Casa Feliz – Dallas

If we lose our older multifamily stock, millions will have nowhere they can afford to live in our major cities. This project proved we can save it – without government aid.

Situation

In early 2012, Indian Ridge was a broken-down failed tax-credit apartment near demolition, following years of foreclosure and receivership. Acquired at a discounted price via syndication with outside investors, we renamed it Casa Feliz (“Happy Home”) and set out to create the best blue-collar living experience for miles around.

Aproach

We invested more to rehabilitate and reposition the property than it cost to purchase - including 90% of the interiors, exteriors from foundations to roofs, plus new pools, playgrounds galore, and access gates. But still, total cost/door was just 1/4 that of new tax-credit builds for housing tenants – a fixed cost advantage we knew even government largesse couldn’t compete with.

Results

Everyone from our local council member to the entire neighborhood was quite impressed, and we took the property from 50% occupied to mid-90s at much higher rents.

In December 2014, we financed the previously all-cash deal with sub-3% FANNIE debt, enabling the investors to get all their cash out, plus a 10% accumulated return. We still have lots of equity, for total return over 100% in less than 3 years. Going forward, it should cash flow nicely with zero basis, for an infinite yield on net cost.