164-Unit Closed in Phoenix, AZ!

Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes

I am excited to announce the addition of Ridgepoint Apartments to our Phoenix portfolio. This is a wonderful, mid-80'es construction 164-unit. Original interiors will be upgraded, and the asset will be re-positioned. Yardi currently rates this location and improvements both as B-. Personally, I think as it sits, this is a Class C. When we are done with the re-positioning in 24 months, this will be a Class B, with Class A finishing surfaces. We anticipate being able to improve revenue by + or - $300 per door...huge value-add.

Huge thanks to my partner, @Sam Grooms for all of the work he continues to do. Huge admiration and gratitude to our entire team, and all of the folks who believe in our vision!

Ridgepoint, true to form, was yet again closed in under 45 days. This is our 3rd acquisition in 10 months, totaling $40M by purchase price. We are incredibly bullish on Phoenix for years to come!

Meeting our regional at the asset this morning - the work begins!

Feel free to reach out with questions, guys. I will lay out more of the details on the blog in coming weeks, but we can dig in here as well.

29 Reply

322 views

Most Popular Reply

Justin Hannah

Specialist · ID · Member since 2015 · 38 posts · 23 votes

this is awesome! Thank you for always posting information on your deals. Are you bullish on Phoenix for all asset classes?

4 Reply

See this reply in the discussion

89 Replies

Jump to latestLatest

Sort by

Sam Grooms
Investor · Phoenix, AZ · Member since 2017 · 583 posts · 919 votes
6y
Originally posted by @Ben Leybovich:
Originally posted by @Sam Grooms:
Originally posted by @Ben Leybovich:
Originally posted by @Shiyan Cao:
Originally posted by @Sam Grooms:
Originally posted by @Ben Leybovich:
Originally posted by @Shiyan Cao:
@Ben Leybovich
Congratulation on closing the deal! can you share the top 3 reasons why you choose Phoenix AZ over other popular places (TX, GA, etc)?

Population Growth
Job Growth
Timing in the RE Cycle

Shiyan, to elaborate on Ben's message, Phoenix is in the top 3 in rent growth, population growth, and job growth. No market can compete on those fundamentals. It's also a lot easier to underwrite operating expenses in Phoenix. A big variable is usually property taxes. However, we have a law here that limits your tax increase per year to 5% (there are some other items that can trigger an exception, but they're easy to avoid). So we just underwrite a 5% increase every year and call it a day. Lastly, proximity. Ben and I both live in Phoenix MSA. I can get to any of our properties in 25 minutes. We know the submarkets well and can fine tune our underwriting moreso than someone across the country.
To summarize:
1. Phoenix is #1 in multifamily fundamentals
2. Limitation on property tax increases
3. Proximity for us

Thanks for sharing, Sam. Proximity to hot market is a big advantage IMO. Just curious what would you do if you live in a pricy and not so well market. Would you choose long distance?

You couldn't get me to buy in CA if you put a gun to my head...

Now, Benjamin. I'm sure you'd choose to live in that scenario.

Samuel, this is why we don't place
investor capital in CA.

Correct. But gun to your head, you're buying real estate in CA.
0 Reply
Michael Ealy
Developer · Cincinnati, OH · Member since 2018 · 1k+ posts · 3k+ votes
6y
Originally posted by @Sam Grooms:
we just got the reporting for December. Income is up $15K over November. November was up $15K over October.
As for the renovation, we added a new ramada/bbq area, added a dogpark, the playground is going in now, they just finished painting the property last week, and plans for the new office/gym have been submitted to the city and we expect to start that project the first week of March.
About two months ago, we took over the interior renovations from a third-party and hired our own crew. Our renovations are averaging 30 days, while the third-party was double that, with some units getting up to 90 days. Cutting down on that vacancy is a big reason for the increases in November and December.
We also cleaned house when we took over and evicted quite a few people. Sure it hurts for a month or two when you see income going down, but you have to believe in the plan and process. Having better tenants in there has also contributed to the increases in November and December.
We haven't even sent this to our partners/investors yet, but here's a graph of the income since we took over.

