OUR INVESTMENT STRATEGY
OUR INVESTMENT STRATEGY
Acquisition Practices
Each asset undergoes a thorough due diligence process to confirm the physical and legal status of the property and to confirm valuations to ensure achievable investment strategies.
Early in the asset evaluation phase, the debt and equity financing strategy is developed based on a number of factors such as property type, magnitude of renovations, expected hold period and investor objectives. Each asset is typically held 5-10 years depending on its exact business plan.
INVESTMENT DISCIPLINE
Asset selection involves a systematic, routine evaluation to identify favorable demand characteristics, i.e., job and population growth, demographic shifts, supply absorption rates and positive local legislation.
Markets with supply constraints receive most favorable underwriting. Markets with signs of oversupply such as surplus land, changes in zoning and increases in building permits are avoided.
Emerging Markets
HOW WE CHARACTERIZE EMERGING MARKETS
People moving in, rather than leaving the area
Jobs being created and moving in rather than lost
Rents and property values rising
Local government dedicated to attracting jobs
Markets starting to absorb oversupply
Through extensive research, we analyze many indicators to identify emerging markets in the US. We start out by performing thorough market research that includes the following areas:
Job Growth Report
Population Growth
Path of Progress Reports
Local Economic Reports & Trends
Chamber of Commerce Reports
And many more factors
Acquisition Criteria
The following criteria is used to identify undervalued multifamily properties for acquisition, value optimizations, management and disposition.
MARKET SEGMENTS
Age: The 18-35 year old market segment is 22% of the U.S. population
Income: Renters who earn $40,000 or more annually
Price: Where rent is 30% or less of the median income
Retiring Baby Boomers are scaling down and enjoying maintenance free multifamily living
PROPERTY CRITERIA
Multifamily residential apartments
Pitched roof construction preferred
Occupancy above 80% with the exception of properties that require renovation, providing properties are well located and present value-add opportunities
We prefer to invest in properties where no more than 30% of the unit mix can be made up of one-bedroom apartments
TARGET VALUES
Size and Price: 50+ units in the $4MM – $50MM range
Returns: 7-10% Cash on Cash, Minimum Debt Service Coverage ratio of 1.25
Type: C- to B+ properties located in C- to A areas
Property Vintage: 1970 or newer
Location: Emerging market areas with indicators for strong near and long-term economic growth
Each asset is typically held 3-7 years depending on its exact business plan
Value-Add Strategy
Think of it as a business rather than a building. The more income it generates, the more it is worth. When we purchase an apartment complex, we are looking for specific opportunities to increase the cashflow in different areas. These are called “Value Plays” or “Value Adding Components”.
VALUE PLAYS WE CAPITALIZE ON
Some examples of value-add plays we implement at Property Acqusition Cooperation, LLC.
Improve curb appeal by improving landscaping, adding dog parks, carports, etc. Residents will pay more when a property is in better condition and has amenities.
Purchasing a property that is 10% or more under current market rents. This gives us the opportunity to increase rents and immediately increase the value of the property.
Implement a water and sewage bill-back system to charge the residents for actual usage. Most apartment owners pay for all the water. When we bill back the residents it helps offset expenses and increase the cash flow. Through this system residents tend to become more frugal and will decrease overall operating expenses.
Improve unit interiors with new paint, appliances, countertops, and floors
Adding a coin laundry facility to the complex
Below market rents
Acquisition Practices
Each asset undergoes a thorough due diligence process to confirm the physical and legal status of the property and to confirm valuations to ensure achievable investment strategies.
Early in the asset evaluation phase, the debt and equity financing strategy is developed based on a number of factors such as property type, magnitude of renovations, expected hold period and investor objectives. Each asset is typically held 5-10 years depending on its exact business plan.
INVESTMENT DISCIPLINE
Asset selection involves a systematic, routine evaluation to identify favorable demand characteristics, i.e., job and population growth, demographic shifts, supply absorption rates and positive local legislation.
Markets with supply constraints receive most favorable underwriting. Markets with signs of oversupply such as surplus land, changes in zoning and increases in building permits are avoided.
