Mid Month Update March 15, 2015

Time is at a premium these days with all the deals we have going so let’s jump right in this month.
 
Funds:
 
Altus Hybrid Growth Fund

  • We closed on the two flip projects mentioned in last month’s update. 
    • The cosmetic fixer, 4 bed 2 bath house in Sacramento is nearing completion of rehab and will be back on the market within two weeks. 
    • After weighing the amount of work needed to be done against available resources we decided to wholesale the 2nd property in Contra Costa.  We were able to find a buyer almost immediately at a price ~30% higher than our acquisition price.  We will close on the resale of this property within 2 weeks of our purchase.  A quick win for sure!
  • The Palm Avenue property in Healdsburg is nearing completion and we anticipate having the property market ready in early April.
  • 100% occupancy continues to be the name of the game in the rental market for this portfolio. 

Altus Multi Tenant Income Fund

  • We were successful in negotiating a new offer on the property in Oklahoma City and are currently in contract.  Several team members are scheduled to head back there soon to continue due diligence.  This is a solid opportunity in an area with a diverse economic base.  We will be raising additional funds for this deal outside of the Multi Tenant Fund, so if you have any interest, please contact our office for more details. 
  • We were approached by an agent with a buyer looking to satisfy a 1031 exchange expressing interest in the units we own at the Villaggio complex in Sacramento.  The proposed purchase price would result in a large gain vs. our original purchase and we will therefore have a conversation with the agent about a possible offer and look into the ways in which this could be a benefit to investors. 
  • We continue to lease up units on our second complex (Shasta View) and are making some improvements at the property – i.e. horseshoe pits, dog park area etc. 

AE Commerce

  • In what might be the quickest regulatory endorsement ever, the lot split plans for this project were approved by the City of Rohnert Park last week.  The formal completion of the split will take some time, but in the interim we will continue to work with the tenant in the front building to get their list of renovations to be completed as part of any purchase agreement. 

AE One

  • We continue to work to liquidate this portfolio of homes per the original fund strategy. 
  • Since last month we had multiple offers on the townhome and are currently in contract to resell, and two additional properties sold. The Loomis property is scheduled to close on Tuesday. We have one property ready to go on the market and another two close to being ready for resale.

Opportunity Knocks:
 
Sonoma/Napa County:

  • Sonoma, CA – We closed on the 4 bedroom, 2.5 bath short sale and are one week into the four week, mostly cosmetic, rehab project.  With two new baths, fresh landscaping, paint, carpet and some fine tuning, this home should appeal to a wide variety of buyers looking to live in an established neighborhood in Sonoma.
  • Graton, CA – The vacant unit will be ready to be rented sometime next week.  The tenants in one of the remaining units will be out at the end of the month and next week we will be taking the final tenant to eviction court to finalize their move out date.  Work will begin immediately on these last two units once vacant.   
  • Sonoma, CA – Castle Road - I was onsite twice last week and things were really hopping!  The roof is on, gutters are coming, sheetrock/tape/texture is almost complete, irrigation is going in for landscaping, all of the cabinetry has arrived…the list goes on.  Although our timeline has been pushed out slightly from our original estimates we still have our sights set on having the property on the market in late April. 
  • Napa, CA – After suffering through several false starts, it looks like we finally have a serious buyer for this property.  The good news is we are in contract at a higher price than the previous buyers and we’re scheduled to close in about a week. 
  • Sonoma, Ca – We received approval for our infill development project of 7 townhomes close to downtown Sonoma. We already have a soft commitment from an investment group for the money needed to complete the project. If for some reason they are unable to provide the investment this project will be opened for investment opportunity.

Sacramento Area:

  • We expect to close this week on the 10 apartment units which we plan to flip after minor renovations and tenant stabilization.  This property is not in as good of a neighborhood as we would like for our hold properties but should still work well as a flip with the fallback being a fully cash flowing property should there be any changes in the market.
  • We have two additional complexes in contract and are working through our due diligence.  These would both be flip opportunities.  One is a 7 unit complex in the “hip” midtown area of Sacramento. The complex will be vacated and all the units will be redone top to bottom. Additionally one of the units, a 3/2, will be split into a 2/1 and a 1/1. We are negotiating some final items but should be closing this week.
  • Carmichael, CA - Condo units are still available either individually or in a discounted, bulk package.  We do have one unit at this complex currently in contract to be sold.

Other:

  • We were able to get the two off market complexes in Tulsa into contract (85 units) and will be looking at those properties in conjunction with our due diligence trip to Oklahoma City.   As mentioned before, 12 of the units were damaged in a fire and the owner is looking to move on.  We would be looking to purchase these properties with an eye toward renovating them to the top of market rents and then reselling.
  • Several team members recently spent time in Reno after identifying it as an emerging market.  We met with several brokers and bankers during our trip and have been analyzing deals to see where the opportunities lie in multi family and/or mixed use.  We anticipate writing on one or more properties within the next week.

 
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 detail, please reply to this email or call our office at (707) 932-5887.  We will gladly add you to our distribution list and/or schedule an appointment to discuss your investing needs further.
 
Best,

 
Kristy Brooks
Altus Equity Group, LP
Office:  707/932-5887
Fax:  707/544-2972