AssesmentPhase

 

 

 

 

 

 

 

 

 

Menlo Atherton Development’s investment begins long before yours. Successful results are the product of a well thought out plan, which is why we begin with a strategic process designed to maximize the value of the property and your investment.

1. ASSESSMENT

1 Day – 2+ Years

Screen  |  Assess Opportunity  |  Drive By  |  Track Potential Acquisitions

During the assessment stage, we identify potentially viable properties and measure them against our strict acquisition criteria. We prescreen the property to ensure it meets certain basic requirements. Once assured of this we assess opportunities presented by the property that would make it appealing to renters. This is followed by a “drive by” which lets us see firsthand the quality and potential of each property – it also supports our ‘gut check’ of the viability of a given potential opportunity. The last step in the assessment phase is tracking the potential acquisition. In many cases, deals that may not work initially, return to us under different terms.

2. ANALYSIS

2 – 4 Weeks

Market Research  |  Shop Rental Comps  |  Start Underwriting  |  Assess Value-Added Potential

The analysis stage of the lifecycle is where we begin our evaluation of determining the best use and highest potential of each property. We do this through reviewing detailed market research and shopping rental comps in the area of the subject property. At this point, we begin the underwriting process and the development of our “Dashboard” underwriting analysis. All of this is geared towards helping us assess the value-added potential of a given property.

3. DUE DILIGENCE & NEGOTIATION

2 – 6 Weeks

Physical Inspections  |  Site Visit  |  Lease & Financial Audits  |  Staff Interviews  |  Due Diligence Checklist  |  Shop for Debt  |  Deal Review  |  Budget Analysis

Before we negotiate the contract, we start our due diligence process. Our goal at this stage is to have a good handle on all material risks that could significantly impact the returns over our ownership timeframe. Once under contract, we dive deep, digging up all pertinent information. To get the best results, we conduct a thorough physical inspection of the property, walk each unit and audit all leases. We scrutinize historical financial statements and interview the in-place property staff. In all, we have a 200+ point checklist, which our dedicated team reviews again and again to ensure we have all our checks and balances in place. Based on our findings, we work closely with our lender partners to obtain term sheets to help structure the deal to maximize reward vs. risk. Our Deal Committee review is the final step where a go/no-go decision is made – this is where our collective years of experience helps ensure all significant risk are adequately addressed. If a “go” decision has been made and our negotiated terms have been agreed upon, we proceed to the next phase: Acquisition – less than 4% of the properties we see make it through this stage.

4. ACQUISITION

30 – 90 Days

Business Plan |  Debt Terms Finalized | Legal Documents |  Obtain Bids  |  Equity Investments Finalized |  Develop Value Add Plan |  Takeover Preparation

Once a property is under contract, we kick into high gear to ensure we close on time and hit the ground running. We must first develop a detailed business plan for the property, obtain bids, deliver on lender requirements, create and execute all legal documents interview property management companies.  We will develop and refine our value-add scope for the property which includes obtaining bids from our vendor partners and further verifying and updating our lease rate assumptions. Throughout this process we will have regular recorded conference calls with our investor partners to ensure everyone is on the same page.

5. VALUE-ADDED REHAB & REPOSITION

1 – 2 Years

Takeover & Transition  |  Renovate & Reposition |  Refine Property Management  |  Frequent Site Visits

This is where our strategies and skillsets are utilized to reposition and add value. Our team is focused on value creation through well-conceived spending plans which ensure we do not overspend nor overimprove. Careful planning ensures our investments generate cash flow throughout each stage of the investment lifecycle while also accruing capital gains.

6. ASSET MANAGEMENT

2 – 5 Years

Property Management  |  Review Performance Reports  |  Monthly Operations Reviews |  Monthly FinancialUpdates  |  Site Visits  |  Quarterly Investor Statements 

Our Property Management team focuses on continuously optimizing the performance of the property. Our goal is to maximize capital gains and cash flow through strategic repositioningh. We design property improvements through comprehensive strategies which enhance the resident experience.

7. DISPOSITION

3 – 5 Years

Prep Property  |  Select Broker  |  Market Property  |  Close Sale  |  Make Final Distribution

Our Disposition strategy is to sell when favorable market conditions align with our desired tax-advantaged holding period. We believe a successful real estate investment should provide cash flow throughout the life of the investment in addition to capital preservation and appreciation at the time of sale. We prefer to align ourselves with medium-term investors who are comfortable with holding time frames of three to five years and are interested in tax-advantaged capital gains and growing passive income. Our goal is to maximize investor returns by employing a favorable capitalization structure while focusing on optimal property performance.