Inner SPARK August 2023
Spark Multifamily Investment Group
I help you achieve financial freedom and create the life of your dreams through passive real estate investments.
Hi Everyone,
As August comes to a close and Labor Day approaches, children are or soon to be back in school. The day to day rhythm of life over the summer comes to an end and we all return to our “normal” schedule as Fall starts. Most are motivated to push professionally until the holidays start in late November.
And then before we know it, it’s 2024 and we start all over again.
The end of August was always a special time for the Cenedella family. Our family would travel to Carmel to enjoy the ocean, sand and surf - enjoying being in one of the most beautiful places on Earth - Grandma would cook lots of good food for the family to enjoy. We’d fly kites and body surf the waves until the generally ice cold water forced us to retreat to the beach. I’d play a little golf too. ?? And it was also a time to celebrate my birthday on August 30 every year.
As I complete my 69th trip around the Sun, I feel fortunate and blessed to have lived the life I have. While there were rainy days and difficult times in my life, on balance - it’s been wonderful and I look forward to the coming years - wondering what the future will bring.
Real estate has been at the core of my adult professional life since I was 23 or 24 years old. Real estate has provided solid income and financial security but even more importantly, it has provided me the time freedom to pursue my passions outside career.
Spark Investment Group was formed to provide busy professionals and families the benefits of real estate investing without the hassles or time demands owning and operating rental real estate requires.
We are thankful for your partnership.
Happy August and a great Labor Day weekend,
THE LATEST NEWS FROM SPARK
Easley Lyman New Build duplexes aka Greenville New Build Portfolio 1
Easley update
We are excited to announce Spark PPOG has closed on the first three of NEW BUILD duplexes in Easley. The 4th Easley duplex is under construction and we hope to have that one completed by October. Two of our six units have been leased and we expect to have full occupancy within 4 to 6 weeks.
Lyman update
Excellent progress continues to be made on the Lyman 6 duplex build. Here are some updated (as of August 9, 2023) pictures for your review.
Be on the lookout for the Greenville New Build Portfolio 1 Deal Alert.
This deal is a two property portfolio consisting of 4 duplexes in Easley and 6 duplexes in Lyman.
We will be offering our investors a 7% preferred return and a 75%/25% LP/GP split on the Greenville New Build 1 portfolio.
This is a 506b opportunity open to both accredited and sophisticated investors.
Investor webinar will be Wednesday Sept 6 at 8PM ET 5PM PT.
Save the date!
Learn more about this acquisition and meet the entire GP team.
Hampton Croft
We are pleased to confirm we have closed on the 7 unit two property Hampton Croft acquisition in PRIME downtown Greenville locations. Progressive Properties of Greenville is in the process of taking control of both properties. Once this is accomplished, we will develop the business plan more specifically and commence with selected renovations and other improvements.
We are very excited to be able to bring this fabulous asset to our investor partners. Our plan is to capitalize on these prime locations via selected upgrades and renovations so that we can increase rental income and therefore value for our investors.
UPDATE on current GREENVILLE ASSETS
Townes @ Summit
We recently had five residents move out. The good news is we have turned and/or renovated all five units. All are now pre-leased so we return to 100% occupancy in August.
The PPOG team, our PM and partner, did a great job getting these homes ready for new residents and leased in less than a month!
Cottages @ Staunton Bridge
We continue to renovate units and increase rents. Renovations are being completed on budget and in a timely manner reducing renovation expense, vacancy and loss of rent.
By way of example, we just received approval from Greenville County HUD for a $175 a month increase on one of our units that has been occupied by this resident since 2016. We are pleased to keep her in HER HOME while increasing rental income to market. That’s a win win!
E North
This 12 unit joint venture continues to exceed all expectations.
This Month’s Newsletter
Once again, we’re delighted to offer educational content about multifamily investing to you through Inner Spark. Much of this content deals with the shifting multifamily market. After several boom years, we are entering a new phase of the economic cycle.
