A group of private investors had bought a residential portfolio made up of 17 buildings with 242 apartments and a total area of 15,800 Sqm from a financial institute. The acquisition had been financed for around 40% by equity injection from the investors and the balance 60% through several mortgage loans on the properties granted by Valovis Bank and Deutsche Bank.
The internal management carried out by some of the investors did not go well: the vacancy level was too high and the rent income from the tenants was not enough to cover the loan instalments, the maintenance expenses and the general costs. With the support of few of the investors, we appointed a local property and facility management company with whom we restructured the portfolio: we sold 2 buildings which were not profitable, we refurbished all the vacant apartments and rented them at a higher price and we rescheduled some of the loans with the banks.
After this action the portfolio cash flow was sustainable and did not need any further injection from the investors. Besides, the yield income increased and the portfolio became attractive for a potential sale.