INVESTING IN APARTMENT COMMUNITIES IN ALBUQUERQUE
Interested in investing with 5 Keys?
Contact me to request an interest form. I'm currently looking for deals and partners.
5 Keys Capital, llc
Why Albuquerque? And, how does 5 Keys Capital add value?
Albuquerque, NM is a vibrant and growing market that presents a compelling opportunity for investors in multi-family real estate. The city boasts a diverse economy, anchored by sectors such as healthcare, technology, and tourism, which drive demand for rental housing. Additionally, Albuquerque has a favorable cost of living compared to other major cities, making it an attractive location for both residents and businesses. The city's growing population and strong job market, combined with a limited supply of new multi-family construction, are contributing to a tight rental market with consistently rising rents. This creates a favorable environment for investors, as it is likely that demand for rental housing will continue to grow in the years to come. Furthermore, the city's favorable tax laws and robust investor-friendly infrastructure make Albuquerque a smart choice for those looking to invest in multi-family real estate.
I grew up in Albuquerque, and I am intimately familiar with the city and its various neighborhoods. This gives me a unique perspective on potential investment opportunities and allows me to identify up-and-coming areas before they become popular among other investors. Additionally, I have built a team of real estate professionals who provide me with the support and expertise necessary to make informed investment decisions. With their assistance, I am confident in my ability to effectively navigate the Albuquerque real estate market and capitalize on its many opportunities. If you are considering investing in multi-family real estate in Albuquerque, I would be honored to partner with you. I bring a unique combination of local knowledge, professional connections, and a seasoned support team to the table. Contact me so I can begin to learn about your investment goals to see if we may want to partner on a deal.
5 Keys to Growing Real Estate Wealth
5 Keys represents the five different ways real estate pays the investor.
Here is an example:
- Appreciation: Your property increases in value from $500,000 to $530,000, reflecting a 6% historic appreciation rate in real estate. Your $100,000 down payment results in a 30% return or $30,000 gain.
- Cash Flow: The residual income of $750 after deducting monthly expenses provides a 9% Cash-On-Cash Return.
- Loan Paydown: Your tenant's monthly payments on the $400,000 loan result in an annual paydown of $5,880, equating to a 6% return based on your $100,000 investment.
- Tax Benefit: The mortgage interest deduction and depreciation can result in tax savings and a conservative estimate of an additional 3% return.
- Inflation-Hedge: Inflation acts as a hedge, diluting the weight of your mortgage debt over time and providing an estimated return of 3%. (Of course, inflation at this time is at least double the historic rate!)
5 Keys Capital, LLC: Case Study of El Portal Apartments, Albuquerque, NM*
El Portal Apartments is a 10 unit Garden Style property located in the 4th Ward Historic District of downtown Albuquerque, NM. All units are 1 bedroom and 1 bathroom and were acquired in July of 2019. The original purchase price was $635,000 with a down payment of $158,750. The current market value is $1,200,000. The property has appreciated $565,000 (422% if sold today). Cash flow is strong, with a monthly residual income of $3000 and a average cash-on-cash return of +6% over 5 years. The tenants pay down $10,666 of the loan annually, providing a return of 6.7%. Tax benefits, including the mortgage interest deduction and depreciation, add another 3% annually. The property also serves as an inflation hedge, because inflation "erodes the weight" of the debt balance over time for an additional return of 3-5%.
In December of 2022, the building was refinanced and $200,000 in equity was pulled out to purchase another 10 unit building. This re-fi returned all our original investment, plus $41,250 extra...all tax free.
*It is important to note that past performance is not a guarantee of future results...but certainly, I strive for it!
Latest Acquisition: 108-110 Arno St SE
This historic property has 7 large units in the main building pictured here and two more units in a single-story building on the back of the property.
Originally built in 1877, this property has tons of old-world charm, including 10 ft ceilings, original molding and trim, and two original fireplaces.
On the top floor is a 1,000 sq ft penthouse apartment with soaring ceilings and a deck facing the Sandia Mountains.
Looking out to the Penthouse deck
Previous investment
Case Study of The Carriage House Apartments in Seattle, WA
This charming 3 unit building was originally purposed as a 3 bay carriage house with a caretaker's unit upstairs. Later, the lower level was converted to two more units. This was my first multi-family investment with a business partner.
Purchase price: $425,000 Sold in 2021: $800,000
Down Payment: $120,000
Key #1 Appreciation Total Appreciation in dollars= $375,000. Leveraged ROI is 312%
Key#2 Cash Flow $700/month=Cash-on-Cash return which averaged 7% annually
Key#3 Loan Pay down $11,400/year paid by tenants=9.5% ( annually)
Key#4 Tax Benefits Mortgage interest deduction/depreciation)=3% (annually), PLUS a cash-out refinance in 2016 returned $115,000 TAX FREE dollars (96% our initial investment.)
Key#5 Inflation Hedge Inflation "erodes the weight" of the debt balance over time=6%(Yearly)
This was a great investment! The timing was fortuitous on this project. Although we are based in Seattle, future acquisitions will be in the growing market of Albuquerque.
Photo Gallery: El Portal apartments
Spacious bedrooms with beautiful hardwood floors, vintage moulding and high ceilings throughout.
Photo Gallery
Interior Courtyard
El Portal Apartments
El Portal features vintage details in every unit.