This is awesome Sam and Ben and congrats!
Some people here on BP might say "That's too good to be true" but I can see why your numbers have increased like that.
Vertical integration works. It's only through vertical integration that we are able to have renovation costs 50% (or more) cheaper than our competition and yes, we get it done faster as well.
0 Reply
Ben Leybovich
OP
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
6y
Originally posted by @Sam Grooms:
Originally posted by @Ben Leybovich:
Originally posted by @Sam Grooms:
Originally posted by @Ben Leybovich:
Originally posted by @Shiyan Cao:
Originally posted by @Sam Grooms:
Originally posted by @Ben Leybovich:
Originally posted by @Shiyan Cao:
@Ben Leybovich
Congratulation on closing the deal! can you share the top 3 reasons why you choose Phoenix AZ over other popular places (TX, GA, etc)?

Population Growth
Job Growth
Timing in the RE Cycle

Shiyan, to elaborate on Ben's message, Phoenix is in the top 3 in rent growth, population growth, and job growth. No market can compete on those fundamentals. It's also a lot easier to underwrite operating expenses in Phoenix. A big variable is usually property taxes. However, we have a law here that limits your tax increase per year to 5% (there are some other items that can trigger an exception, but they're easy to avoid). So we just underwrite a 5% increase every year and call it a day. Lastly, proximity. Ben and I both live in Phoenix MSA. I can get to any of our properties in 25 minutes. We know the submarkets well and can fine tune our underwriting moreso than someone across the country.
To summarize:
1. Phoenix is #1 in multifamily fundamentals
2. Limitation on property tax increases
3. Proximity for us

Thanks for sharing, Sam. Proximity to hot market is a big advantage IMO. Just curious what would you do if you live in a pricy and not so well market. Would you choose long distance?

You couldn't get me to buy in CA if you put a gun to my head...

Now, Benjamin. I'm sure you'd choose to live in that scenario.

Samuel, this is why we don't place
investor capital in CA.

Correct. But gun to your head, you're buying real estate in CA.

Fine, but if I have to buy in California I'm going to El Centro!
0 Reply
Ben Leybovich
OP
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
6y
Originally posted by @Michael Ealy:
Originally posted by @Sam Grooms:
we just got the reporting for December. Income is up $15K over November. November was up $15K over October.
As for the renovation, we added a new ramada/bbq area, added a dogpark, the playground is going in now, they just finished painting the property last week, and plans for the new office/gym have been submitted to the city and we expect to start that project the first week of March.
About two months ago, we took over the interior renovations from a third-party and hired our own crew. Our renovations are averaging 30 days, while the third-party was double that, with some units getting up to 90 days. Cutting down on that vacancy is a big reason for the increases in November and December.
We also cleaned house when we took over and evicted quite a few people. Sure it hurts for a month or two when you see income going down, but you have to believe in the plan and process. Having better tenants in there has also contributed to the increases in November and December.
We haven't even sent this to our partners/investors yet, but here's a graph of the income since we took over.

This is awesome Sam and Ben and congrats!
Some people here on BP might say "That's too good to be true" but I can see why your numbers have increased like that.
Vertical integration works. It's only through vertical integration that we are able to have renovation costs 50% (or more) cheaper than our competition and yes, we get it done faster as well.

Michael, it's not even the upfront cost so much. It's the economic loss that we used to have that we don't have any more.
Third party would take 60 days if not more to renovate each unit. At $1,000 of rent, that is a lot of economic vacancy.
If we push it, if absolutely necessary we're able to turn a complete unit renovation over to the manager in 3 weeks. Typically we do one month turn around.
It is a lot easier to stack GSI when we're able to have this good efficiency!
0 Reply
Matt Ward
Specialist · San Francisco Bay Area · Member since 2018 · 221 posts · 160 votes
6y
Originally posted by @Ben Leybovich:
Originally posted by @Michael Ealy:
Originally posted by @Sam Grooms:
we just got the reporting for December. Income is up $15K over November. November was up $15K over October.
As for the renovation, we added a new ramada/bbq area, added a dogpark, the playground is going in now, they just finished painting the property last week, and plans for the new office/gym have been submitted to the city and we expect to start that project the first week of March.
About two months ago, we took over the interior renovations from a third-party and hired our own crew. Our renovations are averaging 30 days, while the third-party was double that, with some units getting up to 90 days. Cutting down on that vacancy is a big reason for the increases in November and December.
We also cleaned house when we took over and evicted quite a few people. Sure it hurts for a month or two when you see income going down, but you have to believe in the plan and process.  Having better tenants in there has also contributed to the increases in November and December.
We haven't even sent this to our partners/investors yet, but here's a graph of the income since we took over.

