8951 Jamacha Rd, Spring Valley

Case Study: 8951 Jamacha Rd, Spring Valley (Buyer Representation)

Our buyer client acquired a 32-unit Spring Valley community for $6,800,000 ($212,500 per unit) at a 5.10% cap rate, 100% occupied at close.

Purchase snapshot

• Purchase price: $6,800,000 ($212,500 per unit)

• Cap rate: 5.10%

• Units: 32 (9 × 1BD/1BA at 600 SF, 22 × 2BD/2BA at 800 SF, 1 × 3BD/2BA at 940 SF)

• Occupancy at close: 100%

• Location: Near the 54 and 94 freeways, Spring Valley

• Representation: Buyer

The opportunity

Spring Valley 32 (formerly Casa Jamacha Apartments) offered fully occupied, stabilized income on day one, with clear room to improve the units. After closing, our client added in-unit washers and dryers, granite counters, wood-style flooring, stainless appliances, a gated entry and refreshed pool amenities.

What drove the underwriting

Buyers of 20–50 unit East County buildings look at five things: the current cap rate, realistic rents after renovation, renovation cost per unit, parking ratio and local rent comparables. A building that is full at close lets a buyer finance on actual income and treat the renovation as upside rather than a requirement.

For owners of 10–50 unit buildings

This is the buyer's side of the renovation question. If your building has below-market rents and dated interiors, you can renovate before selling or let the next owner price in the upside. The right answer depends on your timeline, tax position and how buyers in your submarket are underwriting today.

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