Micheltorena is sold

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A few days ago we closed the sale of 1516 Micheltorena, an 8 unit building in Silver Lake.

Here are the relevant numbers:

  • Bought for $954k in September 2010
  • Renovated for $645k
  • Total capital outlay of $1.6MM
  • Stabilized rent roll of $215k / year
  • Took roughly $200k in cash out of the building while we owned it
  • Sold for $2.1MM gross, a hair under 10x
  • Total pre-tax profit of roughly $640k
  • Return on investment (ROI) of $640k / $1.6MM = 41%

I was sad to see this one go. The location, just north of Sunset on Micheltorena, is prime. I have zero doubt that I will look back and wish I had not sold the building. However, the tyranny of IRR meant that it was better to sell and take the profit than to re-finance and hold.

One other interesting note: We bought this one off-market and sold it off-market, which is kind of unusual. I feel good about having sufficiently strong broker relationships that I can do deals like this now. It certainly wasn’t always the case!

Best of luck to the new owners!

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