our multi family apartment investment strategy
Discover the benefits of investing with professionals
At Van Dyke Capital, our main goal is to protect the capital of our investment partners. To achieve this, we have specialized in multifamily apartment properties, making them the central focus of our investment strategy. Specifically, we concentrate on enhancing Class B & C Apartment communities situated in secondary and tertiary markets nationwide.
Throughout history, multifamily assets have exhibited the lowest volatility among real estate classes during economic downturns, providing stability and resilience. Simultaneously, they offer compelling potential for substantial returns during economic upswings. We find Class B & C properties within the multifamily sector particularly attractive as investment opportunities, given the strong demand exceeding the limited supply of new developments in this segment.
By concentrating on Class B & C multifamily properties in strategic markets, we aim to capitalize on the consistent demand for affordable housing while mitigating risks associated with economic fluctuations. This investment approach aligns perfectly with our mission to safeguard and maximize the capital of our esteemed investment partners.
OUr Acquisition Criteria
MARKET SEGMENTS
- Age: The 18-35 year old market segment is 22% of the U.S. population
- Income: Renters who earn $40,000 + annually
- Price: 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 & Price: 40+ units in $2MM – $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: 1975 or newer
- Location: Emerging market areas with indicators for strong near and long-term economic growth
“Ninety percent of all millionaires become so through owning real estate... The wise young man or wage earner of today invests his money in real estate.” - Andrew Carnegie, industrialist
emerging Markets
CHARACTERISTICS of EMERGING MARKETS
At Van Dyke Capital the process of choosing the perfect multi-family apartment complex for acquisition is a crucial aspect of our investment strategy. We undertake this task with careful attention, placing a strong emphasis on identifying opportunities in emerging markets that boast growing job prospects resilient local economies.
MARKETS CHARACTERIZED BY
- People moving in, rather than leaving the area
- Jobs being created & moving in rather than lost
- Rents and property values rising
- Local government dedicated to attracting jobs
- Markets starting to absorb oversupply
market indicators
Identifying an emerging market in the US involves extensive research and consideration of various indicators. We begin by conducting thorough market research that encompasses the following key areas:
- Job Growth Report
- Population Growth
- Path of Progress Reports
- Local Economic Reports & Trends
- Chamber of Commerce Reports
Acquisition Practices
Our approach
At Van Dyke Capital, we take a proactive approach to securing promising investment opportunities. Our focus is on building strong relationships with local listing brokers, granting us access to exclusive "pocket listings" and Bank Owned Properties (REO). We actively seek out potential properties and directly reach out to owners, ensuring that we don't solely rely on properties coming to the market.
Our investment process involves meticulous due diligence, where each asset undergoes a comprehensive evaluation. This evaluation confirms the property's physical and legal status and validates its valuation, ensuring that our investment strategies are based on informed decisions.
Early on in the assessment phase, we formulate a well-defined debt and equity financing strategy tailored to factors like property type, renovation requirements, expected holding period, and investor objectives. Typically, our goal is to hold each asset for 3 to 5 years, aligned with its unique business plan.
Our investment discipline revolves around a systematic and routine evaluation process. We carefully assess demand characteristics in potential markets, including job and population growth, demographic shifts, supply absorption rates, and local legislation. Markets with supply constraints receive favorable consideration, offering potential for long-term stability and growth. Conversely, we avoid markets showing signs of oversupply to mitigate risks associated with excess inventory.
By adhering to this investment discipline, we aim to identify and capitalize on lucrative opportunities while prudently managing risk for the benefit of our valued investors.
The best investment on Earth is Earth.
Louis Glickman
Value-Add Strategy
a business perspective
View the property as a flourishing business, not just a simple building. Its worth is intricately linked to the revenue it generates. When we purchase an apartment complex, our primary emphasis is on identifying strategic opportunities to boost cash flow through various aspects of the property. These opportunities are commonly known as "Value Plays" or "Value-Added Strategies."
VALUE PLAYS WE CAPITALIZE ON
- Mismanagement cause by owner self-managing
- Poor supervision of management companies
- Deferred maintenance
- High vacancies
- Below market rents
examples of value-add plays
- 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 (RUBS), 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, counter-tops, and floors
- Adding a coin laundry facility to the complex
- Below market rents
Path of Progress Strategy
PATH OF PROGRESS
A path of progress in real estate refers to the advancement and development of an area, resulting in increased economic growth, infrastructure improvement, and rising property values. As cities expand and evolve, new amenities, commercial centers, and transportation options emerge, making the region more desirable for residents and investors alike.
This progression often attracts businesses, leading to job opportunities and further boosting the local real estate market. As the area flourishes, property values tend to appreciate, offering potential for lucrative investments and a higher quality of life for those living in the community.
Our Philosophy
- Properties rapidly shoot up in appreciation
- Majority of new construction is going on
- Families & individuals are moving into the area
The Greatest Yields
Investing in the Path of Progress offers the highest returns within a short timeframe.
DISCOVER THE BENEFITS OF INVESTING WITH van dyke capital
DISCOVER THE BENEFITS OF INVESTING WITH van dyke capital
DISCOVER THE BENEFITS OF INVESTING WITH van dyke capital
DISCOVER THE BENEFITS OF INVESTING WITH van dyke capital
DISCOVER THE BENEFITS OF INVESTING WITH van dyke capital
DISCOVER THE BENEFITS OF INVESTING WITH van dyke capital
Your MULTI FAMILY investment is key to early retirement
No Offer of Securities—Disclosure of Interests Under no circumstances should any material at this site be used or considered as an offer to sell or a solicitation of any offer to buy an interest in any investment. Any such offer or solicitation will be made only by means of the Confidential Private Offering Memorandum relating to the particular investment. Access to information about the investments are limited to investors who either qualify as accredited investors within the meaning of the Securities Act of 1933, as amended, or those investors who generally are sophisticated in financial matters, such that they are capable of evaluating the merits and risks of prospective investments. Check with your tax and legal professional, as Van Dyke Capital does not provide tax or legal advice and the above is not intended to or should be construed as such advice. Your specific circumstances may, and likely will, vary. The investment strategies noted indicate general overall approach of the business. Strategies are subject to change. Refer to deal specific qualifications for associated strategy.
Copyright © 2023 Van Dyke Capital - All Rights Reserved.
Powered by Passive Cash Flow Real Estate Investing
Enhancing Investor experience
Our website collects cookies to deliver a superior real estate investor experience.”