This is awesome Sam and Ben and congrats!
Some people here on BP might say "That's too good to be true" but I can see why your numbers have increased like that.
Vertical integration works. It's only through vertical integration that we are able to have renovation costs 50% (or more) cheaper than our competition and yes, we get it done faster as well.

Michael, it's not even the upfront cost so much. It's the economic loss that we used to have that we don't have any more.
Third party would take 60 days if not more to renovate each unit. At $1,000 of rent, that is a lot of economic vacancy.
If we push it, if absolutely necessary we're able to turn a complete unit renovation over to the manager in 3 weeks. Typically we do one month turn around.
It is a lot easier to stack GSI when we're able to have this good efficiency!

I suppose that is a factor of how bad your original third party was to begin with. I have vendors that turn 800sft unit in 10-14 days - full scope. I agree, though, vertical integration is the way to go if you have the scale.  Nice work.

0 Reply
Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
6y
@Ben Leybovich congratulations. Phoenix is a hot market (pun intended). Hope this goes great for you and your partners.
0 Reply
Ben Leybovich
OP
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
6y
Originally posted by @Matt Ward:
Originally posted by @Ben Leybovich:
Originally posted by @Michael Ealy:
Originally posted by @Sam Grooms:
we just got the reporting for December. Income is up $15K over November. November was up $15K over October.
As for the renovation, we added a new ramada/bbq area, added a dogpark, the playground is going in now, they just finished painting the property last week, and plans for the new office/gym have been submitted to the city and we expect to start that project the first week of March.
About two months ago, we took over the interior renovations from a third-party and hired our own crew. Our renovations are averaging 30 days, while the third-party was double that, with some units getting up to 90 days. Cutting down on that vacancy is a big reason for the increases in November and December.
We also cleaned house when we took over and evicted quite a few people. Sure it hurts for a month or two when you see income going down, but you have to believe in the plan and process.  Having better tenants in there has also contributed to the increases in November and December.
We haven't even sent this to our partners/investors yet, but here's a graph of the income since we took over.

This is awesome Sam and Ben and congrats!
Some people here on BP might say "That's too good to be true" but I can see why your numbers have increased like that.
Vertical integration works. It's only through vertical integration that we are able to have renovation costs 50% (or more) cheaper than our competition and yes, we get it done faster as well.

Michael, it's not even the upfront cost so much. It's the economic loss that we used to have that we don't have any more.
Third party would take 60 days if not more to renovate each unit. At $1,000 of rent, that is a lot of economic vacancy.
If we push it, if absolutely necessary we're able to turn a complete unit renovation over to the manager in 3 weeks. Typically we do one month turn around.
It is a lot easier to stack GSI when we're able to have this good efficiency!

I suppose that is a factor of how bad your original third party was to begin with. I have vendors that turn 800sft unit in 10-14 days - full scope. I agree, though, vertical integration is the way to go if you have the scale.  Nice work.

WOW! That's impressive. Maybe I can get to know your vendors!
What's your average cost on an 800 sq.ft. unit? We gut and then install new cabinets, granite, etc. They must be able to do 30-40 per month.
What cost do you typically see, Matt?

