Reflections on 2021 and Beyond

We are happy to report that we had an incredible 2021, and we would like to take a second to dissect why that was. Also, we want to consider what we see for 2022 and the impacts on our business moving forward.

Property Performance Review

1.      Norman Creek Apartments

At Norman Creek, we are beating overall projections by 46% and have returned 10.1% to our investors to date. The rental market has been favorable and has allowed us to push new rents and renewals. Additionally, our manager has done a great job with tenant retention, which has significantly impacted occupancy and delinquency. We did what was projected on expenses, we didn’t beat those projections mainly to heavy turns as we were getting some problem tenants out in the first year. We counteracted some increases in costs by cutting our property manager from full-time, to sharing her half time effectively with another nearby property. Additionally, we could consider sharing our maintenance technician with a nearby property as well. Lastly, we are now at point 18 months in that we refinance most of our funds or exchange into a newer property.

2.      Meridian Place Apartments

We are beating projections by 62% thus far into the project at Meridian. Much of that has to do with expenses being lower because the buildings are newer, and the previous owner had taken great care of them. Since all the tenants are month to month, we have been able to renew up to 10 tenants a month, pushing rents up much quicker than anticipated while keeping occupancy higher than expected. Amazon has four facilities not far from this building, leading to a steady stream of new tenants. The tenant demographic is a bit older, which means they are less likely to move. The average occupancy of a tenant here is four years, whereas the Oklahoma City average usually tends to be two years. 

Our weekly meetings and reporting have continued to be very effective on both properties as it helps us stay on top of the direction of the properties. Our regional manager informed us that we have the best performing buildings in the entire portfolio they manage due to our involvement.

Looking ahead to 2022

We ended 2021 by putting 118 units under contract in Norman, our largest purchase to date. We will close this in Q1 of 2022. It originally went on the market in August 2021, but it went to another party. We continued to follow up with the broker, got another shot at it in November, and put it under contract in December. The market has continued to go up during this time; therefore, we are getting a solid deal on it.

In 2021 we built many relationships and contacts. That will begin to benefit us more in 2022. We are now on the shortlist for many brokers. We will start to get more first looks at properties that could be good deals. We plan to get some traction and at least do one deal in a new city as well. Our goal is to purchase 350 units and $25,000,000+ in real estate in 2022. We plan to continue to underwrite these deals conservatively to beat projections and get our investors the best risk-adjusted return.