Mid Month Update October 15, 2014
Whoops! This week was so busy in our office that the deadline for this newsletter came and went without any action on my part. My apologies to our readers. Here’s a summary of what has been occupying our time at Altus:
Altus Hybrid Growth Fund
- The flip market has been extremely tight, however we are scheduled to close on the purchase of a single family home on Palm Avenue in Healdsburg early next week. This is a 3 bedroom, 2 bath major fixer near downtown and Memorial Beach for those of you familiar with the area. We anticipate the project taking ~5 months.
Altus Multi Tenant Income Fund
We are actively reviewing several complexes per week and pursuing those that look promising. We remain diligent in verifying the performance of the properties to make sure they meet our standards. Currently we have offers out on a couple complexes in Sacramento, are dancing around reoffering on a complex in Healdsburg and are in discussions on two complexes in Tulsa, which is a market we really like.
- We closed on the sale of a flip project last week in Sonoma which sold for $85K over our proforma sales price. The property was located on Balsam Ave. and was an adorable cottage with old world charm and all the latest amenities.
- This week we were fortunate to purchase 3 homes on one lot where we plan to do a lot split to maximize resale value.
- We are scheduled to close today on the highest priced single family flip in the history of Altus! This is a $1.3M three bedroom two bath home on arguably the most desirable street in Sonoma. It is bikeable, walkable, and hikeable to town and all of the trails, wineries, and town amenities. After a short rent back to the Seller, we will begin major renovations to the home which is expected to fetch well over $2M at resale.
- We closed on the resale of a property in Santa Rosa that we owned for only several weeks and sold for substantially higher than what we purchased it for. This was a property we bought through an auction and as part of the sale we agreed to carry back a portion of the sales proceeds for the buyer.
- The home we have in Napa that suffered damage from the earthquake has had all repairs completed and has been re-listed. The market there is understandably slow after things got shook up so we are offering some old-school incentives to the agent who brings us a buyer.
- Last week we closed on the sale of two condo units and put another unit into contract. We also completed rehab on a vacant unit which went live on MLS. At the end of the month we will have another unit coming vacant that will get rehabbed and listed for sale sometime in mid-November.
- Interested in owning income property or looking to do a 1031 Exchange? We have just a few remaining condos for sale in the Carmichael complex. We have a lender in place to provide financing and the required cash down is approximately $35K per unit. Please call our office at (707) 932-5887 for more information.
- We are continuing our due diligence on a 19,000 sq. ft. off market retail center in the Sacramento area. The center is fully leased but at lease rates well below the current market. The initial yield to the investors will not be quite as high as other leased investments we have funded, but due to the size of the repositioning the total returns are expected to be even higher than we are normally able to produce.
Lastly, in the area of continuing education, two team members from our office were in Boston last week for a 3 day workshop on managing property managers to maximize the potential cash flow and value of multifamily properties. Without guidance view property managers will put in the effort to improve property performance and when even slight improvements to either rent collections or expense outlays results in substantial increases in property value it is vital to guide the managers towards property improvement.
If you do not currently receive our Opportunity Knocks emails with specific investment opportunities or if you have any interest in discussing any of the above opportunities in greater depth, please respond to this email or contact our office at (707) 932-5887. We will happily add you to our distribution list and/or schedule an appointment to discuss your investing needs further.
Altus Equity Group, LP