Have found opportunities, now need to find a syndicate.

Hi Martha,

I think you are in the "right place" but this is very much a start of a journey as yo have probably read in some other posts.  (an interesting read here Miami (ad)VICE )

Suggest you put together some concepts as to the size and location of the intended "deal" that will enable others to scope the opportunity.  You will then get some feedback on the basic research such as:
1/ your intended City / Suburb / Zip code demographics  – "great deal" but bad crime rate / unemployment / vacancy rates with no upside on jobs.   Versus overlooking Central Park REO for 50K 

2/ Intended entity structure to purchase – assume LLC that can have multiple "managers" (owners that can be a mix of individuals or other entities such as another LLC or Trust etc

3/ Concept for the asset – Buy – renovate – hold ….. who will manage and ongoing asset control / rent distributions   OR
   Buy-renovate-sell ….. some partners may wish to hold onto the asset which can then be handled by the managers selling down their share of the LLC or the individual units/flats are able to be sold off / retained.

These comments are starting points only …..
I am sure there are a few of us interested in what you are contemplating 

Apartment complexes are great to look into especially given that rental properties are very favorable right now due to the amount of homeowners that have went into foreclosure.  Occupancy rates on rentals have improved dramatically.  However, out of 50 complexes that are out there for sale, maybe 1 makes utmost economic sense.  You need a FULL and EFFICIENT team in place.  Realtor, Finance guy for future refinance, Asset Manager, Property Manager, Renovation crew.

In my opinion, the best opportunities are what are called "Value Add" assets.  This involves buying a neglected / distressed asset and some could be ugly, but that is the hidden beauty in it.  Buying – Stabilizing – Holding makes an enormous amount of sense in the right property.  If you buy a stable asset, you are buying on the wrong side and being sold a wholesale product.  If that is ok with you, then that is fine as well, but most equity is developed by adding value to a distressed/neglected asset in todays' current market conditions.

I am currently under contract for a C-Class 336 unit apartment complex in Orlando, FL.  We have negotiated a deal from the bank at $8,900 per door.  Market value from comparable sales is $25k to $30k.  At $8,900 per door, this development needs $2.5 million in Capital Improvements.  It is effectively going to make the complex nearly new.  So an investment of $2.5 million into the complex will bring our total to $16,300 per door, still considerably under market value.  Currently the complex is 15% occupied.  That will cover most of the current operating expenses which is a positive.  Rehabilitating the complex will take the $2.5 million, but if done according to plan, we will not have to lay out all of that money.  We will phase out construction and use the gradual increase in occupancy to pay for most of it.  So we will pay the $3 million for the asset and inject another $700k or so to get things moving.  From that point forward, we are expecting rental income to pay for the remaining improvements.

The complex will take 18 months to stabilize in our projections.  At 75% occupancy with the Net Operating Income that it will have, the complex will have a 9% Capitalization Rate, valued at $10 million.  The area occupancy rate is 93% so we budget and project conservatively.

The acquisition process is tough if you want the best deals.  In most cases, banks have no idea what is going on with the complex.  You must deal with the lender, the Receivership, the Asset Manager, and the Special Servicer.  It's time consuming, but worth it. 

Anyway, that is a traditional acquisition that we find very lucrative for the right investor.

We are constantly working with our contacts in the Florida area for bank owned or Deed In Lieu opportunities.  We do not have anything now, but if you send me a private message, I can send you a due diligence package that we provide once something comes up.  They are bank direct.  No middlemen.   If we assist with the sale, our asset management firm simply collects a commission.  We provide Receivership reports, Financials, Comparables, history, etc.  In most cases, quick action is required.  That is typical when dealing with the bank, otherwise we risk having them pool their non-performing notes together and selling to an investment bank.  I've lost several deals because of that!!!  If you would simply like any suggestions on investment in apartment complexes, I would be happy to assist in answering any.

Hi Marthamel,

I am definitely interested in what you have mentioned and am eager to find out more details.

Please contact me at [email protected]

Cheers

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