Mid Month Update April 15, 2015

Howdy y’all!
 
Forrest and I just returned from a 3 day apartments course/symposium in Dallas and I still can’t get over how friendly everyone is in Texas.  The workshop was full of great information that will help refine our expertise in the multi family class and it provided an excellent opportunity for networking as well. 
 
Read on to learn more about current opportunities. 
 
Funds:
Altus Hybrid Growth Fund

  • We are scheduled to close this week on the wholesale flip property in Contra Costa County.  We will have held the property for a total of 44 days and realized an approximate annualized 80% return on our investment.
  • The cosmetic fixer, 4 bed 2 bath house in Sacramento is almost finished with just windows remaining to go in.  We anticipate the property will go on the market the first week of May.
  • We continue to be presented with challenges from the City of Healdsburg related to the Palm Avenue project which have further delayed our timeline.  At this moment, we expect an on market date of June 1st.
  • Occupancy remains stable at 100% for this rental portfolio. 
  • We are continually reviewing flip opportunities for this fund and while the market has tightened up significantly, we remain optimistic that our broker network will bring us our next deal soon.

Altus Multi Tenant Income Fund

  • We have completed our due diligence on the Cedar Hills complex in Oklahoma City and are moving forward with the financing.  A local property management company has been identified and we are working to finalize our contract with them.  This is a well maintained property with opportunity for upside through increased rents and tenant retention programs which will result in reduced turnover costs and vacancies. 
    • We will be placing the remaining balance of funds from the MTIF in this property, and will be raising and additional ~$900K in equity to complete the purchase.  A property package is now available and interested parties can contact the office for a copy. 
  • The Villaggio property in Sacramento continues to operate in a stable fashion and is currently 100% occupied.
  • The Shasta View complex in Redding now has only 4 remaining units to lease up.

AE Commerce

  • The tenant in the front building continues to express interest in purchasing their building once the lot split is finalized and we are working on a proposed list of renovations to be completed as part of any purchase agreement. 
  • We are working with our commercial leasing agent to market the space that went vacant in the back building at the end of March.  Now that the tenant is out it will be easier to show the space.
  • We have received planning department approval for the lot split dividing the property into two parcels, each containing one of the existing buildings. The drawings for the recorded parcel map should be submitted for review shortly and we hope to have the official lot split done sometime over the summer.

AE One

  • We continue to work to liquidate this portfolio of homes per the original fund strategy. 
  • Since last month we closed on the Loomis property, the townhome and one single family residence.  Currently we have one house that we recently listed that received 5 offers and another nearing completion of rehab prior to resale.  Three more properties will go vacant in May and they will be renovated and resold. Once those three properties are liquidated this fund will be closed and we will be able to calculate the investor returns.

Opportunity Knocks:
 
Sonoma/Napa County:

  • Sonoma, CA – We are wrapping up the mostly cosmetic rehab project on Estrella Drive and will be on market on April 30th.  Landscaping is going in this week along with tile in the baths and kitchen.  A home on the same street that recently listed went into contract within hours of hitting the market which is a great sign for us as we will be priced ~$250K below this property and ours will be completely remodeled whereas the other home was not.
  • Graton, CA – 3 Units:
    • Tenants in the front, left unit are moving in today and we were able to lease that home for more than we expected which will add value upon resale. 
    • The front, right unit is approximately half way through its remodel and we anticipate having that rent ready the middle of May.  
    • The tenant in the back unit is vacating today and work will begin shortly on that unit.  Despite delays in tenants moving out, we expect all 3 units to be complete and on the market on June 1st which still meets our original timeline. 
  • Sonoma, CA – Castle Road – Kitchen cabinets and bath vanities are being installed, tile is going in and interior painting is underway.  Work is starting on the pool house and landscaping will go in shortly after completion.  The home will have a country, modern feel and will come complete with its own bocce court and chicken coops – all the rage in Sonoma.  This is the largest single family project Altus done and as a result our timeline has been pushed with an expected on market date at the end of May. 
  • Napa, CA – After months of delays caused by damage from the earthquake that led to nervous buyers, we closed on this property.
  • Sonoma, CA – we closed on a small home in the Boyes Hot Springs area.  This is a sizeable project where we will essentially rebuild the home, adding ~500 sqft and a garage.  We are working with an architect on drawings and will be raising money for the rehab portion in a few weeks.  Please contact me if you are interested in lending on this project.
  • Sonoma, Ca – After obtaining planning commission approval in February we are progressing to present to the design review committee later this month. We have received an initial commitment from an investment group for the investment needed to complete the 7 townhome project and are currently working through the details of that agreement.

Sacramento Area:

  • We closed on the 10 apartment units and have new property management in place that is working to stabilize the tenant base.  Minor renovations including pest work are underway. 
  • We closed on a 6 unit deal and immediately flipped the property to another investor for a ~$35K profit.  Not bad for a day’s work.
  • Carmichael, CA – We sold one condo unit to an investor who placed a tenant immediately at rents indicating rental rates continue to increase. We are in contract to close on another unit in ~2 weeks and are awaiting final contingency removal.  The remaining four units are fully rented up and while available individually, are also available for a bulk discount with a purchase of $432K with the possibility of a portion of the financing being carried by Altus.  Contact our office at (707) 932-5887 if you have any interest.  These are a great option for a 1031 exchange. 

 Other:

  • The two off market apartment complexes in Tulsa are scheduled to close this Friday.  In a last minute negotiation we were able to get an $87K credit and the Seller also agreed to carry back financing for a dollar amount in excess of what a bank loan would have been, thereby reducing the funds needed to close.  A team member will be on site next week to kick off the rehab work and meet with management.  Once renovated, the units will be rented to the top of the market before resale.  However, we are also considering the option of holding the units, and will make that decision once we are into the project further. 
  • Our infill development project in Windsor is nearing completion with one home and a granny unit already presold and a second home that will go on the open market.  All 3 units are scheduled to be finished the middle of May.
  • We are continuing to evaluate deals in Oklahoma City, Reno and other emerging markets.  Off market deal flow is to be increasing as we continue to nurture our broker relationships.

 
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