SANTA ROSA -- Praxis Capital, the Santa Rosa-based real estate investment firm offering private placement funds to investors, has completed the acquisition of a 140-unit multifamily apartment development in Conroe, Texas, a suburb of Houston.
[caption id="attachment_78021" align="alignright" width="400"] Praxis will invest nearly $600,000 to upgrade the complex, which will generate rental income for investors before planned resale in five years.[/caption]
The acquisition of Whispering Oaks Apartments is the second multifamily purchase for Praxis in the state of Texas and the third for the firm, reflecting the company's current goal of investing in multifamily properties in areas that leaders at the firm say possess a high potential for rental demand due to rapid job and population growth.
Originally built in 1972, the six-acre development involves 20 buildings and a variety of units: 36 one-bedroom units, 86 two-bedroom units, 16 three-bedroom units and two four-bedroom units. Sizes range from 640 to 1,600 square feet, with rent ranging from $599 to $1,050 per month.
The company did not disclose the price paid for the complex, and noted that the property was not previously marketed for sale.
Praxis announced plans to invest more than $588,000 -- $4,200 per unit -- into renovations. Exterior work has already begun, with plans for landscaping work, parking lot improvements, swimming pool upgrades, roof replacement and interior improvements like appliance and flooring upgrades, said Brian Burke, a principal at the firm.
"Our first objective is to improve the curb appeal, followed immediately with interior upgrades," Mr. Burke said.
[caption id="attachment_78022" align="alignleft" width="360"] Praxis capital acquired the 140-unit Whispering Oaks Apartments in Texas. (Photo credit: Praxis Capital)[/caption]
Though Praxis generally plans to hold its rental properties for five years -- generating steady rental income for investors before the ultimate resale of the property -- the company's previous 54-unit multifamily property in Texas was sold in only two years. That property generated an annualized return for investors of nearly 43 percent when sold.
While ultimately subject to market conditions, the firm expects returns "in the mid- to high teens" for investors when the property is resold, Mr. Burke told the North Bay Business Journal.
Praxis opened an office in Austin, Texas this year, giving it a physical footprint in a region that leaders at the firm said was likely to remain a strong focus in the future.
It is the third office for the firm, which also has an office in Sacramento and launched in Santa Rosa in 2009.
The firm launched as a vehicle for investors to participate in a fervent market for the profitable resale of renovated homes purchased at a deep discount -- a practice known as "flipping." The approach, focusing on Northern California, has come to focus on more serious home improvements in recent years. The firm also invests in single-family rental properties, largely in Southern California.