Investment Strategy
Acquire
We've built strong relationships over the years that help us source properties for prices that are significantly under market value. We target location-specific B-class multifamily buildings that require extensive rehabilitation and value-add opportunities, often with little to no in-place cash flow at the time of acquisition.
Renovate
We implement an opportunistic business plan which involves complete gut renovations for each asset. Dated units are modernized, exterior facades are upgraded, and dilapidated mechanical systems are replaced, which dramatically improves rents, ultimately increasing the value of the property. We mitigate risk through the procedures and the experience we have built over a decade.
Stablize
When a renovation is complete, we lease each new unit to qualified tenant(s), and we operate the asset with our in-house property management team. We have the resources and the experience to maximize investment returns and streamline property operations. Our resident portal, for example, enables NXT to stay connected and communicate with residents in real time.
Acquisition Criteria
The following criteria is used to identify undervalued multifamily properties for acquisition:
- Multifamily commercial apartment buildings.
- 5 - 45 units in the $1mm to $10mm range.
- C to B- type properties.
- Location: “Path of progress” target neighborhoods, including Roscoe Village, Bucktown, Avondale, Wicker Park, Logan Square, East Humboldt Park, Andersonville, Edgewater, Uptown, Lincoln Park, and Lakeview (i.e. 60618, 60622, 60642, 60647, 60614, 60657, 60613, 60640 zip codes).
- High vacancy and/or properties that require complete renovations.
- Class B to A areas .
NXT Realty takes pride in building strong relationships with local brokers to get their "pocket listings." We will frequently work with “wholesalers” to take over contractual rights to a property and we also search for building owners and work with them directly, instead of waiting for properties to come to market
Value-Add Strategy
We implement a conservative underwriting model for each new acquisition. Among other required metrics, we always look for properties that have the potential to generate a specific amount of cash flow per unit. We’re able to predict this cashflow based on the "Value Plays” we implement in each business plan, since we can predict future rents based on the improvements we make to an apartment.
Value Adding Components We Capitalize On
- Mismanagement
- High vacancies
- Below market rents
- Deferred maintenance
Examples of Value Adding Components we incorporate at NXT Realty
- Improve unit interiors to have a more modern look with new flooring, appliances, plumbing, electrical, insulation, updating kitchens, and bathrooms.
- Superior management that handles trash removal, lawn care, snow removal, and water.
- Adding in-unit laundry
- Add curb appeal by improving the landscaping, fully renovating the building, and picking a location that has great neighborhood features.
Stabilization
Once a building renovation is complete, NXT Realty handles the leasing and operation of each asset. We have implemented a best-in-class property management system with the following in-house features:
Accounting & Financial
- Full-service accounting that handles all financial transactions and reporting.
- Correspondence with lenders to meet the loan requirements for annual reporting and loan servicing.
- Preparation of lender packages and financing consultation services to assist with construction, permanent, or other financing needs.
- Detailed budget templates used as a tool to maximize rents and control expenses.
Onsite Maintenance Team
- Our maintenance team is able to service each tenant request and provide excellent customer service to our residents.
- From grounds pick-ups to appliance repairs, our team has the experience to handle a vast array of different issues.
- Our crew is available for after-hours emergency calls, if necessary.
Professional Services
- Professional real estate tax appeal services in house for each asset.
- Contract review for all phases of the transaction.
Marketing
- With a full-service Brokerage in-house, our experienced marketing staff and leasing team is available to develop and execute marketing strategies.
- Professional photographer and videographer.
Asset Management
- Improve unit interiors to have a more modern look with new flooring, appliances, plumbing, electrical, insulation, updating kitchens, and bathrooms.
- Superior management that handles trash removal, lawn care, snow removal, and water.
- Add curb appeal by improving the landscaping, fully renovating the building, and picking a location that has great neighborhood features.
