INVESTMENT STRATEGY
Multifamily
STRATEGY
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
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
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 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.
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
- Mismanagement cause by owner self-managing
- Poor supervision of management companies
- Deferred maintenance
- High vacancies
- Below market rents
Some examples of value-add plays we implement at CMW Capital Investments, 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 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
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
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 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.
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
- Mismanagement cause by owner self-managing
- Poor supervision of management companies
- Deferred maintenance
- High vacancies
- Below market rents
Some examples of value-add plays we implement at CMW Capital Investments, 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
Land Development
Real Estate of all kinds in today's market are more competative, and more highly inflated, than nearly any time in recorded history. Supply is lower and demand is higher. We want to give the best ROI for our partners and clients. In a market with such demand, the solution is to create supply. Being able to tailor and facilitate building multifamily and other commercial properties at a much lower cost, will provide a much higher return. By constructing from scratch, and building at a much lower price point per square foot, stabalizing the investment, then either Selling or holding on for the massive cash flow, we're able to nearly double the return of any other investment vehicle.
The vast majority of multifamily properties on the market were built more than 20 years ago. These buildings are still selling for a premium. These buildings almost always have massive expenses needed up front. While a brand new building, that has been rent stabalized, will provide all the returns without any of the upfront repair and renovation cost of an existing building.
We've been doing this successfully with Single Family Homes. Building Multifamily mulitplies the opportunity, while minimizing costs.
Diversified Assets
New Construction
Owning a home is still the American Dream for most people. But, for most it is a much more distant dream than they realize. All time high prices make it extremely difficult to make that dream a reality. Factors that make this difficult include:
- Low Supply
- High Demand
- 4.3 Million americans in need of homes nationwide
- Investors Buying up every square foot they can
- E-Buyers Driving up prices
- All time low Interest rates
New construction is one of the best investments on the market right now. With high profit margins, and lower competition due to higher barrier of entry, This is the perfect investment vehicle, if you're looking to get the highest returns.
Due to the higher barrier of entry, we provide the opportunity to investors to be a part of our fund. This makes the barrier to entry on this extremely lucrative investment at just the right level.
New Construction
Owning a home is still the American Dream for most people. But, for most it is a much more distant dream than they realize. All time high prices make it extremely difficult to make that dream a reality. Factors that make this difficult include:
- Low Supply
- High Demand
- 4.3 Million americans in need of homes nationwide
- Investors Buying up every square foot they can
- E-Buyers Driving up prices
- All time low Interest rates
Recent Example: 9125 W Troy Dr.
- Lot Cost: $10,500
- Cost to Build: $175,000
- Total Cost: $185,500
- Sale Price: $280,000
- Total Profit: $94,500
- Timeframe: 4 months
New construction is one of the best investments on the market right now. With high profit margins, and lower competition due to higher barrier of entry, This is the perfect investment vehicle, if you're looking to get the highest returns.
Due to the higher barrier of entry, we provide the opportunity to investors to be a part of our fund. This makes the barrier to entry on this extremely lucrative investment at just the right level.
Long Term Rental (BRRRR)
Classic Rental & BRRRR Method.
Every investor who has been in the real estate space for any length of time will know about the BRRRR Strategy. BRRRR stands for:
- Buy
- Rehab
- Rent
- Refinance
- Repeat
This is a time honored, tried and true meathod of wealth creation that keeps your money working for you, instead of locked up in a single property. We use the BRRRR method to keep investors cashflow coming while some of more lucrative investments begin to mature.
The BRRRR strategy is a key part of the CTR Capital Partners wealth creation plan, and investment portfolio. Because of the strong base, and good cashflow, this strategy has been added to the diversified portfolio, accessible to all investors.
Long Term Rental (BRRRR)
Classic Rental & BRRRR Method.
Every investor who has been in the real estate space for any length of time will know about the BRRRR Strategy. BRRRR stands for:
- Buy
- Rehab
- Rent
- Refinance
- Repeat
This is a time honored, tried and true meathod of wealth creation that keeps your money working for you, instead of locked up in a single property. We use the BRRRR method to keep investors cashflow coming while some of more lucrative investments begin to mature.
The BRRRR strategy is a key part of the CTR Capital Partners wealth creation plan, and investment portfolio. Because of the strong base, and good cashflow, this strategy has been added to the diversified portfolio, accessible to all investors.
Short Term Rental
Short Term Rentals, like Airbnb and VRBO provide unique cashflow opportunities that other investment vehicles can't reproduce.
- Unmatched Cashflow
- Same Appreciation
- Same Tax Benefits
- Same Refinance possibility
Short Term Rentals are an extremely powerful investment. However, because they're location dependent, less rescession resistant, and more transative, we've decided to keep it as a small but powerful part of the diversified portfolio
Short Term Rental
Short Term Rentals, like Airbnb and VRBO provide unique cashflow opportunities that other investment vehicles can't reproduce.
- Unmatched Cashflow
- Same Appreciation
- Same Tax Benefits
- Same Refinance possibility
Short Term Rentals are an extremely powerful investment. However, because they're location dependent, less rescession resistant, and more transative, we've decided to keep it as a small but powerful part of the diversified portfolio
Fix n Flip
Basic Flips
- Why are these things so amazing
Sometimes, it makes more sense to renovate a home and sell it as soon as possible. It might not cashflow enough to be a long term rental. Or maybe it's not in the right location for a short term rental.
In this situation, we might choose to do a Fix n Flip.
Fix n Flip
Basic Flips
Flips provide:
- Quick turn around
- Lower barrier to entry
- Lower Up front Cost
- Large one time profit
Some negatives to flips
- No Cashflow
- Lower barrier to entry
- Lower Up front Cost
Sometimes, it makes more sense to renovate a home and sell it as soon as possible. It might not cashflow enough to be a long term rental. Or maybe it's not in the right location for a short term rental.
In this situation, we might choose to do a Fix n Flip.
Wholesale
Residential New Construction
- Why are these things so amazing
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
Wholesale
Wholesale
If all else fails, and nothing else matches the right numbers to provide the best return and experience for our investors, We have the ability to Wholesale the property
.- Long Term Rental
- Short Term Rental
- Flip
Wholesaling a property gives us the ability to profit from every opportunity presented to us. If a Property doesn't match our numbers, we can send it over to one of our other contacts allowing them to profit while we also profit. Which creates a win / win for everyone involved.
Creative Acquisition
Creative Acquisition
In the case that we find someone in need to sell their house, but are sticking to a certain price, we have the ability to help them through creative acquisition.
.Rather than letting a deal get away, we can creatively come up with a solution that is advantageous for every party. By listening to the needs of those who we are working with, we can find a solution to every problem.
Creative Acquisition
Creative Acquisition
In the case that we find someone in need to sell their house, but are sticking to a certain price, we have the ability to help them through creative acquisition.
.Rather than letting a deal get away, we can creatively come up with a solution that is advantageous for every party. By listening to the needs of those who we are working with, we can find a solution to every problem.
See for yourself why Investors love working with us!
See for yourself why Investors love working with us!
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