LOCATION
Kyle, TX (25 min south of Austin)
SITE COUNT
151 lots
ACQUIRED
October 2025
BASIS
Below replacement cost
Performance Highlights
Exceeding underwriting expectations through operational excellence.
56% → 76%
LEASE-UP VELOCITY
First three months
520 bps below
EXPENSE RATIO VS UW
45.0% actual vs 50.2% underwriting
On track at 76% occ
YEAR 1 NOI VS UW
Full Year 1 target hit pre-stabilization
DEAL STRUCTURE
A creative capital structure that preserved an existing lender relationship
Rather than seller financing, Coltcam assumed the sellers' existing senior debt and paid down the loan to target leverage. The sellers stayed in a preferred equity position that functions like a seller-financed second. The structure got the deal to underwriting leverage without disturbing the existing lender relationship.
The Acquisition
Closed October 2025 in Kyle, approximately 25 minutes south of Austin on the I-35 corridor. The sellers were a group of five successful business owners who had built the 151-lot property ground up. Their all-in development cost was meaningfully higher than the basis Coltcam was able to acquire at, putting the property well below replacement cost on day one. The capital structure was creative: rather than seller financing, Coltcam assumed the sellers' existing senior debt and paid down the loan to target leverage, with the sellers staying in a preferred equity position that functions like a seller-financed second. This structure got the deal to underwriting leverage without disturbing the existing lender relationship.
The Work
The biggest changes were on the expense line. Payroll dropped from approximately $14,000 per month to $5,500 per month through three moves: bringing in work campers compensated through reduced rent plus a smaller pay grade, moving all remaining staff from W2 to 1099 to eliminate payroll tax leakage, and cutting unnecessary positions the prior owners had treated like an apartment complex back office. The property now runs with one manager, one weekend coverage manager, one maintenance lead, and one maintenance helper. Roughly 15% of inherited vendors were cut, including unnecessary phone monitoring and other recurring subscriptions, and the on-site store was shut down after the trailing 12-month financials showed it was losing money. Coltcam also rolled out the integrated merchant services program, passing all credit card processing fees through to tenants from day one, which lifted revenue by approximately $5,000 per month. No capital improvements were required. The thesis was operational, not capital-improvement driven.
The Outcome
Six months into the hold, occupancy climbed from 56% to 76% in three months, monthly gross income grew 30% from January to March 2026, and the expense ratio is running at 45.0% against an underwritten 50.2%. NOI is already matching the full Year 1 underwriting target at only 76% occupancy. The trajectory points to 80% plus occupancy by year-end, which will materially exceed Year 1 projections. The property is in lease-up phase, so investor distributions are on hold while cash reserves stabilize.
INVESTOR SNAPSHOT
EQUITY RAISE
$3.96M
UW IRR
17.4%
UW EQUITY MULTIPLE
1.84x
HOLD PERIOD
4 Years
WHAT'S NEXT
On the horizon
Distributions are projected to begin once stabilized occupancy is sustained for two consecutive quarters. The expense outperformance is expected to compound as gross income scales, widening the NOI gap to underwriting through Year 2.
PARTNER WITH COLTCAM
Invest in our next acquisition
Coltcam Capital is actively identifying and underwriting new off-market opportunities across the Texas Triangle. Gain exposure to institutional-grade returns in a recession-resistant asset class.
