Flip and Danny walk through their acquisition of Ridgeland Ranch, a 129-unit apartment complex in Jackson, Mississippi, purchased for roughly $12 million in March. The property was 90% renovated but underperforming due to poor management; they plan operational fixes and amenity work to push the value to $16-17 million in three years.
Questions this video answers
129 units.
March 25th (year stated elsewhere in metadata: May 10, 2022 video date).
About six months from start to finish.
Approximately 90% renovated.
Around $12 million.
Hey, everybody. Flip and Danny here, founders of the Freedom Real Estate Group family of companies. And welcome to another episode of our.
Podcast which is called Freedom through Passive Income.
That's right. And today's episode is called behind the Scenes Ridgeland Ranch.
Good job, Tony.
We've been gone for the last couple weeks, so it feels weird to be in here again. But we're back in the studio.
That's right, live. So Ridgeland Ranch, I don't know how many of you know what that term is because it's a nickname for the property that we closed back in. What was the close date?
March 25th.
March 25th. So it's 129 unit in Jackson, Mississippi. You're going to be talking about that a little bit more. But the reason that we wanted to share this case study with you is because there was a big long delay to actually getting closing to closing. So it's about six months from start to finish in terms of the closing issues that we had. So this was a loan assumption. Whenever you're assuming a loan, it means that maybe Flip and I have a loan on a multi family property and maybe there's a prepayment penalty associated with it. And so you as the buyer come in and negotiate with us and say, hey, I will assume the existing loan that's already on the property. Right. So we don't have to deal with the pre prepayment penalty. Well, that's what our partners Arianne and Chris were doing. It was a loan assumption. So in typical real estate world, there's delays anyway. There's almost always delays. Just count on it. It's part of the real estate game now. Hopefully, as new technology emerges like blockchain, perhaps there will be less delays. But for now we're not there and we're still going to have delays. So in this loan assumption, maybe the attorney asked for something, maybe the seller asked for something, maybe the title company asked for something, maybe the underwri ask for something. Every time somebody asked for something in the process of this, it took about two weeks to go full circle because then they would ask for it, it would get it, it would go to an attorney to review or an underwriter review or somebody to review. And then something else would come up and then go in the process would go again. And so it was like every time that we're submitting these docs, we're like, okay, here's another two weeks. Okay, they asked for this. Okay, here's another two weeks. And it just went over and over. So it was a Very, very long delay. It was frustrating for us, frustrating for our investors, but we stuck in, you know, for the long haul because this was a really good deal. And we're gonna talk about that.
Yeah. Lots of upside in this one.
That's right.
And it seems like every time I. Hey, how's it. How's Bridgeland Ranch going? Well, we're waiting on seller docks. I heard that, like, for two months. So Ridgeland Ranch is actually. It's in. It's in Mississippi, and it's one of the nicest cities in the Jackson msa.
Yeah.
The surrounding area. And everyone wants to live there. It's got great schools. So that's one of the major reasons why this was not a. Oh, hey, we're going to walk away from this one. We stuck into it.
Yeah. Also, there's some zoning issues there making it harder or a bigger barrier to entry for other people to come in and build more multifamily properties. And because of the high demand that's already there and the big barrier of entry for other people to then build more, it just means, again, more and more demand. In fact, Chris and Arianne just recently did a video and they were talking about the fact that they're getting. Walk inside, like, they're not marking at all. And people are walking in asking, how much can we rent, you know, you know, units for here in this area? So there's a huge, huge demand. That's a great opportunity.
Yeah. And 90% of the property was already renovated.
Yes.
So it was just simply underperforming. You know, we always look for the value add. Well, value add wasn't on renovating. It was already done. The value add was on the management and staff.
Yes.
And so we brought that, you know, so immediately they're going to bring the income up because of the underperforming asset there, and the expenses are gonna go down. So it's huge.
Yeah. And there's when he talks about that not only just so underperforming due to bad management, really, because even the pool. There's a nice pool there is green.
Is it not supposed to be green?
No, not supposed to be green. It's supposed to be blue. So the rents weren't at the top market rate. The property wasn't being taken care of the way it should. So of course you're not going to get the top market rate. So the whole goal here is just better operations, better staff, better management in place. Clean up the pool. We're going to provide amenities stuff. We're talking about grills, and what are those gazebos? Obviously cleaning up the pool. But just an area where families can go there. Since it is such a great area for schools, families can go and live there. And it's like home. Right. They've got a good community, good amenity package there and something to match what the other apartments there are.
Right.
Offering as well. So we're super, super excited. And then there's going to be, we're going to try and refinance in three years and when that refinance happens, I believe we bought it for around 12 million, something in that range and the anticipation or expectation is to bring value up to around 16 to 17 million within that three years. So that's when we say this was a good deal. Everybody was just sticking around going, we're waiting because this is a good enough deal. Just go through the muck and the delays in order to get to the finish line. Because, you know, it was just fantastic area, fantastic buildings and lots of opportunity for us and the investors.
Well, awesome. And I think that's it.
Yeah, that's it.
Well, excellent. Well, make sure that you are going to our website, Freedom Capital Investments, and join our investor club because you're going to hear about properties like this.
Yes. Because if you weren't on our investor club, you didn't even know about this deal.
Yep.
Because it only got sent to our investors that are in that club because it was a 506B which stands for buddy, you have to know us, you have to talk to us in order to see some of these deals.
So go to our website, join that investor club. Now we're also on all the social media platforms. We've got our groups out there and the whole team's out there. So if you have any questions, make sure you head out there and get your questions in or requests or recommendations or anything like that. And make sure you're subscribing on YouTube and giving five star reviews and all that fun stuff. But we always end all of our episodes with Invest Smart, Live happy. Bye bye, everybody. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on this show are not guaranteed. All investment strategies have the potential for profit or loss, y'.
