Mid Month Update May 15, 2015
Developing our network was the name of the game this past month. Forrest gave a great presentation on “Planning to Invest” at the local YPN chapter’s Professional Development Day and Kristy and Ali spoke at an apartment symposium in the South Bay. We spent some time in Southern California meeting with existing and potential new investors and we have a brief presentation scheduled for a local angel investing group this coming week. We continue to meet great people and look forward to cultivating extraordinary relationships.
To kick off this month’s update I’d like to start with an $8.3M apartment portfolio that we just put into contract. The package includes four properties located in in Yuba City, Marysville and Sacramento totaling 165 units. Two of the properties would be resold almost immediately and the remaining two will require capital improvements to bring occupancy up from 80%. We are in the very early stages of due diligence on this deal but are optimistic based on what we have seen thus far.
Altus Hybrid Growth Fund
- The cosmetic fixer, 4 bed 2 bath house in Sacramento is a few days away from completion of rehab and should be on the market by the end of this week.
- After jumping through many hoops with the City of Healdsburg, the property at Palm Avenue is nearing completion and is expected to be on the market in mid-June.
- We purchased a 2 bedroom, 1.5 bath flip property in Sacramento on 38th Street. Rehab has begun and is expected to take ~4 weeks.
- Occupancy remains stable at 100% for this rental portfolio.
- We have one four-plex currently on the market for resale. Prices on this type of product are way up from when we purchased so there is considerable equity to harvest for our investors. This particular property is also one of our poorer performers from a cash flow perspective so this is an opportunity to pull chips off the table without greatly reducing the Fund's ongoing performance.
Altus Multi Tenant Income Fund
- The purchase of the Cedar Hills complex in Oklahoma City is still on track. As a reminder, we are placing the remaining balance of funds from the MTIF in this property and raising an additional ~$900K in equity to complete the purchase. We have just a few Preferred Shares remaining. If you are interested, please contact our office for a marketing package. The PPM should be available within the week for Investors’ review.
- The Villaggio property in Sacramento continues to operate in a stable manner and is currently 100% occupied.
- The Shasta View complex in Redding is also now 100% occupied.
- Our commercial leasing agent is marketing the space that went vacant in the back building at the end of March.
- 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 have been submitted for review and we hope to have the official lot split done sometime over the summer.
- We continue to work to liquidate this portfolio of homes per the original fund strategy.
- We currently have one property in escrow to sell, just had a property go vacant and hope to have it on the market for sale in a couple weeks after some repairs, and then have only two remaining properties to liquidate.
- Sonoma, CA – “Altus’ best project yet”, said several third party real estate agents familiar with our work. This cosmetic rehab project on Estrella Drive looks like a big win for Altus. Within hours of the Broker’s Open we had an offer for $100K over asking and the following day we received an all cash, 14 day close backup offer at the same price. We are scheduled to close on May 22nd. Here is a link to the property:
- Graton, CA – 3 Units:
- The front, left unit is currently leased at substantially greater than anticipated rents.
- The back unit will be finished this week and our property manager will be placing a tenant in that home.
- The front, right unit is approximately3/4 of the way through its remodel and we anticipate having that work complete by the first week of June when we plan to list the property for resale. This unit will be offered vacant in the event an owner occupant wants to purchase the property.
- Sonoma, CA – Castle Road – We are marching toward a June 25th listing date. All cabinetry has been installed, countertops are going in this week, tile is nearing completion and flooring starts this week along with landscaping. You will soon be receiving an invitation to an “Altus Only Open House” event at the property which will showcase the completed project.
- Sonoma, CA – We are making a few small revisions to the drawings for the small home in Boyes Hot Springs. We hope to have our plans submitted this week with work to begin as soon as they are approved. For this project we will be demolishing and replacing nearly all of the existing residence and then adding an additional 400 square feet of new construction.
- Sonoma, Ca – We presented the 7 unit townhouse project to the design review committee and with the exception of needing to change our exterior paint colors we received approval. We received a tentative commitment from an investor for the investment needed to complete the project and are currently working through the details of that agreement. If for some reason that investor does not come through we will be looking to our investor network to raise the investment needed. This has a higher risk profile than most of the opportunities we offer to our network but also has a much higher expected return as a result.
- Minor renovations are underway at the 10 unit apartment complex. This property will be resold once stabilized.
- Carmichael, CA – We sold an additional condo unit to an owner occupant, leaving us with four units. We are listing two this week with tenants in place and giving another a 60 day notice so that we can rehab the unit and sell it vacant. The remaining four units 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.
- Tulsa, OK - The two off market apartment complexes did not close due to an issue with title. We have every intention of closing the transaction once the matter affecting title is resolved.
- The two back units (main house and granny unit) of our infill development project in Windsor are complete. The buyers will be closing this week. The second, front home looks like it will have a mid-June on market date.
- We are continuing to evaluate deals in Oklahoma City, Reno and other emerging markets. Off market deal flow is increasing as we continue to nurture our broker relationships.
- Construction has begun on our new Altus headquarters. Our investor network is providing the construction loan which is supposed to be funded this 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.
Altus Equity Group, LP