Acquisition Criteria

Wright Multifamily seeks apartment properties for immediate acquisition. 

Geographic Area

Two hours or less drive time from Philadelphia preferred. 

Size and Type

Two to four story Class B and C properties in Class A and B locations with a minimum of 60 units preferred. Conventional and income/rent restricted including Post-15 LIHTC projects.

Terms

Wright Multifamily and its investors will pay all cash, cash over an existing mortgage or re-capitalize an existing partnership. 

Tax Deferral

Wright Multifamily can assist in structuring an acquisition transaction, ownership and disposition to maximize tax deferral. Sellers can greatly benefit by implementing tax deferred 1031 exchanges with Wright Multifamily.

Brokers

Brokers rights will be honored assuming written authorized agency.

Property Analysis- Profitability Factors

  • Initial and Exit Overall Capitalization Rates

  • Equity Dividend Rates

  • Potential for Rental Growth

    • Competitive Position

    • Reduction of Loss to Lease

    • Correction of Deferred Maintenance

    • Feasible Property Improvements

    • Capital Replacements and Energy Savings

    • Unit Re-configuration

  • Potential Expense Reductions

    • Insurance Costs

    • Better Staffing

    • Tenant Selection

    • Enforcement of House Rules

    • Utility Metering/Sub-metering

    • Contract Re-negotiations/ Shopping Vendors

    • Water/Energy Saving Programs

    • Real Estate Tax Relief

  • Net Income Growth Potential

  • Front End Tax Shelter

  • Holding Period Write-offs

  • Magnifying Internal Rates of Return

  • Financial Advantages

    • Reduced Carrying Costs

    • Mortgage Amortization

    • Non-taxable Distributions

    • Risk Reduction

    • Leveraged Returns

Underwriting Requirements

In order for a property to be included in our portfolio, it must meet the following:

  • A break-even point (operating expenses plus debt service divided by the gross potential income) less than 80%

  • A debt-coverage ratio (net income divided by debt service) no less than 1.25

  • A typical loan-to-value ratio of 75%, but could range from 70% to 90% depending on property and investor targets and available financing

  • Targeted payback of initial equity: 5 years or less

  • Historic operational trend analysis: 3 years plus year-to-date

  • Leases and occupancy history analysis

  • Engineering and environmental assessments- 3rd party

  • MAI appraisal for financing

  • Operations, management and contract reviews

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Wright Multifamily will immediately initiate analysis of potential acquisitions upon receipt of:

  • Property identification and address

  • Property description/Unit floorplans

  • Past 3 years plus year-to-date actual operating statements

  • Current Rent Roll

  • Site plan or survey, if available