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How is ARI compensated?
Once all the investor/Member equity is committed and once the purchase is consummated, ARI gets a commission of 1-1.25% of the purchase price at closing. ARI also is compensated at re-financings (if any) during the hold period. ARI will work with a multi-family specialty brokerage company on the sale and participate in the commission with that broker.
Who pays ARI?
On the front end (the purchase/acquisition) some or all of the 1-1.25% may be added to the sales price and paid out by the title company handling the transaction. If any part of the above fee is added to the sales price it will be disclosed as an obvious line item and reflected in the proforma as part of the investor package during your due diligence. No surprises.
Who is YH (Yates Hawaii)
Mr. H.N. Yates has been involved in the real estate business for over 60 years. He was associated with Weber Brothers Realty and Embassy Development in the 50’s and 60’s developing single family subdivisions and homes in Canada’s three western provinces. In the 70’s he formed Yates Realty Services, Ltd., and worked with some of Canada’s largest Developers on major land assemblies and condominium development / construction. He acquired condominiums and a large industrial warehouse in Maui, Hawaii and office buildings in Colorado, Springs, Colorado. In the 80’s he began acquiring office warehouses and apartments in Dallas and Houston, Texas and continued to expand on that base. To date Yates Group has acquired, managed and sold over 30 apartment complexes throughout Texas with an emphasis in secondary markets. Typically, assets (60 units to 288 units), are repositioned and held from 5 to 10 years, and financing is secured through agency (Fannie Mae / Freddie Mac, Conduit sourcing, Banks and Life insurance Companies). Yates secures the equity component through personal resources and a handful of investor / associates. A planned expansion in 2020 has created a need to secure additional equity capital.
Mark Yates Graduated the University of Alberta in 1980 with Bachelor of Commerce Degree (Majoring in Marking and Finance). Passed the requirements for an Alberta real estate brokers license shortly after graduation and spent two years working for a large Canadian Development Company (Office Building construction, lease up and sale).
In 1982 opened an office in Colorado Springs, Colorado and was involved in single family development, and warehouse/office construction, lease up and sale. Relocated to Houston, Texas in 1992 to oversee the Yates Hawaii, Inc., portfolio, which included multi-family, office warehouses and retail centers.
Over the past 28 years Yates Group has acquired, managed or sold some 30 properties throughout Texas, the majority of which are multi-family apartment complexes. Equity sourcing came from personal funds and through Limited Partnerships, LLC’s and Tenant In Common 1031 tax exchanges.
Current emphasis in Texas Secondary Markets including Kingsville, Victoria, San Angelo, Brenham and Bryan / College Station. Nationally accredited third -party management and long- standing relationships with major lenders and Real Estate Brokerage Houses.
Texas Licensed Real Estate Broker since 1993 with offices in Edmonton, Alberta Canada, Maui, Hawaii and Houston, Texas. Total volume was over $45M in 2019 and targeted acquisitions of some $40M in the first quarter of 2020 (Properties under contract or secured by letters of intent).
ARI’s role in acquiring multi-family investor/partners
Apartment Realty Investments (“ARI”) is a d/b/a of Moe Realty, Inc; a Texas corporation owned by Mike O’Meara. Mike exposes multi-family investment offerings to potential partners/investors for one client only; Yates Hawaii (“YH”). YH is owned by H.N. Yates and Mark Yates. The lender on each acquisition looks to the creditworthiness, track record and experience of the principals of YH to approve financing. Principals of YH control the investment and sign as the sponsor or sole guarantor/manager (“sponsor”) with the lender.
What is ARI’s position after the property is purchased by YH?
ARI or any entity controlled by Mike O’Meara has NO equity investment or ownership in the property. ARI may invest in periodically in YH deals on the same terms you are.
Can ARI review the investment and make any recommendations for me?
In a word, no. ARI is not an investment advisor and offers no legal, accounting, or investment suitability advice to prospective investors/Members. You will be given a 5-year proforma with a significant amount of property information to base your decision on. Investor/partners need to engage their own legal counsel and accounting advisors to ensure investment appropriateness and suitability.
What kind of multi-family investments is YH pursuing?
Class “B” and higher Class “C” properties in smaller Texas cities. Purchase price is between $5MM and $7MM and the equity portion is around $2-$2.5MM. YH may pursue smaller assets in a submarket provided YH already owns properties in the market for economies of scale. YH does not pursue or promote high leveraged properties.
Who is the lender?
YH principal lender is Berkadia who performs underwriting and submits to Agency Debt (Fannie Mae or Freddie Mac).
What is minimum investment level?
Here is where ARI differs from the CFP’s- radically. Where other CFP’s have $1000 mins up to $25,000 mins, YH prefers larger accredited investors in the $125,000 to $500,000+ range.
Why such a high minimum investment?
As a YH investor/Member you are NOT going to some dash board on a CFP website once a quarter to view property performance. These reports are sent to you directly in periodic intervals- once per month to quarterly. The management company would be too burdened sending out 40 reports for each property if YH allowed smaller investments. 8-12 partners/investors per YH transaction is ideal, fewer is preferable. We saw a 2019 CFP competitor offering that raised $14MM in investor equity across 400+ investors! It is incredibly difficult to communicate effectively with 400 investors in 1 single investment! With that large a crowd you are not even a name and probably not even treated as a number by the sponsor –
Who is the management company?
YH has offices in Canada, Hawaii, and Houston, Texas and utilizes Centra Asset Partners, LLC (also based in Houston) for most of the YH properties. YH uses some qualified and vetted local management companies (must be approved by the lender) in submarkets far from Houston to achieve a lower management fee and increase returns to the investment group.