Thinking about 2018

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We’re coming to the end of deploying our current fund and, as usual, I’m considering several possible ideas for our next one.

The most likely possibility is that we will do another round of rehab deals, this time ideally with a larger fund of (slightly) cheaper equity… say, in the 5% pref range, instead of the 6-7% we offered in our last fund. By raising cheaper capital, we would be able to buy the ~6% cap deals we’re seeing (instead of waiting around the 6.5-7% ones, as we have been doing).

However, I’m also considering the possibility of building a bunch of smaller apartment buildings.

We’re building a pipeline of off-market opportunities to buy single family homes on developable lots in areas we like very much. The idea would be to buy a bunch, spend the next year or so permitting them, then either sell as entitled land or else build (construction pricing and rents permitting).

Since we rarely keep things simple around here, there’s also the possibility that we’ll end up pursuing both opportunities simultaneously.

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