In an effort to increase investment in five to 10 Arizona multifamily commercial properties, Neighborhood Ventures has launched its Arizona Multifamily Opportunistic Fund.
The new fund is open to accredited investors nationwide for a minimum of $50,000 while non-accredited investors residing in Arizona can invest as little as $5,000. The plan expects a 16% to 20% internal rate of return, and the fund has a target term of four years.
Neighborhood Ventures, a real estate crowdfunding company founded in 2017, estimates that the properties being considered are selling at a distressed rate of 30% below intrinsic value.
“This is a golden opportunity to invest in multifamily apartment buildings at a discount,” says Jamison Manwaring, Neighborhood Ventures’ co-founder and chief executive officer. “But there’s a need to act fast, which is why we launched this fund. Now is the right time for us to pick up these properties, under market value, as the next wave of commercial real estate debt is coming due.”
Co-founded by Manwaring, a former Goldman Sachs technology analyst, and John Kobierowski, president and CEO of ABI Multifamily, Neighborhood Ventures first launched a crowd-funded real estate investment trust to purchase a number of income-generating properties, eventually selling them and paying investors an average 12% preferred annual return on their investments.
With this new special fund, Neighborhood Ventures hopes to purchase properties from owners who can’t refinance their debt, as well as from banks looking to unload properties they need to foreclose on. The team of professionals at Neighborhood Ventures targets multifamily properties in residential locations that are prime for investment and redevelopment. They identify midsized properties priced below market value and then apply property management and skilled remodelers to increase the property value.
“After several years of rising interest rates, property owners suddenly find it challenging to keep their property finances afloat,” said Kobierowski, Neighborhood Ventures co-founder and head of real estate. “Our strength comes from identifying properties that show real market promise and negotiating with these property owners to purchase their units at a discount. With our new fund, Neighborhood Ventures is introducing these buys to investors who are looking to take advantage of this unique time in the Arizona real estate market.”
Neighborhood Ventures offers investment opportunities to accredited and non-accredited individual investors of all income levels, with a minimum investment amount of just $1,000. To date, the group has purchased 15 properties and sold six of them, paying investors a 12% preferred annual return on their investments.
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