Following the same demographic trends that spurred the real estate projects, these new ventures add value to a large number of people nationwide.
Locally, I launched Montana Trade Exchange in September, 2011, to serve the needs of Montana businesses.
In the of Fall 2010, Pulsifer Investments, LLC was asked by a long time partner Rocky Mountain Development Group to take on a role as asset manager for their growing portfolio of Low Income Housing Tax Credit properties. The assignment is a perfect fit to capitalize on Pulsifer’s strengths and experience in the ownership, management, and operation of properties, as well as leverage his experience managing extensive renovation and CAPEX projects.
The asset manger’s role is that of an active owner able to undertake strategic initiatives to increase asset values and cash flow, watch operating costs closely, and advise and direct property managers, regional managers, housing authority officials, bankers, and investors on all aspects of the project. The assignment is a perfect fit for Pulsifer and Rocky alike.
Rocky Mountain Development Group has a diverse portfolio of LIHTC properties in Florida, Montana, and Oregon. In partnership with the Wishcamper Companies of Portland Maine, Rocky has additional projects in Connecticut and Mississippi and Nebraska.
Additionally in their home town of Missoula, Montana Rocky is building a new LIHTC project in partnership with the City of Missoula Housing Authority.
Rocky Mountain Development Group is an innovative developer and owner and operates with the highest standards of integrity and open communications. Pulsifer Investments, LLC is proud to be associated with this excellent firm of top notch individuals dedicated to providing quality properties.
The property is a classic case where the sum of its parts is worth more than the whole.
Built in phases from 1991 to 2001, the 171 units broke down to 120 units of quality apartments, 30 units of townhomes suited to single family ownership thru condo conversion, and 16 units of 2001 era apartments that are also better suited to individual ownership. An additional 4 units plus a single family home rounded off the project.
The property was acquired in June, 2007, and work commenced immediately on needed and overdue capital improvements to the 120 unit, including siding, landscaping, paint, and interior improvements. This work was largely complete by May 2008.
Simultaneously, the condo conversion of the 16 and 30 unit properties commenced in the fall of 2007, and was complete by April, 2008, and included phase 1 of 2 phases of exterior work on the 30 units, plus interior improvements.
With 2 units closing upon condo conversion recordation, the market confirmed our believe in the desirability of these units.
By September 2008, however, with the credit crisis in full swing, the real estate market in turmoil, and residential lending disrupted, the retail sales activities of the Riverwood were temporarily suspended until better times.
Patagonia Preserve, Patagonia Arizona
In horizontal land developments, my values include community enhancing amenities and natural conservation features attractive to the Baby Boom generation.
For example, in Patagonia Arizona, the former Lazy R.R. ranch, which I purchased with partners in 2005, is ideally located on the edge of an eclectic town with dramatic mountains and authentic ranching traditions, a great coffee shop, and world class bird-watching, but is just 1 hour from Tucson International Airport and the renown Tucson medical facilities.
In this case, the property was valued on its agricultural capacity, not its recreational or development value. The business plan prior to my sale of my interest in the development was to unlock added recreational and development values by sensitive development combined with conservation easements.
The conservation of land not only saved habitat and open space for the community, but also enhanced values for buyers- a classic double bottom line.
Sunflower was a wonderful business experience. As an owner operator and buyer of apartments, property management was a necessity for Nathaniel Pulsifer.
Pulsifer acquired a portfolio of management contracts from friend and mentor Buck Blessing in 2005, and started Sunflower Management from that core. This jump from self management to third party management and small busienss ownership was a major turning point.
The company grew from 3 to 18 employees in 2 years, from 80 units under management to over 400, and was sold prior to Pulsifer’s move to Montana in 2007.
The lessons from Sunflower allowed for the seamless takeover of the Riverwood apartments in 2007. This meant bringing the property and its management staff from a yellow-pad and Quicken home office management system into the digital age, with an offsite hosted ASP solution from RentManager for property and financial management, a new chart of accounts, and full training in proper trust compliant accounting and tenant management .
This management ability and familiarity with best practices and legalities of third party management, plus Pulsifer’s experience managing physical renovations and improvements, made the Riverwood project a reality.
Meadow Wood Apartments, Medford Oregon:
Supply constrictions and replacement costs are our core determinants of value in improved property projects, such as apartments, condo conversions, and vertical construction. Management problems layered on top of these fundamentals are our forte, and add still more value for investors when solved.
The Meadow Wood is an 85 property we purchased in an attractive, established location at a significant discount to replacement cost from a national REIT. This discount alone indicated strong value, but financial mismanagement added icing to the cake.
The property was purchased at a cap rate of then-current cash flow. The sellers managed from a distance with little attention to local market forces and no significant maintenance. Our analysis revealed that though the cap rate was low, the NOI of the property was far below its potential. We improved occupancy from 85% to 100% within 6 weeks of purchase, and NOI jumped 35% in subsequent months.
This cash flow improvement alone, if harvested, would have produced a return in excess of 30% for our investors in a matter of months, however we chose to execute our plan, laid out prior to purchase, to re-configure the property into condominiums in the growth constrained community. Over $1M of exterior and interior renovations have produced a significantly enhanced property, and rapid sales confirm the market opportunity. Our customers are generally first time buyers and downsizers attracted to the area for its quality of life.