Rodney Rosenstein runs Helpful Housing, a non-profit organization that offers affordable housing solutions. After their remarkable success in California, they decided to venture into the Arizona market.
They found two suitable properties in Tucson, AZ that they could acquire and turn into affordable living spaces: a 75-unit multifamily complex with a square footage of 67,938, and, across the street, another 124-unit multifamily complex with a square footage of 117,610.
Rodney was new to the Arizona market and so was his broker, who was from a Santa Monica firm and didn’t know who to approach for a fix and flip loan. They were also unfamiliar with paperwork concerning property dealings in Arizona.
After being turned down by multiple traditional banks, they considered private real estate lending, and turned to Colonial. We assessed Rodney’s financial statements in detail and found his project very promising. We gave him a $7,200,000 hard money loan and helped him through the paperwork and underwriting.
As soon as the renovation was complete, the units were leased out and Rodney refinanced the loan with a regular bank.
Affordable Housing Solutions: the need of the hour
Affordable housing solutions are garnering attention in large cities across the world. Many urban dwellers spend more than half of their income on rent, and often on homes that are congested and poorly equipped. Arizona is no different.
Rodney Rosenstein is the founder of Helpful Housing, a 501(c)(3) nonprofit public benefit corporation. After recognizing the growing housing crisis in Long Beach, Rodney decided to step in with a strategic solution. The idea was to acquire suitable residential complexes in Long Beach, renovate the units to meet the demands of families of different sizes, and lease them out to deserving families at an affordable price.
Affordable housing is defined as housing that charges no more than 30 percent of gross income for housing costs, including utilities. Helpful Housing owns and operates over 320 residential housing units in California.
The corporation’s initial funds came from Rodney, the City of Long Beach, and the CA HUD HOME program.
As part of their branching out, Helpful Housing researched the housing conditions in different states in the US and found Arizona to be a suitable choice for their work. Although the cost of living in Arizona is comparatively lower than the national average, the cost of housing is a little on the higher side. The large influx of people to the state in recent years has steadily increased the demands for accommodation and the cost of the rent.
Rodney, along with his broker from a real-estate agency based in Santa Monica, went on the lookout for ideal properties in Arizona. By leveraging program partnerships with local and national subsidies, they were confident they could repeat their California success in the Arizona market.
A 75-unit multifamily complex (67,938 SF) and a 124-unit multifamily complex (117,610 SF) located in Tucson were perfect for their project. However, they didn’t know where to get started.
Colonial showed them the way
As Rodney didn’t have any prior experience in the Arizona market and he was running a non-profit organization, banks were hesitant to lend him a fix and flip loan. Rodney started looking for private real estate lenders in Arizona who provide hard money loans. That brought them to Colonial Capital.
Although we were impressed by the long-term vision of Helpful Housing from a social angle and wanted to play a part in their journey, we couldn’t make a decision until we learned about the project and went through both Rodney’s and Helpful Housing’s financial statements.
This is what we saw.
A project with great potential
We got together for a meeting and asked Rodney to share the project profile for the Arizona market. It sounded very promising to us. When we reached out to our real estate associates in Tucson to study the relevance and potential of affordable housing in the city, they were also optimistic. Affordable housing solutions will cater to the large demand for workforce housing in Tucson. The properties in question were priced close to their market value and the projected rents after renovation were reasonable compared to other residential complexes in Tucson.
Proven track record
Helpful Housing was a huge success in Long Beach. One of the major factors that contributed to the overwhelming reception of the project was the well-coordinated project execution under Rodney’s supervision. Helpful Housing is careful to conduct market studies beforehand and map out judicious action plans for the smooth implementation of the project. Rodney had come to Arizona to draft a similar one for the new project.
Perfect credit profile
Moreover, Rodney’s track record allowed us to see he’d be able to deliver his promises. His personal financial statements reflected steady net worth. He has been receiving a fixed salary from Helpful Housing every month. Although he had availed multiple loans from conventional and private lenders in Southern California, he also paid them back on time as per the agreements and had a solid credit score. Being asset-backed lenders, we took a look at his properties and their market values. His diverse portfolio included properties throughout the complex Southern California market.
We fuel new projects
Although Rodney was new to the Arizona real estate market, that wasn’t a hurdle in the way of his success. He was well equipped in terms of financial and strategic resources to launch the project successfully.
We granted him a custom $7,200,000 fix and flip loan at 9% interest. The maturity period was fixed at 18 months, during which time the renovation was to be completed and word of the project would reach prospective tenants through paid marketing in and around Tucson.
Once the residential complexes find tenants and the project has a stable source of income from rent, Rodney will refinance the loan with a traditional bank. Given the projected renovation was modest yet modern, we were positive the project would take off the way Helpful Housing intended to. And it did.
Helpful Housing is now home to 150+ families in Tucson.
New to the Arizona fix and flip market? Get started
If you are looking for a private lender in Tucson, you know where to head. We offer asset-backed custom fix and flip loans to potential clients. Reach out to us at (602) 224-0745, we will help you take your dive into the Arizona real estate market.