Mid-Month Update November 15, 2013
To kick off this month’s update we would first like to give a big THANK YOU to all those who contacted us expressing interest in participating in our recent acquisition of 15 condos in Carmichael. We were able to close out funding within 24 hours of offering the opportunity to you, our investors, and we closed on the property one week later.
The projects currently being managed by Altus are listed below. Please contact us if you would like to participate in any that are not yet fully funded. Note that they typically fill up fast, as evidenced by the response we had for the condo project!
Multi-Tenant Fund: A prospectus is now available for our new fund, the Altus Multi Tenant Income Fund, and we are currently scheduling appointments to present this opportunity to interested parties. We are excited about this particular fund because of the options it offers investors: diversification of risk, economies of scale, etc. The current real estate and socio-economic environment is such that we feel this is a great vehicle to produce strong cash flow to our investors, weather economic gyrations, take advantage of the current cheap debt environment, and realize benefits from increasing rent over time. We feel we can supply a strong, growing, and consistent cash return to our investment partners. With the added benefit of depreciation, investors may be able to enjoy their cash flow close to tax free. Please contact our office if you are interested and we will ensure you receive the full prospectus package. We are raising $5M and will not accept more than $1M from any single investor.
Single Family Fix and Flips: We have two properties currently in contract for resale with combined expected profits of over $125,000. We will close both of these transactions by the middle of December. We are closing today on a new flip in Napa with rehab work scheduled to begin Monday morning. We will do roughly $100,000 in improvements for an estimated $125,000 in profit. In addition to this flip, we have two other large rehab projects (over $150,000 in repairs and improvements at each location) and three smaller projects (~$50,000 in improvements per location).
As previously mentioned, we closed on 15 condos on a single purchase agreement last week. Most of the condos are currently rented and as those leases expire they will be resold. Vacant units are in the process of being rehabbed and will be put on the market at the end of next week. We estimate it will take <12 months to resell all 15 units.
Office Building: We have an 18,000 sqft. office building in Santa Rosa, CA in contract with a nationally recognized tenant occupying 70% of the space and providing enough rent to give the property a 9.3% cap rate based on current income. There is substantial upside in this property through repositioning the building to additional tenants but the ultimate value of this property is that it is a long term cash machine based on great loan terms and increased rents, both of which will be realized post-stabilization. We will begin raising approximately $1.05M for this opportunity in the next few weeks once we receive seller documentation.
Retail Building: We are still in contract on a retail building in Sebastopol, CA. The upside in this property will be derived through leasing two vacant units and in simply cleaning up the accounting. The purchase amount of investment needed is relatively small due to the financing that will accompany this property and we have lined up a patient investor who wants a combination of cash flow and appreciation and can use the benefits of great depreciation. Depending on the Seller, we hope to close within the next few weeks.
If you have any interest in any of these investment opportunities please contact our office so that we can set up a time to have a conversation and learn more about your investment profile. I look forward to sharing more news in future newsletters about the value and benefits of investing with Altus.
Altus Equity Group, LP