In the face of the unprecedented challenges brought about by the post-COVID real estate market, our journey has been nothing short of both challenging and rewarding. The landscape has witnessed astronomical increases in real estate prices, coupled with rising interest rates and unadjusted seller expectations. However, we’re delighted to share that not only have we successfully weathered these challenges without taking additional risks or suffering financial losses, but we’ve also strategically positioned ourselves for future growth.
Strategic Portfolio Move: Selling 50%
As part of our strategic initiatives in 2023, we made a significant decision to sell 50% of our existing portfolio. This move not only allowed us to adeptly navigate the market dynamics but also facilitated the return of all investor funds. The results speak volumes, with average returns of 34% IRR and 18% ROC over the last 5 years, showcasing the success of this strategic maneuver. Beyond the financial gains, this portfolio sale has had a positive ripple effect on our overall financial health. It substantially reduced debt levels to 25%, laying the groundwork for sustained success in the future. This strategic move not only fortifies our financial position but also positions our investors favorably to enjoy returns and appreciation on the remaining 50% of the portfolio for the foreseeable future.
New Additions in 2023
In the last quarter of 2023, leveraging our deep relationships with realtors and brokers, we added an 18-bed student housing building to our portfolio at a price slightly above that of 2019. This building, initially 100% vacant and plagued with management issues, underwent a transformation. We initiated changes by replacing the existing management, making cosmetic improvements, and commenced renting. Despite a slow start, we managed to secure renters for 20% of the building at higher-than-expected rental rates. Given its strategic location, we anticipate full occupancy by the end of the first quarter in 2024.
Additionally, we seized the opportunity to acquire a portfolio of three single-family homes at an enticing price. We expect a remarkable 100% return on investment within the next five years.
We extend our heartfelt appreciation for the ongoing support and trust in our investment strategies. This strategic shift marks a milestone in our journey, and we are excited about the future. Should you have any questions or seek further clarification, please don’t hesitate to reach out. Wishing you a Happy New Year filled with prosperity and success!
Best Regards, Sam