Investment Strategies

Opportunistic
Opportunity
Properties that are mismanaged, need capital improvements, have delinquent tenants, low occupancy, or rent significantly below market
Strategy
Remove delinquent tenants and create
vacancy to upgrade units, execute significant capital improvement plan, lease-up units at market rents, refinance or sell
Characteristics
18.0%+ project level IRR
Limited or no cash flow until sale
Bridge debt
70%-85% leverage
Fixed or floating interest rate
2-4 year hold period
Target 1960-1990 construction
Value-Add
Opportunity
Properties that are well occupied but are
renting below market due to
undermanagement, lack a competitive
amenity set, or have dated interior finishes
Strategy
Maintain occupancy while executing the
capital improvement plan, generate cash flow
and capital appreciation, refinance or hold
long-term
Characteristics
16.0%+ project level IRR
Target stabilized cash-on-cash of 9.0%+
Bridge, mini-perm, or permanent debt
65%-80% leverage
Floating or fixed interest rate
Short or long-term hold period
Target 1980-2010 construction
Opportunistic
Opportunity
Properties that are well occupied, have a
slight value-add component, and strong
tenant profile and location
Strategy
Acquire the property with long-term fixed or
floating rate debt, maintain occupancy and
implement a slight capital improvement
program
Characteristics
14.0%+ project level IRR
Target stabilized cash-on-cash of 7.0%+
Permanent debt
65%-80% leverage
Floating or fixed interest rate
Long-term hold period
Target 1990 construction and newer

Deal Flow

300 Opportunities Reviewed
200 Advanced Underwriting
Significant Deal Flow 
Texas had over $25 billion of
multifamily transactional volume
per year and relationships with
brokers and owners provide many
investment opportunities2
40 Property Tours
25 LOIs
Market Knowledge
Extensive experience in the market
allows for a deep understanding of
achievable rent levels, operational
costs, and submarket attributes
16 Best and Final
2 Acquisitions
Selective Process
Disciplined underwriting leads to
only the best opportunities being
acquired

Creating Value

Rent increases create a lot of value
$50 rent increase at 5.00% cap rate = $12,000 of value per unit
$100 rent increase at 5.00% cap rate = $24,000 of value per unit
Elevate rents to the highest level the market will support through offering higher quality finishes, organic rent growth through supply and demand imbalance, exterior and amenity improvements
Purchase below replacement cost, acquire in markets that have positive population growth, employment growth, and favorable tax trends, while avoiding high crime areas
Reduce expenses through protesting taxes, utilizing trash and energy brokers, fix reoccurring maintenance issues upfront, utility conservation, and focus on resident retention
Use capital improvements to grow NOI by offering residents best-in-class amenities and upgrading unit interiors to modern styles

Capital Improvements

Over $37 million of renovation projects completed across more than 24 projects
Maintenance
Deferred Maintenance and Safety
Address any ongoing maintenance issues, lender required repairs, and safety issues:
Roof repairs/replacement
Parking lot resurface/replacement
Plumbing and hot water systems
Exterior lighting
Perimeter fences and gated entry
Stair treads
Landings and walkways
ADA compliance
Exterior
Aesthetics, Amenities, Branding
Generate demand from attractive curb appeal, competitive amenities, and marketing:
Rename the property and install new signage and color scheme
Improve pool area with outdoor kitchen, splash pad, pergola, BBQ area, and fountain
Remodel leasing office and add clubhouse, business center, and fitness rooms
Add carports and garages
Landscaping
Extend patios and balconies to provide private outdoor space
Security cameras
Solar screens or window replacement
Interior
Unit Renovations And Technology
Upgrade interiors to the top level the market will support:
Stainless steel or black kitchen appliances
Stone countertops with undermount sinks
WiFi enabled smart thermostats
Contactless package delivery
Keyless door locks
Faux wood flooring and new carpet
Modern lighting and plumbing fixtures
Upgraded cabinetry
Water and electrical conservation
Washer and dryer appliances
Kitchen backsplash

Environmental, Social, Governance

Utility Conservation
Install low-flow showerheads and faucets, along with energy efficient exterior lighting
Reduce Waste
Work to reduce landfill waste by promoting recycling onsite
Social
Improve the quality of living for working class Americans of diversified backgrounds
Transparency
Frequent investor level reporting that includes property level financial information, bank transactions, and key performance indicators("KPI")
Philanthropy
Partner with City Scape to offer complimentary unit for residents that are in need
Fiduciary Responsibility
All decisions are made to preserve and grow our investors capital
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