0 Reply
Matt Ward
Specialist · San Francisco Bay Area · Member since 2018 · 221 posts · 160 votes
6y
Originally posted by @Ben Leybovich:
Originally posted by @Matt Ward:
Originally posted by @Ben Leybovich:
Originally posted by @Michael Ealy:
Originally posted by @Sam Grooms:
we just got the reporting for December. Income is up $15K over November. November was up $15K over October.
As for the renovation, we added a new ramada/bbq area, added a dogpark, the playground is going in now, they just finished painting the property last week, and plans for the new office/gym have been submitted to the city and we expect to start that project the first week of March.
About two months ago, we took over the interior renovations from a third-party and hired our own crew. Our renovations are averaging 30 days, while the third-party was double that, with some units getting up to 90 days. Cutting down on that vacancy is a big reason for the increases in November and December.
We also cleaned house when we took over and evicted quite a few people. Sure it hurts for a month or two when you see income going down, but you have to believe in the plan and process.  Having better tenants in there has also contributed to the increases in November and December.
We haven't even sent this to our partners/investors yet, but here's a graph of the income since we took over.

This is awesome Sam and Ben and congrats!
Some people here on BP might say "That's too good to be true" but I can see why your numbers have increased like that.
Vertical integration works. It's only through vertical integration that we are able to have renovation costs 50% (or more) cheaper than our competition and yes, we get it done faster as well.

Michael, it's not even the upfront cost so much. It's the economic loss that we used to have that we don't have any more.
Third party would take 60 days if not more to renovate each unit. At $1,000 of rent, that is a lot of economic vacancy.
If we push it, if absolutely necessary we're able to turn a complete unit renovation over to the manager in 3 weeks. Typically we do one month turn around.
It is a lot easier to stack GSI when we're able to have this good efficiency!

I suppose that is a factor of how bad your original third party was to begin with. I have vendors that turn 800sft unit in 10-14 days - full scope. I agree, though, vertical integration is the way to go if you have the scale.  Nice work.

WOW! That's impressive. Maybe I can get to know your vendors!
What's your average cost on an 800 sq.ft. unit? We gut and then install new cabinets, granite, etc. They must be able to do 30-40 per month.
What cost do you typically see, Matt?

Thanks, ya we've been lucky. Definitely needed to weed out some "sub-par" contractors before we established good processes, but now it seems to be a pretty well oiled setup. We are roughly in $10k-$15k per unit. We almost always do a top to bottom, so the range is a result of a few things: keeping cabinets or getting new ones, new or old appliances, refinish or new counters, 1 or 2 bedroom. The gut, clean, paint, and new floors (click in) are all pretty much the same. We do approach 21 days if we aren't able to time the cabinet and counter guys accordingly, but we've got a proactive PM who generally has a good pulse on upcoming vacancy. The palet stays the same and we rarely ever do anything structural.
Congrats on your successes so far, will enjoy following your progress.

0 Reply
Ben Leybovich
OP
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
6y
Originally posted by @Matt Ward:
Originally posted by @Ben Leybovich:
Originally posted by @Matt Ward:
Originally posted by @Ben Leybovich:
Originally posted by @Michael Ealy:
Originally posted by @Sam Grooms:
we just got the reporting for December. Income is up $15K over November. November was up $15K over October.
As for the renovation, we added a new ramada/bbq area, added a dogpark, the playground is going in now, they just finished painting the property last week, and plans for the new office/gym have been submitted to the city and we expect to start that project the first week of March.
About two months ago, we took over the interior renovations from a third-party and hired our own crew. Our renovations are averaging 30 days, while the third-party was double that, with some units getting up to 90 days. Cutting down on that vacancy is a big reason for the increases in November and December.
We also cleaned house when we took over and evicted quite a few people. Sure it hurts for a month or two when you see income going down, but you have to believe in the plan and process.  Having better tenants in there has also contributed to the increases in November and December.
We haven't even sent this to our partners/investors yet, but here's a graph of the income since we took over.

This is awesome Sam and Ben and congrats!
Some people here on BP might say "That's too good to be true" but I can see why your numbers have increased like that.
Vertical integration works. It's only through vertical integration that we are able to have renovation costs 50% (or more) cheaper than our competition and yes, we get it done faster as well.

