The LAAA Team of Marcus & Millichap is pleased to present this unique offering at 6727 Orion Avenue in Van Nuys, CA. Situated on nearly an acre of land, this multifamily offering is comprised of 5 detached homes on one lot, all of which have their own private, fenced-off yard. 

This offering has a great unit mix of homes with (1) 1 Bed / 1 Bath + Den house, (2) 2 Bed / 1 Bath homes, (1) 3 Bed / 1 Bath house, and in front there is a large 1,700+ sqft 3 Bed / 2 Bath house with a private gate, front yard, and pool in the back. In total, there is 5,624 square feet of building between the homes, making the average house 1,125 square feet, and these homes range from 800 square feet to 1,700+ square feet. This property has two separate automated gates and secured entrances. The first gate is private for the front house which is completely walled off from the rest of the property, and the second gate leads down a long driveway where you'll find the remaining 4 homes. 

Seller's Significant Renovations
Over the 20+ years of ownership, this mom and pop seller has taken pride in their management by meticulously maintaining the property and never shying away from spending money on capital improvements. According to the Sellers, they have spent an estimated $165,000 of capital improvements, most of which were done in the past 5 years.

To see a list of all the seller's capital improvements to the property, please CLICK HERE.

Great Value Add Strategies
First, the most obvious value add for this property is to get rents up to market. According to our market research, similar single family homes in the area are renting for about $3.33 per square foot. Using this as a guideline, there is over 60% upside potential in rents if the buyer was able to get these units vacant and re-lease them on the open market. 

Another strategy for adding value would be to build ADUs. The 2 bed home at the far back of the lot has the largest private outdoor area which is about 9,000 - 10,000 square feet of space. If an investor was going to build 2 detached ADUs, this large area in the back would be the ideal place to build them, and those new construction ADUs would be worth a lot more than they would cost to build.

The last avenue to add value, which has the most amount of upside potential but is also not guaranteed to happen, would be to split the lot into two parcels without changing the zoning. In other words, the investor would work with the city to re-draw the parcel lines while maintaining the current R1 zoning. From our experience, redrawing the parcel lines is much more likely to be approved by the city as compared to re-zoning the lot, which has a very low likelihood of being approved.

This strategy would entail splitting the large front house and the 4 homes in back into two separate parcels, leaving a true single family home that could be sold off separately, and a very attractive 4-unit in back comprised of separate homes. Since the 4 homes in back already have a separate driveway entrance, there would not need to be any changes to the current lot layout. If splitting the parcels was achieved, the buyer would be left with a large 3 bed / 2 bath house with a pool on an estimated 0.4 acre lot and 4 homes with a private driveway entrance on a separate 0.5 acre lot. The front house would be worth an estimated $1.2M according to comparable single family home sales in the area which are selling for an average of $700 per square foot. Then, the 4 unit with a separate parcel in the back would be worth around $1.6M even with the low rents in place. In other words, if a savvy investor was able to achieve this lot split, the property would be worth around $2.8M even without getting a single unit's rent up, and also before any ADUs were built.

We have calculated the maximum value potential of this property to be about $4 million assuming the buyer successfully splits the lots, gets the rents to full market potential, and builds 2 detached ADUs. That is $1.8 million of maximum upside potential, making this a very exciting opportunity to a value-add buyer.