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Sunday, 10 May 2015 22:00

GR developers seek $1M to turn dilapidated homes into rental units

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Real estate investor firm Clark Brothers Capital Corp. plans to buy up to 20 blighted properties in the greater Grand Rapids area over the next year and turn them into rental housing.

The company seeks to raise up to $1 million from accredited investors to acquire the properties, according to a recent filing with federal securities regulators.

“We are trying to buy dumpy houses and turn them into gems,” John Clark, president and chairman at Clark Brothers, told MiBiz.

While the company has raised just a fraction of its goal — $15,000 as of mid-April — Clark said the firm has already acquired two houses through the Kent County Land Bank.

Currently, the company owns eight properties, mostly located on the southeast side of Grand Rapids. While Clark Brothers Capital is the capital-raising entity, the properties are acquired, owned and managed by Grand Rapids-based Short South Realty Group Inc., where Clark is a partner.

“The southeast side (of Grand Rapids) has been our bread and butter,” said Clark Brothers’ Director David Clark. “A lot of these neighborhoods are sort of up-and-coming and looking to turn the corner.”

Seven of the company’s existing portfolio properties are single-family homes and one offers multifamily housing, according to the company’s website. The company also says it has developed and managed apartments in Muskegon, Kalamazoo, Grand Haven and East Lansing.

The timing of the investment comes as Grand Rapids continues to need more affordable, quality housing, as MiBiz previously reported. According to a March report by real estate research firm Zillow, the city has the lowest vacancy rate in the nation at 1.6 percent. As a result, developers have planned to add at least 1,452 apartment units at 22 sites across the city.

According to an investor memo posted on Clark Brothers Capital’s website, many of the company’s existing properties are three-bedroom houses that rent in the range of $700 to $800 per month.

The partners have been paying as little as $9,000 for some of the homes and are comfortable spending up to $50,000 renovating each property, David Clark said.

“Grand Rapids is great (for investors),” he said. 

Read 4218 times Last modified on Sunday, 10 May 2015 21:04

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