As the New Year is now under way I wanted to share a quick update on OpenPath (aka My Next Google) and what’s ahead in 2017. Let’s start with a few numbers from 2016.
2016 OpenPath Stats:
- Total Costs of Properties Acquired: $109,221,900
- Equity Raised (all from individual investors): $37.9 Million
- Properties Acquired: 6
- Units Acquired: 977
- Exits: 2
Total OpenPath Stats:
- Properties currently under ownership: 17 (in 7 states)
- Total Units: 3,256
- Portfolio Value: ~$300m
- Smiles on working-class families created via Urban Village: Countless:)
Updated Performance Track Record
The 2016 transactions bring our total number of acquisitions to date to 25 with 8 sales. Across these 8 exits OpenPath investors have seen a 2.05X multiple on equity and a 33% IRR with an average hold period of 2.7 years. These numbers are significantly above our targeted 15% IRR. You can see an updated list of all of our properties and 10-year performance on this PDF.
What’s Ahead for 2017?
Macro trends in real estate continue to create opportunities for investors in apartments. Nationally, household formation continues to outpace housing construction. Shifts away from home ownership driven by a number of factors mean apartments nationally are in short supply, which in turn means growth in rents should continue to be strong. We don’t anticipate that the change in political administration will do anything to alter these base fundamentals. The potential of rising interest rates in 2017 will require that OpenPath continues to be highly disciplined in our acquiring decisions and conservative in how we model our projections but we still see considerable opportunity ahead. I expanded on this in an earlier post.
Net-Net: I expect that OpenPath will continue to deliver returns that outpace the stock market. (Of course, this is a projection and past performance is not an indicator of future results.) For me personally, when I compare the risk/reward of various investment options, I believe OpenPath’s multi-family real estate and social impact model offers the most compelling investment opportunity in 2017.
This year, I expect that we will acquire 5–7 new investment properties and raise ~$60M from existing and new investors. Currently, we are actively evaluating several new properties and we expect to have our first opportunities of 2017 shortly (in the next 2–8 weeks). As always, I will let you know when we get something under contract — and thanks for your patience!
Lastly, on a personal note, I am:
- trying to get my head around what’s happening in Washington, DC
- reading Chaos Monkeys, a tech insider’s raw view of Silicon Valley
- starting to plan a summer trip with extended family to Korea+Japan (if you’ve been to either, I’d love to hear your insights)
- still feeling the inspiration of the new year to pursue my resolutions and do some good:)
What are you up to? I’m looking forward to a great 2017 and the opportunity to work together. Let’s catch-up soon. In the meantime, don’t hesitate to reach out if you have questions or would like to learn more. firstname.lastname@example.org
Talk soon, DS
Note: OpenPath investment opportunities are for accredited investors. I am not a CPA or professional financial advisor. All opinions are my own. I encourage you to consult your accountant to fully understand your individual tax situation.