We are a real estate investment firm looking to fund hotel to apartment conversions in specific growth areas throughout the country. What started as a small equity partnership focused on single-family investment homes has grown into a multi-million dollar, multifamily focused investment firm with 70 million dollars worth of assets under management currently. Our mission is based on building great communities through tenant relations, strong onsite management, amenities, renovations. By placing that focus on community and tenants, the returns will follow. We are creating strategic economic opportunities for our investors, bringing diversity to their portfolios, while providing a high quality of life for our tenants.
The pandemic hit in 2020, and restrictions imposed on the hospitality industry have been devastating, to say the least, alongside Airbnb's continued growth in the market. There are literally hundreds to thousands of hotels with distressed loans on the market today going to auction, creating a massive buying opportunity in the right areas. Our goal with this fund is to revitalize this asset class, taking advantage of key market factors like looming inflation, low-interest rates, and areas of positive population migration, which has been growing steadily during this past year to certain demographical areas. We have the knowledge and track record to analyze these deals making this a very unique investment opportunity.
We have multiple deals in progress at this very moment. Our most recent acquisition was in Lafayette, LA. It was a $15 million dollar 244 unit hotel that we purchased for 2.4 million dollars. We are putting 7 million in construction costs in to convert that to 210 units of studio, one and two bedroom apartments. Our evaluation when we are done based on the cap rates and other properties being sold on the market in the area, will be worth an estimated 14 to 18 million dollars. Take a look at our hotel to apartment training workshop to see more details on the renovation and our process. https://learn.serviocapital.com/learn-now
Here is news article on property we spoke about above.
We are acquiring distressed properties that are 60 units and above, and are no older than 1980. We must be able to acquire and convert at 75-80% of the apartment market value per door in that specific area with a going cap rate of greater than 10%. We look for areas of positive economic development in the areas that we spoke of earlier where we are seeing positive population migration.
This fund will allow us to go straight to these auctions and foreclosure sales and buy these properties outright. As we spoke about earlier, we have a multiple deals underway, with another $5 million hotel under contract from short sale for $1.5 million, and we already have a master lease in place for a minimum of $67,000 a month and can refinance a few months after the acquisition to return 100% of capital.
Here are the fund structure and details:
- This fund will be structured with an 80/20 split with 80% going to the investors and 20% to the general partners with an 8% preferred return on LP principle.
- The preferred return of 8% is compounded and not accrued.
- Our goal is to return 100% of the LP principle within the first 2 years of the deal done from refinancing and stabilizing assets. The other option is to sell the stabilized asset where the
investor principle will be returned along with profit.
- Investors will have the option to co-invest in addition with each particular deal if they choose.
- This fund will have a term of 7 years.
- We will not pursue any opportunity unless we can achieve over 17% IRR but the current deals on the table are over 25%.
To make a soft reservation go to serviocapital.com, once the fund goes live you can then make a solid commitment.
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