over $1,200,000 and IRR return of 16.3%