Single-Family Homes (Buy, Rehab, and Sell)

Industry

Real Estate

Company Type

Residential Fix and Flip

Location

US

Size

$15 million

Investment Type

Equity/Mezz

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Helping Great Companies Grow

Overview

  • Apex National Real Estate flips (buys, rehabs, and sells) properties in Illinois, Indiana, and Wisconsin. Mostly single-family homes – remainder 2-5 unit apartments
  • Seeking $10-15 million of equity/mezz to increase purchases from 3 homes/month to 11
  • Believes current market disruption offers significant buying opportunities
  • One of the two largest flippers in its target markets – has bought, renovated and sold over 100 homes since 2017 (including work done for other fix and flippers)
  • Generated over a 13% unlevered IRR on Apex owned and sponsored fix and flips since 2014
  • Targeting ~20% levered IRR (detailed financial model with assumptions and scenario analyses function available with NDA)
  • Deliberately conservative strategy to build a portfolio that is diverse by neighborhood, home price, and property type
  • Large and growing network of real estate brokers, attorneys, contractors, etc. provides referrals and reliable construction outcomes
  • Led by Mark Filler, management has significant experience in residential real estate and construction, including licensed, insured contractors
Helping Great Companies Grow

Opportunity

  • The fix and flip market opportunity is extremely large
  • Approximately 150,000 properties are sold annually in the Apex target areas
  • Flipping homes can have high margins – management also believes it is lower risk than buying homes to hold for long-term rental
  • Finding properties to flip is extremely competitive
  • Most investors feel that their number-one challenge is sourcing good deals
Helping Great Companies Grow

Solution/Strategy

  • Apex is one of the two largest flippers in its target markets
    • size and reputation result in large network of referral sources, including real estate brokers, property wholesalers, attorneys (real estate, bankruptcy, divorce, probate), and mortgage servicers, which consistently send Apex their deals
    • can invest substantially more in technology, automation, marketing, talent, and materials sourcing than most competitors, which tend to be smaller, local builders
    • should have more deal flow than other investors in its markets – enables Apex to be highly selective and disciplined
    • does not compete with large institutional buyers, such as Blackstone’s Invitation Homes, American Homes for Rent, and Cerberus, which only buy homes to rent, not to fix and flip
  • Portfolio will be diverse by neighborhood, home price, and property type, built though a deliberately conservative strategy
    • not looking for “home runs” – operate in stable and growing neighborhoods where properties sell with good velocity rather than speculate on outsized growth
    • avoids markets with high crime, homes near the top price point in their markets and development deals that have longer time horizons
    • to date, Apex’s average expected selling price is approximately $425,000
Helping Great Companies Grow

Management

Mark Filler

Founder

Prior to Apex, started three successful businesses involved with residential real estate – Prism Mortgage Company, Prospect Mortgage Company, and Jordan Capital Finance (JCF). No investors experienced losses and all lenders were fully repaid. These companies originated over $50 billion of mortgage loans. Sole founder/CEO of JCF, which had 2,000 clients nationwide and became one of the top three lenders to fix and flip investors in the US. JCF developed sophisticated property valuation/underwriting methodologies that resulted in no loan losses. JCF was sold to an affiliate of The Blackstone Group in 2017. BA, University of Michigan. JD, Harvard Law School.

Matthew Arminio

Principal

Real estate investment professional with an extensive background in the single family REO to rental industry, having helped institutional buyers identify, acquire, and rehab over 500 homes in the Chicago MSA since 2012. Founded Spring Lake Capital, a single-family real estate consulting firm that aids clients in the implementation of acquisition strategies in the single-family marketplace – helped clients purchase over $100 million in residential assets in Chicago. Extensive background in commercial real estate private equity and lending across all major asset classes as well as brokerage and acquisitions. BA, Business Administration, The University of Notre Dame. Masters, Real Estate Finance, DePaul University.

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Thanks, Ken

Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784
kmargolis@castleplacement.com

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