Retirement

[Thomas Wright]

Apartments should be in your retirement portfolio. Get 8 to 12 percent return.

[David Thompson]

Agree Thomas w/you if we assume large apartments (100+ units) where we get scale. Additionally, something often overlooked in these scenarios is "forced appreciation" that is unlike anything you can get in SFRs or small MF like duplexes and fourplexes. We may add a carport to one of our 300+ unit apartments. We add cover for 200 spaces, add $30/mo parking to opt in and take it. Assume we fill them all, that's $6K/mo and $72K/yr in additional income just created. At a 6 percent cap rate, we've just created an additional $420K in value to the property. If I add a carport to a SFR, I don't think I'd be able to justify the expenditure because it would cost much more than I would likely recoup in rent increases.

Here's another great example, we are installing a low water use toilet in a 250+ unit apartment and expect to save 20% on utilities. Such is the beauty of the large apartment market. I see no reason w/smart value add purchases w/the right interior / exterior renovations, new / experienced management locked and loaded on maximizing revenue and cost reduction initiatives that one can't achieve 10% CoC and 20% IRR over 5 year hold periods. Our syndication team is comfortable with these types of numbers given the experiences we've had and opportunities we continue to uncover.

Reach out to me if you would like more specific examples of the projects we are working on and emerging opportunities we are looking at.