Emerging Markets
HOW WE CHARACTERIZE EMERGING MARKETS
People moving in, rather than leaving the area
Jobs being created and moving in rather than lost
Rents and property values rising
Local government dedicated to attracting jobs
Markets starting to absorb oversupply
Through extensive research, we analyze many indicators to identify emerging markets in the US. We start out by performing thorough market research that includes the following areas:
Job Growth Report
Population Growth
Path of Progress Reports
Local Economic Reports & Trends
Chamber of Commerce Reports
And many more factors
Acquisition Criteria
The following criteria is used to identify undervalued multifamily properties for acquisition, value optimizations, management and disposition.
MARKET SEGMENTS
Age: The 18-35 year old market segment is 22% of the U.S. population.
Income: Renters who earn $40,000 or more annually.
Price: Where rent is 30% or less of the median income.
Retiring Baby Boomers are scaling down and enjoying maintenance free multifamily living.
PROPERTY CRITERIA
Multifamily residential apartments.
Pitched roof construction preferred.
Occupancy above 80% with the exception of properties that require renovation, providing properties are well located and present value-add opportunities.
We prefer to invest in properties where no more than 30% of the unit mix can be made up of one-bedroom apartments.
TARGET VALUES
Size and Price: 50+ units in the $4MM – $50MM range.
Returns: 7-10% Cash on Cash, Minimum Debt Service Coverage ratio of 1.25.
Type: C- to B+ properties located in C- to A areas.
Property Vintage: 1970 or newer.
Location: Emerging market areas with indicators for strong near and long-term economic growth.
Each asset is typically held 3-7 years depending on its exact business plan.
Value-Add Strategy
Think of it as a business rather than a building. The more income it generates, the more it is worth. When we purchase an apartment complex, we are looking for specific opportunities to increase the cashflow in different areas. These are called “Value Plays” or “Value Adding Components”.
VALUE PLAYS WE CAPITALIZE ON
Some examples of value-add plays we implement at Property Acquisition Cooperation, LLC
Improve curb appeal by improving landscaping, adding dog parks, carports, etc. Residents will pay more when a property is in better condition and has amenities.
Purchasing a property that is 10% or more under current market rents. This gives us the opportunity to increase rents and immediately increase the value of the property.
Implement a water and sewage bill-back system to charge the residents for actual usage. Most apartment owners pay for all the water. When we bill back the residents it helps offset expenses and increase the cash flow. Through this system residents tend to become more frugal and will decrease overall operating expenses.
Improve unit interiors with new paint, appliances, countertops, and floors
Adding a coin laundry facility to the complex
Below market rents
Path of Progress Strategy
A Path of Progress is where the greatest amount of building and development is currently happening, or soon to be.
Here is how the strategy works:
Properties rapidly shoot up in appreciation
Majority of new construction is going on
Families and individuals are moving into the area
Investing in the Path of Progress yields the greatest returns in a short period of time.
Our Investment Strategy is Based on the Following Key Considerations
Economic Cycles
Careful evaluation of macro and micro economic cycles to ensure that the investment will perform as conditions inevitably change.
Markets
We carefully evaluate supply and demand, demographics, historical performance and other market conditions to identify high growth, supply constrained markets.
Information
We utilize our relationships with local and National Brokers, Lenders and other market participants to gain superior information that is not available to the market at large.
Contact us now to learn about our investing opportunities
Leading the PAC in Multifamily Real Estate Investing
No Offer of Securities—Disclosure of Interests. Under no circumstances should any material at this site be used or considered as an offer to sell or a solicitation of any offer to buy an interest in any investment. Any such offer or solicitation will be made only by means of the Confidential Private Offering Memorandum relating to the particular investment. Access to information about the investments are limited to investors who either qualify as accredited investors within the meaning of the Securities Act of 1933, as amended, or those investors who generally are sophisticated in financial matters, such that they are capable of evaluating the merits and risks of prospective investments.
© Copyright 2023 Property Acquisition Cooperation
Leading the PAC in Multifamily Real Estate Investing
No Offer of Securities—Disclosure of Interests. Under no circumstances should any material at this site be used or considered as an offer to sell or a solicitation of any offer to buy an interest in any investment. Any such offer or solicitation will be made only by means of the Confidential Private Offering Memorandum relating to the particular investment. Access to information about the investments are limited to investors who either qualify as accredited investors within the meaning of the Securities Act of 1933, as amended, or those investors who generally are sophisticated in financial matters, such that they are capable of evaluating the merits and risks of prospective investments.
© Copyright 2023 Property Acquisition Cooperation