Multifamily Tuesday: Why Aren't You Using the Jobs Act?
If you still think the Jobs Act is Steve Jobs' memoir, you may be missing out on cold, hard cash. The government has made general solicitation easier by allowing funds to advertise for investors, so here are two investment companies happy to let you know they’re looking.
1) East River Partners
Joe Cohen and Jody Kriss did just fine with their first discretionary fund, raising $20M through accredited investors and co-investment. With that, they were able to do five acquisitions and then rehab or build boutique, high-quality, family-friendly condos and rentals from three to 15 units, mostly in Brooklyn. They timed their launch right, as property values and consumers’ taste for quality combined to raise their Brooklyn unit sales from $800/SF to as much as $1,400/SF today. Now they’re turning to bigger deals. They can’t say how big their second fund will go—only that ERP Fund II will be bigger than the last. And they’d love to do two or three acquisitions a quarter. East River has also grown from three employees in 2010 to nine, and they plan to add more this year.
Now they’re working on a four-unit project at 432 10th St in Park Slope (above), citing South Slope's emergence as a family destination (YMCA, schools, and stellar transportation). They're also doing 15 units in Brooklyn’s Fort Greene, as the area has exploded with 11 subway lines, the Brooklyn Academy of Music, Atlantic Yards, and a push eastward from Carroll Gardens, Cobble Hill, and Park Slope. Joe and Jody are devoting equal attention to Manhattan's supply-constrained neighborhoods, renovating the floors above a synagogue at 415 E 6th St into three lofts, plus an UWS project. They hope to find hole-in-the-doughnut sites or move into emerging neighborhoods for the second fund’s projects—think Gowanus between Carroll Gardens and Park Slope.
2) Procida Advisors
Billy Procida (snapped yesterday) runs a single discretionary fund with no expiration. This is his third, launched in 2011, and he hasn’t missed a dividend in 13 years (this year's will be 15%). The former developer digs using the money he manages (he’s the primary investor) to finance others’ projects rather than developing his own; he still gets to weigh in but no longer has 150 people on his payroll. Billy invests in anything within 100 miles of his Englewood Cliffs, NJ, home base. Beyond the industry go-to housing sector (he's recently invested in 20 townhomes in the Rockaways and $150M on three-bed, two-bath houses with Ryan in NJ), he’s already hedging against the next recession with construction yards, charter schools, and mental health facilities, all of which he views as recession proof.
