Introduction
MJW Investments seeks to own and reposition quality, well designed and well located multi-family properties and converting them into College Housing complexes; as well as acquire existing College Housing projects with growing demand in highly dense and populated areas focused around college campuses throughout the Western Region of the nation. MJW believes its superior reputation and diverse experience as a full service Real Estate Company provides it with key advantages in sourcing acquisitions in this specific and growing College Housing market.
MJW uses the real estate market value cycle for investment strategies, including the identification of market and value-add opportunities, periodic analysis for disposition of properties or capital improvements, and hold/sell analysis. On the operating side, MJW uses this valuation tool to analyze rental rate growth, capitalization rate assumptions, tenant retention, and leasing strategies. The current market conditions are favorable to strong growth markets and value-added investments, which are characteristics of the College Housing market.
The focus of the investment strategy will be to attain an initial IRR in from 15% - 25%. MJW will have a hold period of the assets between three to five years or when market dynamics dictate a favorable liquidity event. The primary goal of MJW is to strategically focus on acquiring assets in the outlined targeted markets and to create a portfolio of over $400,000,000 by partnering with company’s such as, MHE, Inc
Joint-Venture Program
MJW seeks joint-venture equity partners to establish a $400,000,000 acquisition program to acquire existing multi-family assets in desirable and growing areas in the Western Region of the nation to convert to College Housing providing for students and college faculty. Targeted project IRRs will range from 15%-25% with hold period between three to five years. Once the target size of the portfolio is strategically met, an exit strategy of three to five years where the portfolio will be sold off in its entirety or as individual assets, whichever scenario provides greater returns for the vested parties.
MJW has identified the College Housing market as an attractive high-growth and recession proof market poised for solid growth and lucrative returns for investors due to high demand and scarce supply throughout the United States. The student population is currently experiencing rapid growth throughout the country and with the shortage of supply existing in the market place, MJW confident that this will lead to positive market dynamics for investment opportunities.
MJW focuses on strong market fundamentals supply and demand, trends, business cycles and risk management can meet our projected returns. MJW’s core focus is seeking opportunities where a value-add business model can be implemented and a repositioning of the asset can occur. The target acquisitions will be underperforming assets in growing areas which have the potential from a construction and design perspective to be repositioned with minimal costs of conversion. MJW’s hand-on approach will integrate from management to construction to disposition. Other factors considered will be the impact of the management team’s ability to extract additional value from the assets by reducing operating costs, utilizing neglected assets, decreasing vacancy rates, and increasing rents to market rents.
MJW College Housing Business Models
MJW will typically use two business models to achieve its desired returns on selected College Housing properties each including pricing by-the-bed and be walking distance from campus. By adding more beds in existing bedrooms, we lower housing costs for the students and increase rental amount for each unit.
Model No. 1 - Minor Repositioning
The first business model will allow repositioning of the units using a modest budget to refurbish units with modern amenities that the parent’s of students are willing to pay “top dollar” to ensure their child’s living situation helps support a good education and the continued safety while at school. These projects create rental premiums of 30% above previous rental rates and are above the majority of the student rental units in any given market and should be conveniently located for the student. The general upgrades will include conveniences such as newly remodeled kitchens and new appliances, Flat Screen TV’s, ceiling fans, refurbished bathrooms, the addition of vanity sinks for convenience (if necessary) and amenities such as wireless internet, cable TV, bicycle parking, and secured entry into the complex.
Model No. 2 - Moderate Repositioning
The second business model includes all of the above conveniences and rehab work combined with the addition of an extra sleeping space for an additional occupant. When applicable this additional sleeping space will add an extra bed and/or bedroom to each College Housing unit, thus increasing the attainable rent for the said apartment. These alterations allow higher occupancy and increased rental rates. The value-add play is to significantly increase the Net Operating Income of the properties by adding additional sleeping quarters to the units, while increasing desirability to students by up-grading kitchen and bathroom hardware, cabinets and counter tops to rival existing luxury apartment complexes in the area.
MJW stresses the importance of creating a higher quality of living for the students that will inhabit the newly remodeled units. Currently there is an extreme lack of quality housing at the majority of Colleges/Universities across the nation as most institutions have histories of 50+ years of existence, and the housing immediately surrounding the schools tends to be of the same age and generally reflects little updating or upgrades for the students. MJW’s focus is to capitalize on this lack of supply for quality housing nearby large institutions and deliver a well located, secure and clean product that is demanded by both Students and their Parents.
MJW will also reface the exterior of the buildings.