BC CANTOR
dearborn suite 437, MI (USA)
Role(s):
Founder/Owner/Principal
bcmi investments
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Startup
Location:
detroit
Industry:
Real Estate
Year Founded:
1997
Number Employees:
1-10 people
Business Stage:
Growth (profitable)
Entity Type:
Limited Liability Company
Description:
Target Market: Greater Detroit Michigan
Principle(s): Robert Cantor
Request: Direct capital investment for the acquisition and improvements of properties.
Assets: Properties are being identified and researched as they become available.
Introduction: Multi-family properties have emerged as one area of the Detroit market that offers some of the most attractive real estate investment opportunities. This segment of the market suffered substantial devaluation and has been slow to recover. One of the main reasons for the overall weakness has been lack of liquidity. As the market deteriorated, many of the local and regional banks who typically provided financing for these types of properties were overcome by a serious liquidity crunch which caused them to either stop lending on multi-family or tobe taken over by the FDIC and merged with another bank in the region. The results have caused many of these properties to be undervalued, in financial distress and in a state of disrepair.
The Market: The “Great Recession” which started to gain steam in 2006 was fueled primarily by the historic implosion of the housing market. While many will debate how and why this historic economic period came to be, few could deny that as the housing markets bottoms out and begin to find new equilibrium, investment opportunities will emerge. One of the housing markets most affected by “The Great Recession” has been those that make up the Greater Detroit Metropolitan region. The local economy was hit not only by the recession and the decline in the housing market, but the recession also brought the auto industry to a standstill -the region’s main employer. April 2010 saw the region’s unemployment rate top 13%, idling some 630,000 people. Massive government aid was given to the automakers and the local economy has started to recover, Currently, unemployment has dropped about 3% from its peak and the labor markets seem to have stabilized.
Multifamily Housing Market: A report issued by CBRE Capital Markets highlights the current outlook for this segment of the market. An overall lack of liquidity still dominates the market. According to the report, liquidity is starting to become available but the barrier to capital is high and seems to be for well-capitalized properties with strong historical balance sheets and profit and loss statements. The outlook for new construction is non-existent through the next twelve months. Occupancy rates did decrease by 1% over last year but still remain strong at 90%+. Market rents have continued their upward trend averaging $0.87/fs and, according to the report, they are projected to continue to increase as inventories continue to shrink and occupancy rates increase. With little local financing available for new construction, above market returns could be viable for the next several years. A full copy of the report is attached for review.
Proposal: The principles are seeking investors who will provide the capital to acquire the properties and complete all necessary improvements. Each property will be held under its own entity. With each project, the goal will be to maximize the configuration of the property during the rehab and construction phase in order to realize the highest market rents. On bigger projects over 10 units a phased construction plan will be utilized in order to have the property start generating revenue as quickly as possible.
Completed Projects: To date the development team has acquired two multifamily properties in the Detroit market: a 10 unit and a 28 unit and both properties had substantial deferred maintenance issues and required them to be gutted down to the