Investment Strategy
Acquisition Criteria
Target Markets
We have Primary and secondary objectives for any market that we target. We want these to be trending in an upward fashion. We are currently focused on seeking properties that meet our criteria:
-Primary Objectives: Employment & Population
-Secondary Objectives: Rent Growth, Income Trends, and Home Value Trends
Location
Currently, we're targeting well-located properties in Indianapolis, IN that prove to warrant long-term gains. We plan to expand into other MSAs within the midwest region in the near future to include:
St. Louis MO - Chicago IL - Cincinnati & Columbus OH - Detroit MI - and Fort Wayne IN.
Property Class
We are targeting B-/C+ class properties that have up to 75 units and were built after 1970. We focus on repositioning distressed properties in order to maximize value and potential returns.
Investment Strategy
We Believe in a 4-Phase Approach to our framework!
Acquisition:
In the acquisitions phase we primarily use the direct to seller approach. As a secondary method and to keep our pipeline full we do work with brokers as long as the numbers make sense for the company and its partners!
We are looking for long-term cash flow from our properties. The ultimate goal is to reach the level of infinite returns. The target is 3-7 year holds to reposition the property and maximize value in the market.
Funding:
Funding is achieved from two sources. Regional and local banks provide the largest portion of the funds. Down payment and closing costs for target properties are raised from passive capital partners who become shareholders of the profits from the property.
Project Management:
In the project management phase the focus shifts to repositioning the property by implementing the operating plan during the hold period.
Asset Management:
Asset management is one of the most overlooked phases of real estate. However, we believe that it is one of the most important. We ensure that an excellent and proven property management team is in place and they implement the operations strategy with precision.
It is our responsibility and duty to ensure resident relations are strong and any issues are being resolved promptly. Making a solid return is important, but even more so we want to ensure we make an impact!
Sample Deals
123 Small Deal Ave
8 Unit Deal
Property condition before acquisition:
● Deferred Maintenance
● Insufficient Management & Systems
Financing Sources:
● $450K of debt provided by local bank
● $120K down payment and $75K in rehab funds provided by capital partners
Solutions Implemented after acquisition:
● Provide Storage Units for Residents
● Implement Utility Chargebacks
● Upgrade Distressed Units
● Raise Rents to Market Rate
456 Large Deal Blvd.
75 Unit Deal
The Numbers:
● $2M Loan from Regional Bank
● $900K for down payment & renovations
Property condition during acquisition:
● Insufficient Systems and Management in place
● Deferred Maintenance
● Distressed Owner
Planned Solutions after acquisition:
● Modernize appliances and fixtures
● Sign new leases at market rate
● Improve tenant screening to ensure reliable collections
● Rebrand and increase curb appeal
● Implement efficient management procedures
● Add laundromat to facilities
● Implement Utility Chargebacks