The multifamily sector has a significant advantage over other real estate sectors. Shelter is a basic human need that will never go away.
Supply vs. Demand
Demand for multifamiy units far outpaces the supply coming on line.
Risk vs. Reward
We buy Class B & C properties because they offer the best risk/reward ratio. Regardless of the stage of the economic cycle, the demand for workforce housing is more resilient and will remain robust.
Millennials are buying homes almost 10 years later in life than the previous generation, pushing them to rent apartments for longer.
Construction of workforce housing has been limited due to rising construction costs. Higher prices have caused new multifamily construction to be centered around Class A product that requires higher rents to justify higher construction costs.
The largest age cohort in the United States are the Baby Boomers, they are increasing renter by choice, choosing to downsize and lower overhead expense.
Class B & C product continues to be an attractive value alternative for renters who seek the best value for their money.
As of Q1 2019, home prices were rising faster than wages in most markets.
Purchase Class B & C value-add multifamily properties with an emphasis on solid cash flow.
Invest in High Growth secondary cities, where cap rates are 1-2 percent higher than in the primary markets.
Renovate apartment interiors to the modern and fresh standards sought by today's tenants.
Add community amenities and enhance services offered to tenants.
Implement a customer-centric property management strategy and correct management inefficiencies.
Reimagine and rebrand properties to attract a financially stronger tenant base.
Leverage out trusted business partners, broker colleagues, and equity relationships to source the right deals.
Increase occupancies, raise rents, and lower expenses to generate attractive Cash-on-Cash and IRR returns.
We have identified the following states to have the best opportunities for our strategy.
Institutional Class B/C rated communities construction post-1970, located in A or B locations, stabilized or with value-add or reposition-rehab potential.
Consideration of A-rated communities will be given to special opportunities.
Number of Units:200+
Purchase Price:$10 million to $50 million
Equity Investment:$1 million to $20 million
Strategy:Renovation and Repositioning by solving management and property issues.