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Creating Value in Today's Value-Add Properties

Creating Value in Today's Value-Add Properties
It's the goal of many multifamily owners and investors: Buy an apartment community in need of upgrading, perform the needed renovations, boost rents accordingly and drive impressive returns. But just because apartment companies frequently undertake value-add projects, it doesn't mean success in these endeavors is easy. On the contrary, a value-add community that attracts residents and produces the targeted returns is the end product of an almost never-ending amount of diligent research and careful strategic planning.  Below are some of my general tips for success in the value-add arena. Dig into submarket data. This may seem obvious, but it's such a critical step that it merits placement here. A successful value-add project depends on a submarket that can support the rents and the investment returns you're seeking. Once you know what metro you're looking to invest in, thoroughly research the area's submarkets to pinpoint where your best investment opportunity may be. What are the submarkets where the population is increasing, employment opportunities are growing and rents are rising? Be prepared to go through all the data sources you need to make this vital, fundamental determination. Visit a property you're considering buying. Statistics, spreadsheets and databases are of course indispensable when evaluating a value-add opportunity. But don't ever underestimate the value of setting foot on a property and seeing it in person. As the great and wise Yogi Berra once said, "You can observe a lot by just watching."On a personal note, I was recently tempted – because of an extremely hectic s......
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Five Fundamental Investor Relations Best Practices

Our investment partners are the core of our business. They provide capital to purchase a real estate asset and trust Worcester Investments to manage the asset transparently, effectively and with integrity. In order to maintain positive and mutually profitable relationships, we must carefully manage these relationships and the properties in which our partners invest. Here are five tips that an asset manager or syndicator should keep in mind when developing a relationship with an investor. These tips should also be helpful to a passive investor who is seeking an asset manager or deal maker. 1. Be Selective On The Deals You Present In unison with our partner relationships, being very selective and buying only the best marketed and off-market deals in our specific area of expertise is the foundation of Worcester Investments’ success. To be a great buyer, you have to look at tons of deals and you have to know your market and the players within it very well. With that foundation, it goes without saying that you should only present strong deals to your investors. However, there are different types of strong deals and you should take the time to discover what types of deals your investors desire to purchase. The two types of deals we purchase are properties that have deferred maintenance, history of mismanagement or low occupancy, but are located in a strong submarket. These properties generally have the most upside, but the investor has to be comfortable with the pre-stabilization period where they will be receiving m......
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