NOI Workout Analysis
The Value-Add Math
Pre-Loaded Property Inputs
Units
35
Current Rent
$1,200/unit/mo
Market Rent
$1,450/unit/mo
Renovation Cost
$500,000
Portland Class B/C median is ~$1,420/unit. Current rents at $1,200 reflect years of undermanagement.
The Full Math
Gross Rent Increase
$8,750
/mo increase (35 units × $250)
Annual NOI Lift
$105,000
/year
Current NOI
$188,730
New NOI
$293,730
NOI Lift
+$105,000
Cap Rate Valuation
Current Value
$2,698,572
New Value
$5,874,600
Cap Rate Used
5.00%
Net Equity Created
$2,674,600
New value $5,874,600 minus $2,700,000 purchase price minus $500,000 renovation
New Property Value
$5,874,600
– Purchase Price
–$2,700,000
– Renovation Investment
–$500,000
= Net Equity Created
$2,674,600
You invest $500K in renovation and create $2.67M in equity. That's a 5.35x multiple on your renovation dollars.
Renovation ROI
634.9%
Cash-on-Cash Return
17.7%
DSCR
1.95x
Value-Add Thesis
Why Topanga?
Portland Class B/C assets are trading at a discount as institutional capital pivots to coastal markets. Topanga carries rents 17% below market — typical for properties where ownership hasn't been active. The renovation scope is modest: unit turnover and selective capex unlocks the full rent premium without over-improving for the submarket.
Market Context
Portland metro vacancy has stabilized below 5%. Rent growth of 3–4% annually is the baseline; the workout accelerates that curve. Current ownership vacancy drift and deferred maintenance are masking the true NOI — $105K NOI lift is conservative given the $250/unit gap.