Michael, it's not even the upfront cost so much. It's the economic loss that we used to have that we don't have any more.
Third party would take 60 days if not more to renovate each unit. At $1,000 of rent, that is a lot of economic vacancy.
If we push it, if absolutely necessary we're able to turn a complete unit renovation over to the manager in 3 weeks. Typically we do one month turn around.
It is a lot easier to stack GSI when we're able to have this good efficiency!

I suppose that is a factor of how bad your original third party was to begin with. I have vendors that turn 800sft unit in 10-14 days - full scope. I agree, though, vertical integration is the way to go if you have the scale.  Nice work.

WOW! That's impressive. Maybe I can get to know your vendors!
What's your average cost on an 800 sq.ft. unit? We gut and then install new cabinets, granite, etc. They must be able to do 30-40 per month.
What cost do you typically see, Matt?

Thanks, ya we've been lucky. Definitely needed to weed out some "sub-par" contractors before we established good processes, but now it seems to be a pretty well oiled setup. We are roughly in $10k-$15k per unit. We almost always do a top to bottom, so the range is a result of a few things: keeping cabinets or getting new ones, new or old appliances, refinish or new counters, 1 or 2 bedroom. The gut, clean, paint, and new floors (click in) are all pretty much the same. We do approach 21 days if we aren't able to time the cabinet and counter guys accordingly, but we've got a proactive PM who generally has a good pulse on upcoming vacancy. The palet stays the same and we rarely ever do anything structural.
Congrats on your successes so far, will enjoy following your progress.

Yeah, that's about right. Our range is a little lower as a function of vertical integration and perhaps volume, but the timing is about right. We run $9,000 - $12,000, but we install cabinets, do the demo, and the trim kits in-house. This is where we probably shave $2,000 - $3,000 on your pricing.
Good luck!

0 Reply
Matt Ward
Specialist · San Francisco Bay Area · Member since 2018 · 221 posts · 160 votes
6y
Originally posted by @Ben Leybovich:
Originally posted by @Matt Ward:
Originally posted by @Ben Leybovich:
Originally posted by @Matt Ward:
Originally posted by @Ben Leybovich:
Originally posted by @Michael Ealy:
Originally posted by @Sam Grooms:
we just got the reporting for December. Income is up $15K over November. November was up $15K over October.
As for the renovation, we added a new ramada/bbq area, added a dogpark, the playground is going in now, they just finished painting the property last week, and plans for the new office/gym have been submitted to the city and we expect to start that project the first week of March.
About two months ago, we took over the interior renovations from a third-party and hired our own crew. Our renovations are averaging 30 days, while the third-party was double that, with some units getting up to 90 days. Cutting down on that vacancy is a big reason for the increases in November and December.
We also cleaned house when we took over and evicted quite a few people. Sure it hurts for a month or two when you see income going down, but you have to believe in the plan and process.  Having better tenants in there has also contributed to the increases in November and December.
We haven't even sent this to our partners/investors yet, but here's a graph of the income since we took over.

This is awesome Sam and Ben and congrats!
Some people here on BP might say "That's too good to be true" but I can see why your numbers have increased like that.
Vertical integration works. It's only through vertical integration that we are able to have renovation costs 50% (or more) cheaper than our competition and yes, we get it done faster as well.

Michael, it's not even the upfront cost so much. It's the economic loss that we used to have that we don't have any more.
Third party would take 60 days if not more to renovate each unit. At $1,000 of rent, that is a lot of economic vacancy.
If we push it, if absolutely necessary we're able to turn a complete unit renovation over to the manager in 3 weeks. Typically we do one month turn around.
It is a lot easier to stack GSI when we're able to have this good efficiency!

I suppose that is a factor of how bad your original third party was to begin with. I have vendors that turn 800sft unit in 10-14 days - full scope. I agree, though, vertical integration is the way to go if you have the scale.  Nice work.

