Road trip, anyone?
As my team expands its portfolio in Alabama, we are touring five properties under contract in Huntsville, Birmingham and Mobile. Jump in the car with us and take a look at multifamily properties through the eyes of a syndicator in search of opportunities to add value and contribute to the community at each apartment complex.
PROPERTY #1: TREE HAVEN
Our first stop in Huntsville is a 71-unit property called Tree Haven. We just closed on this deal, and in general, the apartments are in great shape. However, there are several value-add opportunities: The roof needs work, as do the rusty stairwells. On the upside, half of the A/C units were recently replaced, and half of the units have already been renovated.
PROPERTY #2: WEDGEWOOD
Our next stop in Huntsville takes us to Wedgewood. We plan to resurface the parking lot, but other than that, the property is in good condition. The major opportunity here is that the apartments are only 55% occupied. In addition, the units are already in the process of being upgraded, giving the property a lot of upside.
PROPERTY #3: GARDEN PLACE
Our final stop in Huntsville is Garden Place, the roughest of the three properties. The big issue here is that the trees are in desperate need of trimming. We also plan to address other cosmetic issues like a trash receptacle facing the street and large cracks in the sidewalk. The good news is, the apartments have a high occupancy, and we are already beginning to get the rents projected when we put the property under contract three months ago.
PROPERTY #4: RED TOP APARTMENTS
A road trip to Birmingham brings us to Red Top Apartments. The beautiful thing about this property is that there is no deferred maintenance beyond resurfacing the parking lot. The red roof is brand new, and half of the units have already been turned over. This multifamily is what we call a self-comping property, meaning it has a low and high rent rate. As we upgrade the apartments, the rents will increase to the higher rate.
PROPERTY #5: STONE RIDGE
The last stop on our tour is a 300-unit class A multifamily property in Mobile called Stone Ridge. This $40M resort-style property has beautiful landscaping and a large fitness facility, and the model is gorgeous. As you may have guessed, this is not a value-add deal, but it is not without its upside: The tenants consist of professionals and the senior population, making the 3BR units difficult to rent. Our plan is to change the layout of those units to increase occupancy.
Large or small, modest or posh—there is upside to each of our new multifamily investments. And learning to identify those value-add opportunities at each multifamily investment property leads to an increase in occupancy as well as revenue!
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