Q3 Portfolio Update

Worth considerably more than my costs due to substantial renovation and further appreciation of the market.

Currently a rental but might become my home (again) one day, so it will be more difficult to access the built-up equity.

Performs OK as a rental. Considering its original intent was to not be a rental, I’d say it has worked out well so far. 

Investors have been receiving distributions the entire hold period, and at 10% CoC for the last year or so. 

Occupancy stays in the 98%+ range and rents are significantly higher than projections. 

We’re hitting year 10 NOI projections, and we’re only 2.5 years into the hold period. 

We are very pleased with this deal so far. 

The only deal that is materially underperforming across my entire portfolio.

Distributions were not projected for the first 2 years due to repositioning of the property.

We are ~2.5 years into the hold period and it will be a while before we see distributions.

The reposition has taken much longer than anticipated.

Regulations in the market have made it more difficult than anticipated.

Acquired with bridge debt and a 3-year interest rate cap.

Distributing ~6.2% vs. 5.5% projected during this time.

Despite the soft Dallas rental market, our rents are still meeting initial projections. 

NOI is in line with budget

Acquired: 2024 

Exited: 2025 (1.6x Equity Multiple in 15 months)

The GP purchased a parcel which they then entitled and sold to a publicly traded builder once the lots were shovel-ready. 

Exited the deal 15 months later for a 1.6x on LP capital.

Three main reasons I was comfortable with this deal:

I haven’t calculated the IRR on this deal yet, but it's quite a large number. 

Entered into a compliant tax abatement that was not affected by the recent house bill.

Property has performed at 95%+ occupancy with extremely low delinquency.

Cash-out refinance after ~14 months of ownership that returned over 40% of initial investor capital.

It was purchased for $34 million and appraised for $54 million at the time of refinance.

This property should perform well above projections once sold.

Makes loans to commercial real estate borrowers in preferred equity or mezzanine positions.

~10 – 14% annualized yield with quarterly distributions or option to reinvest. I believe the yield will increase as the fund continues to mature.

Our last-dollar position sits below 75% LTV providing us a nice equity cushion for the amount of yield generated. Both of my business partners and I are expanding our personal positions in this fund.

The deal just closed in early July.

Takeover of the deal was bumpy with an occupancy dip and having to re-lease the property using aggressive concessions.

Despite initial struggles, we are back up to 95% occupancy.

Currently underperforming projected quarterly NOI. With this being our first quarter of ownership, I fully expect that we will be in line with 2026 expectations as the business plan evolves.

Downside is protected on this deal and we have low-leverage fixed rate debt, which is why I liked it to begin with. 

I handle land acquisition for a firm in Charlotte, NC and we buy infill lots and parcels and build homes on them.

We have built ~20 homes this year and have exited them successfully for the most part. There is higher DOM and some softness in the market that we have to contend with.

We only work with 3 investors in this strategy currently. We are able to generate a great risk-adjusted return for them. Our constraint in this vertical is quality deals, not capital.

If you’re interested in North Carolina single-family development or existing multifamily opportunities, you can follow along by clicking here. I usually only come across 1–3 deals per year that are truly worth investing in.