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Background

A client facing the stringent timelines of a 1031 exchange found themselves in a predicament, aiming to upscale to a larger multifamily property in Silicon Valley's competitive market. The task was daunting, with a tight inventory at the desired price point and the challenge of a high vacancy rate and under-market rents at the identified property. This case study outlines how the HAYLEN Group’s strategic intervention and project management acumen facilitated a successful exchange, overcoming financial and logistical hurdles.

Our Strategy & Approach

The initial obstacle was the property's inability to meet minimum Debt Service Coverage Ratio (DSCR) requirements due to its current Net Operating Income (NOI). To bridge this gap, bridge financing became a necessity. Negotiations brought the price down to mirror the present NOI, though traditional financing was still out of reach.

To quickly boost the property's value and rental income, we embarked on an aggressive plan to remodel vacant units and lease them at market rates. This approach was critical to meet the DSCR for refinancing within the set timeframe.

Leveraging our extensive network, we introduced a vendor who offered competitive pricing for the necessary repairs, ensuring the project remained within the client’s budget. Our involvement in post-closing project management, in conjunction with the client’s property manager, proved pivotal in executing the renovations efficiently.

The swift rehabilitation of several units and securing tenants at market rents allowed for a rapid transition to refinancing. The property’s quick stabilization post-renovation underscored the success of the implemented strategy, allowing the owner to meet the refinancing criteria.

Before & After

What We Did for the Property

Work With Us

Setting a New Benchmark in Real Estate Innovation

Despite the challenges posed by a tight Silicon Valley real estate market, stringent 1031 exchange deadlines, and financial constraints, the HAYLEN Group's strategic foresight and effective project management facilitated a successful property exchange and stabilization. By leveraging bridge financing, executing timely renovations, and utilizing cost-effective vendor services, we enabled our client to upscale their investment and meet their financial goals within budget and on time. This case study exemplifies our dedication to delivering comprehensive solutions that navigate complex real estate investment challenges.