$6.5 million purchase price. $500k construction budget. 23 months later: positioned to return 100% of investor capital.
The 45-unit Manchester, New Hampshire property we acquired in July 2023 perfectly illustrates what we look for in value-add multifamily deals, and why our approach consistently outperforms renovation-heavy strategies.
While most investors chase deals requiring significant capital improvements, we’ve identified three specific traits that create the most attractive value-add opportunities with substantially less risk.
Trait #1: Management-focused value creation
Lakeside Landing was in excellent physical condition but suffered from poor management. Rents sat significantly below market, and collections were abysmal under the previous management company.
We prefer deals where we can primarily increase NOI through management improvements rather than spending money on renovations. This approach allows us to get paid for our knowledge instead of swinging a hammer—and it works faster with less capital risk.
Trait #2: Shorter timeline to implement the business plan (12-18 Months)
Management-focused deals allow rapid business plan execution. Instead of lengthy renovation cycles, we can optimize leasing, implement ancillary income strategies, and increase NOI within 12-18 months.
At Manchester, simple common area improvements and light unit turnovers ($7K-$12K per unit) enabled us to increase monthly rent roll from ~$47k/mo at closing to ~$71k/mo by May 2025.
This speed-to-execution means earlier capital events and faster returns for our investors.
Trait #3: Market expertise and team infrastructure
We only pursue deals in markets where we have established teams, proven contacts, and absolute conviction in our underwriting assumptions.
We’ve done 55+ deals throughout New Hampshire, where our local team and market knowledge eliminated execution risk and ensured predictable outcomes.
The results speak volumes:
With a minimal construction budget relative to the deal size, we’ve positioned this asset to return 100% of investor capital if we executed a capital event today (current value of $8.75M using a cap rate of 6.5% on T-12 NOI). However, we’re currently evaluating additional value-creation opportunities, including developing additional units on the property, which could drive even higher returns.
This deal exemplifies our framework: management-focused improvements, rapid implementation, and deep market expertise create lower-risk value-add opportunities with superior returns.
- For passive investors: These traits should guide your sponsor selection. Look for operators who prioritize management improvements over heavy renovations, can execute quickly, and have proven track records in their target markets.
- For active investors: Use this three-trait framework when evaluating your next opportunity. The best deals often require the least capital but the most expertise.
Lakeside Landing proves that sometimes the most profitable value-add strategy is simply knowing how to manage what already exists.