Cambridge Village Apartments

Foreclosure Sale, Asymmetric Risk, Learning New Submarket, Significantly Below Replacement Costs, Leveraged HUD Relationships, Strong Operations/Management, HUD Grants and Cash-Out Refinancings.

Cambridge Village Apartments (the “Property”) was a distressed HUD mortgaged project that was purchased via a foreclosure sale. Mark Barineau was the GP at RMI that led the Property’s acquisition, rehab, asset management and property management. The Property was later owned/operated by Lionsmark leading up to the sale.

Acquired through a verbal auction, the Property was in need of a significant renovation and was upgraded into a B-class apartment complex, generating a 39.7% Gross IRR and a 29.0 EMx over 23 years.

Mark led several significant value-add rehab projects over the years that included a complete overhaul including mechanical systems, interior renovations, new windows and flat roofs.

After a successful initial rehab, RMI effectuated a cash-out refinancing returning all their investor’s capital ($800K) after one year. RMI refinanced the property twice during their ownership.

The Property was part of a HUD foreclosure program known to the principals of RMI as they had built a portfolio comprised of mainly foreclosed HUD assets.

True to form, RMI successfully won the verbal auction and moved quickly to close on the Property in ~90 days.

RMI structured the transaction to reduce downside exposure and create an asymmetric risk profile, acquiring this Property in distress for significantly below replacement cost at $4.2M (~$14K per unit).

After two refinancings and a HUD weatherization grant, Mark brought this Property under the Lionsmark umbrella as part of his RMI GP buyout in 2016.

At the height of COVID-19 in 2021, Lionsmark sold this property for $24M (~$79K per unit). Over the course of the hold-period, over $23M of capital distributions were returned to investors.