We are Actively Buying MFU Apartments; Cash Flow Opportunities are Still Strong

Apartment Prices are up, but so are Rents; Cash flowing properties still available. As mentioned, we are actively buying MFU Apartment properties, and are looking at various attractive markets around the country. While it is certainly true that MFU Apartment prices have gone up solidly on a per-door basis, it is also true that Rents are increasing at a similar clip. We have had recent success finding attractive, high cash-flowing B- and C-class apartments in secondary and tertiary cities like St Louis, Columbus, Cincinnati, Greensboro, Jacksonville, Atlanta, Fort Worth and more. We are interested in owning some of these assets, and indeed we have bid on three MFU properties in the past week alone. We are finding opportunities to bring amenities to these communities, to renovate unit interiors and property exteriors, while driving increasing returns for Investors. In some instances, Landlords just have not been aggressive about keeping pace with market rental rate increases. In other cases, the Landlords just do not want to spend the time, effort, and money it takes to fully update a property. Our team at Avid Realty Partners is willing to do the hard work to optimize these properties from both an improvement and operations perspective.

Market in Focus: St Louis, MO

We are buying more property in St Louis, MO. We like this St. Louis, a Show-Me town. In addition to being Craig’s original home town, and where his Family resides, the cash ?ow yields here are very attractive. We already own a 95-unit apartment building here that produced greater than 10% cash-on-cash returns in year one, and we have recently put in a bid on a 203-unit property that should deliver even stronger returns and with more scale than our ?rst property here. The property we are bidding on will be priced at roughly $25K per door or better, with $500 monthly rents, and we just cannot ?nd this level of value elsewhere. Let’s look at a couple interesting trends happening in St. Louis, MO:

Rental Rates are growing and Vacancy Rates are falling. Here we see that St Louis has experienced robust Rental Rate growth in the past ?ve years, and that apartment Vacancy Rates are at reasonable levels, and falling. This is encouraging relative to the somewhat modest growth in MFU per-door pricing we have seen in the market. This data is sourced from Berkadia.

Supply growth is low and full absorption is being achieved. Here we see that St. Louis is experiencing only modest MFU Apartment Supply growth, and has seen nearly full Absorption levels in the past three years. This suggests that supply/demand should stay relatively balanced in coming years, all else being equal. This is a plus for the St. Louis market as compared to other markets where signi?cant supply is coming on. This data is sourced from Berkadia.

MFU Apartment Sale Prices (per-door) have only increased modestly. Here we see that St Louis MFU Apartment sales prices, on a per-door basis, have only increased modestly in recent years. While this data may be not too strong, we would guess that Rental Rate increases are at least keeping pace with growth in MFU Sales Prices on a per-door basis, with limited supply growth and strong cash ?ows already in place, a positive scenario in our view. This data is sourced from Loopnet.

Ramping Crowdfunding Effort via Meetup.com Platform. Recently, Avid Realty Partners began to build out it’s Crowdfunding Platform. While this effort is in its early and formative days, we intend to Crowdsource deals, analysis, and capital to pursue the most attractive MFU Apartment and Hotel opportunities in the market. Join our Commercial Realty Investment Club if you would like to participate in analyzing and investing in sizable commercial realty projects. If you have a deal you would like to pursue as the Project Sponsor, reach out to us with deal speci?cs here.

We seek Accredited Investors and Off-Market Properties. If you are an accredited investor interested in reviewing some of our current deals, just let us know. Also, we seek attractive off-market opportunities, particularly class B and C value-add MFU Apartments in the 100-250 range unit size. If you have any such opportunities please contact us here.

Thank you for your time and have a great rest of the week