INVESTMENT STRATEGY
Acquisition Criteria
The following criteria are used to identify undervalued multifamily properties for acquisition, value optimizations, management, and disposition.
MARKET
Age: The 18–35-year-old market segment comprises 22% of the U.S. population.
Income: Renters earning $40,000 or more annually.
Price: Areas where rent is 30% or less of the median income.
Retiring Baby Boomers are downsizing and embracing maintenance-free multifamily living.
PROPERTY CRITERIA
Multifamily residential apartments
Pitched roof construction is preferred
Occupancy above 80%, except for properties requiring renovation-provided they are well-located and offer value-add opportunities.
TARGET VALUES
Size and Price: 50+ units in the $4MM – $50MM range
Returns: 7–10% Cash-on-Cash return with a minimum Debt Service Coverage Ratio (DSCR) of 1.25.
Type: C- to B+ properties located in C- to A areas
Property Vintage: 1970 or newer
Location: Emerging market areas with indicators for strong short-term and long-term economic growth
Emerging Markets
HOW WE CHARACTERIZE EMERGING MARKETS
People moving in, rather than leaving the area
Jobs being created and moving in rather than lost
Rents and property values rising
Local government dedicated to attracting jobs
Markets starting to absorb oversupply
Through extensive research, we analyze many indicators to identify emerging markets in the US. We start out by performing thorough market research that includes the following areas:
Job Growth Report
Population Growth
Path of Progress Reports
Local Economic Reports & Trends
Chamber of Commerce Reports
And many more factors
Emerging Markets
HOW WE CHARACTERIZE EMERGING MARKETS
People are moving in, rather than leaving the area.
Jobs are being created and moving in rather than lost.
Rents and property values rising.
Local government is dedicated to attracting jobs.
Markets are starting to absorb oversupply.
Through extensive research, we analyze multiple indicators to identify emerging markets in the U.S. We begin by conducting thorough market research, which includes the following areas::
Job Growth Report.
Population Growth.
Path of Progress Reports.
Local Economic Reports & Trends.
Chamber of Commerce Reports.
And many more factors.
Acquisition Practices
Each asset undergoes a thorough due diligence process to verify its physical and legal status, as well as to confirm valuations and ensure achievable investment strategies.
During the early asset evaluation phase, a debt and equity financing strategy is developed based on property type, scope of renovations, expected hold period, and investor objectives. Each asset is typically held for 5–10 years, depending on the business plan.
INVESTMENT DISCIPLINE
Asset selection involves a systematic and routine evaluation to identify favorable demand characteristics, such as job and population growth, demographic shifts, supply absorption rates, and supportive local legislation.
Markets with supply constraints receive the most favorable underwriting, while those showing signs of oversupply—such as surplus land, zoning changes, and increases in building permits—are avoided.
Value Add Strategy
Think of an apartment complex as a business rather than just a building. The more income it generates, the more it is worth. When we purchase a multifamily property, we look for specific opportunities to increase cash flow in various areas. These are referred to as 'Value Plays' or 'Value-Adding Components.'
VALUE PLAYS WE CAPITALIZE ON
Mismanagement caused by owner self-managing
Poor supervision of management companies
Deferred maintenance
High vacancies
Below-market rents
Some examples of value-add plays we implement:
Improve curb appeal by improving landscaping, adding dog parks, carports, etc. Residents will pay more when a property is in better condition and has amenities.
Purchasing a property that is 10% or more under current market rents. This gives us the opportunity to increase rents and immediately increase the value of the property.
Implement a water and sewage bill-back system to charge the residents for actual usage. Most apartment owners pay for all the water. When we bill back the residents it helps offset expenses and increase the cash flow. Through this system residents tend to become more frugal and will decrease overall operating expenses.
Improve unit interiors with new paint, appliances, countertops, and floors.
Adding a coin laundry facility to the complex.
See for yourself why investors love working with us!
