Villa Ana Apartment Homes

"Success will not wait. If I delay, she will become betrothed to another and lost to me forever. This is the time. this is the place. I am the man. I will act NOW!" - Nido Qubein
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-Dale Carnegie
"Unless you're willing to have a go, fail miserably, and have another go, success won't happen." - Phillip Adams

Villa Ana Apartment Homes

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Villa Ana Apartment Homes (formerly known as Star Crossing) is a residential community consisting of 176 units located in Houston, Texas. It was a bank-controlled, foreclosed property acquired directly from Prudential Mortgage Capital prior to its acquisition.

• Property was built in 1979 and features pitched roofs, access gates, business center, fitness center, a pool, and washer and dryer connections in all floor plans;

• Distressed asset sold out of foreclosure

• Surrounded by strong employers and employment centers

• Great marketability with new signage off of Sam Houston Tollway and excellent accessibility to Houston’s major thoroughfares

• Located near popular retail and entertainment destinations;

• Property was approximately ten percent below market occupancy when compared to stabilized class B and C assets within a two-mile radius (56 properties), providing a great opportunity for BRES and its partners to significantly increase occupancy and total revenue;

• Price per unit: Stabilized class B and C assets within the surrounding area of the Property have sold anywhere from $28K-30K per unit throughout our 2008/2009 economic climate

• Frontage and excellent marketability on the Sam Houston Tollway, one of Houston’s largest thoroughfares and within steps of US Highway 59 (Southwest Freeway);

· Approximately three miles from the Westpark Tollway and US 90;

• Near numerous major-non-highway thoroughfares including Gessner Rd., Bissonnet St., and Westpark Dr.

The prior loan made on the property was approximately $5.35MM ($30,397) in May 2005. BRES and its partners acquired the asset for $2,700,000 ($15,340 per unit). As of March 10^th of 2010, the property stood at 75.57% leased and 77% pre-leased. Although the vacant units were predominately not leasable, they only required small refurbishments to bring them on-line after a complete inspection was made. Costs ranged from $800 to $4,000 per unit to make them lease ready. As units have been refurbished, they have been leasing very rapidly.

This apartment community offered lenders and investors a truly rare opportunity to invest in a “classic” turn-around opportunity with sizable downside protection due to the low acquisition price. BRES and its partners acquired the asset, renamed the property, cleaned out some of the delinquent paying residents and within 2 months performed 85% of the full rehab/reposition of the property – items include landscaping, renovating the leasing office, HVAC replacement, interior unit repairs, parking lot repairs, and remarketing the property to bring it back over 90% occupancy within 10 to 12 months.

The exit strategy will be to sell the property within 5 years or less. After year five the projected NOI is $460,418 and at a conservative 9.0% cap the value of $5,115,755 or only $29,065 per unit.