Enterprise Multifamily Opportunity Fund I, LLC

According to the National Housing Trust, for every new affordable home built in the United States, two are lost due to deterioration, abandonment or conversion to more expensive housing. At the same time, more than a quarter of renter households are spending more than 50% of their income for housing. The logical first step in stemming this growing affordability crisis is to preserve the existing inventory of affordable rental homes that has been built over the last 30-years.

The Enterprise Multifamily Opportunity Fund (the "Fund") has been formed to address the need for a new source of capital to preserve affordable and workforce rental housing. Enterprise believes that preservation can be achieved in a way that provides a risk adjusted return to investors while maintaining rents at levels that are affordable to working families, improving the assets’ physical condition to ensure long-term stability, reducing the environmental footprint of the property through green improvements, and helping to stimulate economic development in the surrounding community.

The Fund will invest equity in private affordable and workforce rental housing communities and is targeting a 10-12% net return to investors (including 7% on a current basis). The target capital raise is $50 million, which we estimate will allow for the preservation and improvement of 5,000 homes.

Financial description

The Fund anticipates investing in two segments of rental housing communities. The first will include existing affordable housing properties that were originally financed by the housing credit program or with Section 8 rental subsidies. There is a large inventory of properties built using these programs during the last 30+ years that are in need of new capital and professional management.
The second segment of apartment communities that the Fund will target are privately owned, unrestricted "B" and "C" class properties. These communities provide much of the rental housing that serves lower-income families and are subject to poor management and investor "flipping." Despite being unrestricted, these properties have rent levels that are typically affordable to working families and are critical to the diverse and thriving communities.
Investing in existing rental housing has several benefits over other real estate alternatives:
(a) Less market drive volatility because rents are typically lower than market rate competition;
(b) Fewer risks because there is little-to-no construction or lease-up risk;
(c) Predictable underwriting because there are years of proven cash flow; and
(d) Immediate return because investments will start to deliver cash distributions within months of acquisition.