Investment Strategy

Rhumbline acquires Class B and C multifamily properties and creates value by providing residents with updated, well-maintained, and affordable apartment homes. New supply of Class B and C apartments is constrained, while demand for updated yet modestly priced apartment homes is deep. Rhumbline believes that it can generate stable returns by limiting resident turnover, increasing rents modestly, upgrading unit interiors, and controlling expenses. The firm’s overall investment strategy will involve:

  • Providing residents with affordable and well managed apartment homes that are updated to include new flooring, appliances, lighting and other unit amenities
  • Utilizing relationships to source off-market opportunities
  • Pursuing multifamily assets that require value-add capital or otherwise have a competitive advantage in the market
  • Targeting inefficient markets (i.e. fragmented local ownership, inconsistent market rents, capital starved assets, or poor management)
  • Financing acquisitions using debt (70%-75%) and equity (25%-30%)
  • Improving the property and paying down debt over a 7-10 year holding period
  • Targeting annual cash-on-cash returns of approximately 7%-10% and net internal rates of returns (IRRs) of approximately 15%-18% over a 7-10 year holding period