In this edition, you’ll find:
领英推荐
High net worth investors (HNWIs) prefer multifamily and industrial real estate, as per a survey by WMRE and WealthManagement.com. Commercial real estate experts are more convinced, with 70% believing HNWIs favor multifamily and 64% favor industrial.
Multifamily's popularity is attributed to the U.S. housing shortage. HNWIs also show interest in niche assets like single-family rentals, student housing, and healthcare.
Greenville's housing market is marked by high demand and rising prices, discouraging wait-and-see strategies. June saw a 3.5% YoY increase, with the average sale price at $384,436 and median house price at $320,000. Despite being slightly below the national average, affordability has declined, indicated by a drop in the housing affordability index from 105 to 88 in 2023.
The market trend remains seller-oriented, despite achieving a more balanced state. Experts predict interest rate stabilization in 2024, possibly boosting demand within Greenville County.
Higher home prices and interest rates increase demand for more affordable housing options like apartment rentals.
Despite concerns, the Sun Belt and Mountains regions in the U.S. are leading in year-to-date apartment demand, as per RealPage Market Analytics data. The supply-demand gap exists, but it's not as severe as projected. While demand won't match supply growth by 2024, it's improving and expected to remain
The next 18 months might be challenging due to supply levels and financing costs, especially in the Sun Belt. However, looking ahead, following the demand suggests a more positive longer-term outlook.
After a 0.6% decline in May 2023, U.S. multifamily rent growth, the first since 2008, is set for an upward trend. Markerr projects a 3.9% increase in the top 100 markets by 2024, followed by 5% growth the next year, stabilizing at 3% to 1.5% in subsequent years. Average monthly rent could rise from $2,103 to $2,453 by year 5.
Markerr predicts Sunbelt and Tertiary markets to surpass the top 100 average, led by Winston-Salem at 5.9% CAGR.
As Greenville County's Golden Strip—comprising Mauldin, Simpsonville, and Fountain Inn—experiences growth, a range of exciting mixed-use developments are taking shape, enriching the region's urban landscape.
The Golden Strip, encompassing Mauldin, Simpsonville, and Fountain Inn in Greenville County, is undergoing a dynamic transformation with several captivating mixed-use developments in progress.
As these projects take shape, the Golden Strip's urban evolution offers a diverse and vibrant community experience.
While Greenville is the primary economic and cultural driver in the Upstate, the entire 9 County Upstate Region is booming. Spark looks for investment opportunities across the entire region.
The Sun Belt region is seeing a boom in the build-to-rent (BTR) sector due to a severe housing shortage, high interest rates, and the "Great American Move". Investors are focusing on developing BTR properties in this region, particularly in Texas, Tennessee, Florida, and North Carolina.
These properties offer renters safety, security, affordability, and quality of life, with features like private yards, attached garages, and smart homes technologies. Despite the impact of high interest rates, the resilience of Sun Belt's economy and ongoing interest in BTR projects make investors optimistic about the future.
Spark has several BTR new construction opportunities in the pipeline. Look for deal alerts in the next week or so.
In a recent episode of the Accelerated Real Estate Investor podcast, Neal Bawa discusses the current state of the multifamily real estate market. Despite the dramatic shifts in the market due to spiraling interest rates, Bawa remains extremely bullish about multifamily investing. He believes that the current market conditions offer the best opportunity to buy properties since 2009.
Bawa emphasizes the importance of investor education at this time, warning syndicators about the risk of overpaying for properties. He also predicts that many syndicators may be out of business by 2024, and advises listeners on how to avoid falling into that category.
He attributes his success in the world of multifamily investing to the use of cutting-edge analytics and tech tools, which provide him and his students with a powerful edge. Bawa's portfolio is impressive, valued at $1B and supported by over 900 investors.
Spark also is bullish on long term multifamily investments.
Tune in and hear Neal’s thoughts.
Apartment landlords are feeling confident about 2024, despite the current highly competitive market and higher-than-expected costs in land, labor, and construction materials. The strength of the economy has supported household formation.
This upbeat outlook extends to both value-add and new construction in the multifamily sector, as developers expect the strength to continue into the next year.