LOS ANGELES—Gelt Inc. is expanding into new frontiers. The Los Angeles-based multifamily investor recently made its first acquisition in Salt Lake City, a market where they plan to buy an additional 750 to 1,500 more units, and is rolling out a new leasing platform called Domuso.com that allows landlords to reserve rental units without a cashier’s check or money order. To hear more about these changes, the company’s strategy in the multifamily space and what is next, we sat down with principal Keith Wasserman. Here is what he told us about the company and its new ventures:
GlobeSt.com: Tell me about Gelt's current investment strategy?
Keith Wasserman: We acquire apartment communities that are 100 units and larger in size in A and B areas in the Southwestern, Northwestern, and Western United States. Number one on our investment location list is Salt Lake City. We recently acquired our first property there this September for $25.5 million. It was a 247-unit apartment community in a solid B area. We always try to acquire value-add opportunities whether they are mismanaged assets, properties that have deferred maintenance, or properties that were over-leveraged and not taken care of by the previous ownership. We have acquired properties from a diversity of sellers including national REITs, insurance companies, Auction.com, and smaller apartment investment companies.
We are pleased to note that every deal we have entered into contract on we have successfully closed. This is largely because we do not rely on any institutional capital sources, enabling us to be quick and nimble in making decisions and closing escrow in a timely manner. Since our inception in 2008, we have acquired over 3,100 apartment units valued in excess of $250 million with a stable of over 150 individual investors that are friends, family, and friends of friends. This investor base is also growing organically now through word-of-mouth.
GlobeSt.com: In which markets are you currently finding the best opportunities?
Wasserman: We first started acquiring apartment communities in 2009 and 2010 in the Bakersfield area. We then moved on to Phoenix and acquired approximately 2,000 units from 2011 to 2014 there. We are now sellers in Phoenix and in Bakersfield and believe that the best opportunities are currently in Salt Lake City, Denver, Portland, Seattle, Reno, and Southern California.
GlobeSt.com: You recently entered the Utah market, and are looking to keep expanding there. What is your interest in the Utah market specifically, and how does it fit into your broader investment goals?
Wasserman: We are interested in acquiring 750 to 1,500 more units in Salt Lake City over the next few years. Compared to Phoenix, which has seen huge swings in the local market, Salt Lake City has been relatively stable historically and we see that continuing into the future. We are committed to long-term holds there and are subsequently locking in long-term, fixed-rate debt.
GlobeSt.com: In addition to real estate investments, you also developed a leasing platform. Tell me about this platform and how it helps the leasing process. Do you use it for all of your properties?
Wasserman: We are excited about the launch of our real estate tech startup Domuso.com. Domuso offers multifamily properties a free online platform that eliminates the need for a traditional cashier’s check or money order to reserve a rental unit. Our proprietary system secures online reservations using a credit or debit card authorization, allowing leasing teams to close prospect leads faster and easier. Properties using Domuso capture first impression positive ratings and reviews as well as referral leads through our payment checkout process. Residents can also schedule automatic online recurring and roommate group rental payments. Domuso is currently running on all of Gelt's properties and we also have partnerships with large property management firms comprising more than 40,000 rental units. We strive to stay on top of industry trends, and are always on the lookout for new technologies that simplify renters’ lives, ensure timely payments for managers, and help properties run more efficiently overall.
GlobeSt.com: What is the firm's interest in developing new technology for the CRE space?
Wasserman: CRE has embraced technology, most notably in the form of online crowdfunding platforms operated by third parties to reach the masses and raise capital. Rather than post our investments on a third-party website, we decided to develop an internal crowdfunding platform to reward our investors with an exclusive look at our newest offerings. The website is being developed to keep these investors informed and to provide them with every opportunity to invest in the next, successful Gelt deal with the click of a button.
GlobeSt.com: What are your goals over the next year?
Wasserman: Our goals over the next year are to continue to acquire apartment communities as well as break into the mobile home park space. We have been actively seeking to acquire four- or five-star parks in the same locations we seek apartment properties. We are looking for parks with little to no park-owned homes, and parks that are well located in close proximity to major employers, shopping, and service businesses. We also prefer parks with nice amenities – or the ability to add amenities, as well as 55+ properties.