In the last 7 months, Vectored Equity has distributed to our investors over $46,823.52. Yes, all of this in the midst of inflation, rising gas prices, a sluggish stock market, and financial uncertainty. Why? Because the assets we purchase stand the test of strict underwriting, are located in areas of economic growth and are purchased with multiple value-add components. We believe that we shouldn't have to wait until retirement to use our hard-earned money, and you shouldn't either.
Our business model is simple. We exhaustively look for and underwrite apartment complexes that will only yield enough cash flow to make the purchase a mutually beneficial one for you and us. When we find one that pencils in, or fits that model, we make an offer for purchase. If it gets accepted, we raise investor money to purchase the apartments, then we split the profits. Over the last few years, we have met various investors, brokers, bankers, owners, property managers and so many other valuable contacts, that this process of underwriting and purchasing has become more efficient which provides us the ability to provide you more opportunities for investment. We hope this newsletter provides you more guidance on how Vectored Equity is doing and how we can help!
We purchase value-add apartments that demonstrate an ability for us to go in, use a pre-calculated budget to renovate individual units, changing the complete feel of the complex, and efficiently increase the Net Operating Income (NOI) of the apartments. When we do this, we increase the value of the asset, and when we increase the value we are able to give our investors more of those profits.
Our most recent purchase!
On June 17th, we closed on Amanda Court Apartments. We purchased this 25-unit apartment complex located in Columbia, SC for $2.5M, funded through the profits we earned on our very first purchase. We love this purchase as it was done as an off-market deal, with below average rents and competitive local financing. The best part? Because we've done business with our property manager now with two other apartment complexes, we are able to leverage economies of scale, and are paying less for property management fees, increasing our monthly cash flow!
Each of the 25 units sits below market rent by an average of $369. The original owner maintained this property since the mid 1980s and would rarely modify rents. In fact, not only did he not modify rents, he has not done many renovations to the interior or the exterior, despite the structure being very sound. This is music to an investor's ears, as it presents an opportunity for us to use our capital expenditure budget to renovate units as they become available, justifying an increased rent.
When we are complete with these units, the average rent price will be around $1,050 per month, increasing cash flow by $10,000 per month, or $120,000 per year. Here's an idea of how we are going to transform the kitchen.
Renovating the interior of the units is a welcoming feature for a new caliber of tenants, ultimately resulting in us positively affecting the local area, helping bring more to the economy, where everyone wins. We'll keep you posted on the progress!
We have had a growing number of friends, family, partners, industry experts and so many more, express an interest in learning more about how they can create passive income for themselves. We decided we'd share our journey with you. You can expect that we will do our best to provide value-added material that better demonstrates how we do business, and continues to present opportunities for investment.
Only investing in stocks and not sure that real estate is right for you? Take a look at this article from Forbes on how you can hedge against inflation and keep some money in your pocket. Article