Poppies Corp. 2005
Projects
3rd Street Condos
Conversion of 13 unit Building to Condominiums
Long Beach, CA
Please Note: The following project was placed under contract by others who approached Mark Frauman to arrange (and represent) investment funding and provide operational and organizational support and experience. The physical conversion is not a construction project undertaken by Poppies Corp.
Project Summary: A new California LLC was formed for a condominium conversion project on a 13 unit property on 3rd Street in Long Beach, about ¼ mile from the beach. The three-story property with grade level parking consists of six flat units, six with cathedral ceilings and one two-story townhouse. Each unit is just over 850 square feet with two bedrooms and two baths.
Status: The property was originally built to condominium specification so the physical conversion expenses were minimal. The management team retained to oversee the conversion process had an extensive and successful record of conversions in Long Beach and strong relationships with City personnel helped expedite the process. In addition, Long Beach was very receptive to conversion projects as it creates a more favorable owner/renter ratio.
Financial Summary: The property was purchased at a price of $2,372,500. In addition, approximately $400,000 was required for expenses related to the physical conversion process, “soft” costs (examples include taxes, loan fees, legal, HOA formation, accounting, tenant move out incentives, closing costs, etc.) and operating expenses. Construction was minimal as the only work required for the conversion was general fix-up and upgrades. Projected revenue at the time of purchase from the sale of the condos was estimated at $3,500,000 (approximately $270,000 per unit or $310 per square foot). Actual sales averaged almost $60,000 higher per unit as the market conditions remained strong through the end of 2005.
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