At takeover, this 200-unit bond-financed property in the Raleigh-LaGrange market of Memphis suffered from weak operations and poor market presence. Payables rose to $100,000 and the property experienced further decline as contractors went unpaid. The poor property condition led to increases in delinquency, peaking at 9% just before takeover.
We installed a local management company and crafted a two-year capital program that included updates to the clubhouse, improved amenities, and a complete re-skinning of the façade. A thorough rent roll demographic analysis revealed two desirable rental groups that would benefit from the amenity improvements to on-site third places such as playgrounds and tanning beds. By prioritizing these changes, the share of these two groups increased from 15 to 30% of the property, providing some much needed operational stability. Delinquency fell from 9% to 0.5% in the first six months, with many months recording delinquency of $100 or less. Occupancy rose from 88% to 97% despite multiple rent increases.
Seven years later, the local management company remains in place and the property continues to lead their portfolio in collections. The affordable housing bonds used to finance the community remain strong performers for the bond holders.