Buying Criteria

AJX Capital evaluates multifamily real estate based on several criteria. This includes looking at the location, evaluating the condition and quality of the property, assessing the current market conditions, and doing an analysis of any potential upside or downside risk associated with the investment; other considerations include rental history, rental growth and occupancy. See below for details:

Market Focus

Seeking markets that showcase consistent GDP, employment, and population growth in addition to increased demand for apartment rentals
Equally important is sector diversity. If a market is ruled by one primary industry and it collapses, many will be out of work in a short time frame
Within a particular MSA, properties must be located close to major employment hubs and transit routes
Zip code with $70k Minimum income
Housing supply-constrained markets
Appreciating home prices
Major transportation corridors

Primary Markets Focus

Alabama
Florida
Georgia
Mississippi
Tennessee
Texas

Asset Profile

Class B & C Multifamily
Value-add with upside through interior and exterior renovations
Garden style
Most units are in classic condition
Built in the 1970’s or later
80+ units per property
Target properties that are either self-managed or highly vacant compared to the submarket
Very often properties that are self-managed or operated by small mom-and-pop owners have significant inefficiencies that can be mitigated through implementing professional management at the property (reduction of operating expenses, proper marketing sources, pick-ups in rental and other income, etc).

Value-Add and Capital Improvement Programs

Key improvements: Addition of washer-dryers, appliance upgrades, kitchen and bath renovations.
Introduction of carports/garages and eco-friendly utilities like low-flow toilets or RUBS.

Target Return Profiles

3-to-5-year target time horizon, but opportunistic
Will sell after 1-2 years if the right opportunity presents itself
15 - 20% average annualized return on a pre-tax basis to LP investors
75% average return on equity to LP investors at a refi

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5173 Waring Rd. Ste 2, San Diego, CA 92120

info@ajxcap.com

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