Mortgage Recovery Fund-Village Glen, Ltd. aka University Heights
Apartments
Austin, Texas
The Shopoff Group acquired a defaulted second mortgage at a substantial discount.
This loan was collateralized by a 360-unit apartment complex located in Austin,
Texas. Upon acquisition of the loan we began to execute our business plan,
which for this asset involved collecting the loan from the current property
owner or pursuing a foreclosure action. In addition, our team had to assess
the value of the underlying collateral and negotiate with the first lien
holder.
The borrower had previously placed the property in bankruptcy, but had not fulfilled the terms and conditions of his Chapter 11 Reorganization Plan. Once our team took control of the loan, we made demand on the borrower who was not able to make payments. We therefore initiated a foreclosure action which resulted in a settlement with the borrower. As a result, The Shopoff Group was able to assume ownership of the property within 90 days of acquisition of the defaulted second lien.
Immediately after acquiring ownership of the property, our team began to stabilize the operations of the property. Village Glen had a tough reputation, was experiencing very poor occupancy, and had several building code violations. We began to remedy the code violations and were diligent in our collection efforts with all delinquent residents. Initially the occupancy fell, but we were able to quickly stabilize the property making it attractive to long-term investors.
The foreclosure and subsequent management activities created substantial value for our investors, so we began our marketing effort. After one failed sale, we located a suitable purchaser who wanted to do a large-scale renovation on the Village Glen Apartments. We completed a sale of the property 10 months after we acquired the defaulted second loan. Through a precise and rapid execution of our business plan, we successfully completed this project and provided returns above our initial pro forma, with our investors achieving an internal rate of return of 22.8%.
Investing in The Shopoff Group limited partnerships involves a high degree of risk,
including the possible complete loss of your investment. In addition to being an illiquid
investment with an uncertain liquidity date, these investments may have other risks.
The past performance of any of The Shopoff Group's Limited Partnerships is no guarantee of
future results.
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The Shopoff Group
Corporate Headquarters
114 Pacifica, Suite 245
Irvine, California 92618
Main: 949–417–1396
Fax: 949–417–1399