This is a 56-unit Class C property that is 90% occupied. It's located in a highly dense, blue collar part of Houston, TX.
Occupancy: Properties in this part of Houston generally observe 95%+ occupancy. Houston is experiencing solid population growth and Class C is generally recession proof. In a good economy, Class C occupancy is strong and maintains steady rates during economic troughs as people downgrade from Class B to Class C. Current owner is very unsophisticated in managing the operations, rehabbing units and optimizing revenue.
Business Plan: What makes this a great acquisition is that rents can be increased by executing a rehab plan similar to what we have done on our other properties. Given that TPCG understands this market well, the executional risk is greatly reduced. TPCG already owns multiple properties in this market and the same manager will manage this property as well. This will allow the salary, wages and office expense to be spread across those properties making our operational expense lower than what a solo owner would run it for. Expenses are not properly controlled. Three Pillars completed rehab on a similar properties near by and achieved above market rents setting a new trend for competing properties to follow. This property fits squarely in their area of expertise.
The business plan is to reposition the property to a Class C+ by performing extensive interior and exterior rehab, putting in a better tenant profile and increasing rents. TPCG has it's own construction crew that will perform all rehab. They also have their own maintenance team to perform repairs and maintenance. This alone will result in a lot of savings on the repairs and maintenance line item. Furthermore, the water bill can be lowered, as they did on their previous acquisition.
09/19/2018- TPCG prepares to go under contract on the purchase of Sycamore Gardens Apartments
10/03/2018- TPCG is now under contract to purchase this property. Next up is physical and financial inspection of the property
10/12/2018- TPCG has completed the due diligence on the property. It's in great condition and will fit well into our portfolio.
10/29/2018- Inspection, due diligence, lender docs, etc. all complete! Closing in 30 days.
Players Involved in Deal
Mortgage Lender: CBRE
Lender: Freddie Mac (Permanent)
Terms: 3 years interest only, 30 year amortization
Construction Manager: Fernando Zamarripa, Three Pillars Capital Group
Property Management: Greenline Apartment Management
Introduction to Sycamore Gardens Apartments
Josh Welch, Founder
Lucas Fertitta, Director of Acquisitions
Sycamore Gardens Apartments Due Diligence
Three Pillars team conducts inspection, due diligence and unit walk through
Key Principal Selection Discussion
A glimpse into a previous rehab project
We will allow select individuals to be given the opportunity to be selected as Key Principals (KPs) on this deal. As those selections are made, they will be added here. This is the fastest way for the KPs to get a deal done, build their track record and credibility (read more on Become a Principal page).
We want to make sure that those individuals who are ready to do a deal done get a fair chance. The number of applications has been high, so the selection process takes time.
Income Properties Portfolio
NOTE: THIS PAGE IS ONLY INTENDED FOR KEY PRINCIPALS AND DOES NOT CONSTITUTE AN OFFER
Important Videos About The Deal