WOW! That's impressive. Maybe I can get to know your vendors!
What's your average cost on an 800 sq.ft. unit? We gut and then install new cabinets, granite, etc. They must be able to do 30-40 per month.
What cost do you typically see, Matt?

Thanks, ya we've been lucky. Definitely needed to weed out some "sub-par" contractors before we established good processes, but now it seems to be a pretty well oiled setup. We are roughly in $10k-$15k per unit. We almost always do a top to bottom, so the range is a result of a few things: keeping cabinets or getting new ones, new or old appliances, refinish or new counters, 1 or 2 bedroom. The gut, clean, paint, and new floors (click in) are all pretty much the same. We do approach 21 days if we aren't able to time the cabinet and counter guys accordingly, but we've got a proactive PM who generally has a good pulse on upcoming vacancy. The palet stays the same and we rarely ever do anything structural.
Congrats on your successes so far, will enjoy following your progress.

Yeah, that's about right. Our range is a little lower as a function of vertical integration and perhaps volume, but the timing is about right. We run $9,000 - $12,000, but we install cabinets, do the demo, and the trim kits in-house. This is where we probably shave $2,000 - $3,000 on your pricing.
Good luck!

Ya, can't argue that. I will say we are dealing with bay area pricing so that is a factor, as well as volume, but as I mentioned vertical integration is great if you can absorb it and sustain it long term.

1 Reply
Sam Grooms
Investor · Phoenix, AZ · Member since 2017 · 583 posts · 919 votes
6y
The prior renovation team was able to turn a unit in 14-21 days when we only had one property, and we only needed them to do 5 per month. It's when we bought another 400 units over the next year and asked them to do 25-30 per month that they got overwhelmed and weren't able to scale.

When you schedule to perfection (which is what 14 days is), you're going to have subs miss their installations or vendors miss a delivery, and now everyone down the line has to get pushed. The problem with that at scale is it impacts their businesses. Everyone that gets pushed won't trust you anymore and they'll double book you, or assume you can get pushed if they need to. (I should note that we do granite in every unit, and that's booked 14 days out, minimum. If we miss that date, its another 14 days to get it on the schedule).

We now schedule our renovation to be 21-30 days, depending on timing of when we're taking on units across all properties. Sure we could do it faster, but now we can leave a day or two of cushion between each sub and vendor delivery. No one has to ever get pushed back. They can rely on the dates I schedule them. They also make our scheduling a priority. And if one of our guys calls in sick, we're not screwed.
1 Reply
Ben Leybovich
OP
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
6y
A little status update on this project after 10 months.
Community Amenities
The buildout of the new office/gym is underway.
BBQ Area, Bark Park, Playground are done.
Interiors
36 units completed
10 currently under renovation
Forward ever, backward never!
2 Reply
Ben Leybovich
OP
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
4y
Well, it occurred to me that we hadn't acknowledged the sale of this property. @Sam Grooms - jump in if I omit something. and, feel free to reach out with questions and comments, folks.
Haven on Peoria was sold on 4/22/21. This was a 22-month hold. Som bullet-points below:
- Acquisition Price: $19,750,000
- Sale Price: $28,700,00
- Unit Count: 164
- Hold Period: 22 months
- Starting Revenue: $121,000
- Ending Revenue: $179,000
- Renovations Completed: 80 units + Office, Gym, Pool, Playground, Bark Park
- Return to Partners: 1.5x; 25% IRR
There was clearly more value-add left in the deal, but we'd hit our hurdles and thought it'd be better to move the equity into a property with more meat on the bone. One thing we never want to do is trade the market. In this case, as you can see in the image below, we'd reached an inflection point whereby the reward of finishing the repositioning wasn't enough to counter the risk of staying in longer. The remaining growth would have been much more linear. This is a very similar situation to Haven at South Mountain, which was discussed in this thread.
This was a great project for WhiteHaven but it was time to move on.
3 Reply
Nathan McIntire
Investor · Detroit, MI · Member since 2014 · 97 posts · 40 votes
4y
Congrats @Ben Leybovich and @Sam Grooms on going full cycle on this 164 unit! Great job.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.