Strategy
Our sole focus is to find Multifamily buildings within Michigan. As it becomes more challenging navigating through a supply-constrained market, we have a continuously improving process, criteria, and learnings that have allowed us to stay confident in finding good deals and operating them effectively towards the right financial objectives.
Top Of Funnel
Over the years of operating with our property (metro-Detroit) and partners footprint (Detroit, San Francisco, London), we’ve built a strong network of like-minded real estate investors and professionals. While we continue to comb through the on-market properties, it is these relationships that we’ve built that often present us with deals that are off-market. We let technology work for us via optimizing on collaboration tools to source, track, discuss, and make actionable progress. We have not yet initiated cold calling or direct mail campaigns, but these remain an opportunity as we further scale.
DEAL NEGOTIATION / CRITERIA
Our confidence in our investment selections is rooted in our underwriting and diligence process and the strict criteria that needs to be met.
Building type
Multifamily Apartments. Proven asset class with strong demand and performance to weather through all economic cycles
Location
Stable / High demand / Charming
Unit Count
> 20. Mitigates high vacancy risk with move-outs
Building opportunity
Building opportunity: Value-add. Having the opportunity for light-med renovations during organic turnover to justify higher rents + standard of living allows
Economic occupancy
> 85%. Helps towards day 1 positive cash flow
Financial Outlook
CoC Return: > 8% / IRR: >14%
Ultimately, for the investment to be worthwhile, we must acquire it at a price that aligns with its potential value and meets/exceeds the return thresholds above. That said, we know from our experience that the terms often matter more than the purchase price itself. Creative financing is key in navigating today’s high interest rate environment and we explore all the knobs available to us.
Operations
We are proud of the assets that we own and we believe that providing housing to others is a high privilege. That said, all our partners have a Finance background and recognize the need to be good financial stewards of these assets to enable all this in the first place. Over the years of operating our existing properties, we’ve partnered with 285+ vendors in metro Detroit and have built close relationships along the way. The most important in our opinion is that with our Property Management company, D Land Group. This property management company grew with us, starting at ~50 units when we partnered with them to now managing >600 units. The trust in this relationship + the ability to benchmark our cost structure allows us unique and targeted modes for optimization. Furthermore, we have built robust dashboards internally to be able to trace and scrutinize every dollar, when needed.
$ Exits
The large financial milestones for RE investments are either a refinance or a sale, usually dwarfing the ongoing operating cash flows. We will consider these exits opportunistically upon the successful execution of our business plans, with the goal of returning invested capital as tax-efficiently as possible within the expressed holding period.
