Q1 2025 Fund Update: Closing in on the Finish Line
Holy moly, what a winter.
It's nearing 11am and I'm coming up on 25 hours of being awake. Despite my best effort, it seems like the universe still conspires to cram calls, asks, and emergencies right before I head to Asia for a month. That said, taking a moment to read the last 5 quarters of excerpts has an instant effect of grounding me in the ~18 months that brought us here:
| Publish Date | Title | Excerpt |
|---|---|---|
| Dec-23 | Announcing: Courtyard Sihe Partners, Fund 1 | Introducing Courtyard Sihe Partners Fund 1, and the journey that it took to launch it. |
| Feb-24 | CSP Winter Update: Furnaces, Financing, and Evictions | Four furnaces, many emails about financing, and updates on tenants in Folsom. |
| May-24 | Spring 2024 Fund Update: Growth & Growing Pains | Demand for the fund has surpassed expectations and we are growing. As such, we are very much facing the usual growing pains and learning to implement new workflows to improve outcomes. |
| Jul-24 | Q2 2024 Fund Update: Rebuilding the Team | As spring turns to summer, heat from the fund turns up. Renovations are completed, teams are rebuilt, and a summer intern joins for the season. |
| Oct-24 | Q3 2024 Fund Update: First Rental Success, At Last! | This quarter we finished our first Cleveland rental, finally. Looking back on things learned this quarter, the goal is to eye if we can accelerate turnovers on the remaining units. |
| Jan-25 | Q4 2024 Fund Update: Two More Units Rented, Scaling & Annual Review | Closing out on a challenging but successful year. We switched out the entire team, renovated and rented 3 apartments, and are poised to scale further in 2025. |
| Apr-25 | Q1 2025 Fund Update: Closing in on the Finish Line | Against the backdrop of exceptional tumult in America, we emerge from winter battered but not beaten. With all three sides of the triad working together: PM, VA, and GP, we take pause to consider what moment in history we're living in. |
Mission Statement
Courtyard Sihe Partners renovates multifamily apartments in historic American cities like Cleveland, OH, to provide quality, affordable housing.
Get ready, this update is a substantial one.
Highlights
- Deploying EOS Across the Portfolio: The biggest win across portfolio was deploying the entrepreneurial operating system (EOS) weekly scorecard across all 8 apartments. I started this process in October and completed the implementation in March, with my VA updating it and running weekly syncs.
- Team Collaboration: Property manager is entering month 8 working with us, virtual assistant month 7, myself month 15. Between biweekly syncs, tracking lease up and turns to the day, ongoing education, and more time working with each other, we are building our tribe and making connections.
- Anecdotally, I chuckled when I heard our real estate agent audibly gasp upon seeing the newly renovated photos from Folsom. Apparently, Cleveland has broken many investors! It's a healthy reminder that ability is sometimes marked by superior performance, and sometimes by superior consistency.
- Cleaning House, Completing Turns: Our property manager continues to deliver. All non-paying tenants have moved on and all apartments have been renovated. As spring arrives and both buildings near completion, we are actively strategizing what is the next best move for our investors.
- Vacancy Improvement: St. Clair leased up within 1-2 months of completing renovations, with the last tenant scheduled to move in next week. Folsom also has one more tenant scheduled to move in, and we are continuing to explore higher rental prices for the newly renovated 3bd/1ba's.
Lowlights
- Loss to Lease: Although we're leasing the apartments faster than before, the many weeks out in advance tenants request to move in causes the apartment to be vacant longer than ideal. We are still finding our balance between speed of filling the apartment and maximizing absolute price point.
- Timing of Capital Expenditure with Vacancy: Although it's good that we have finally repossessed all apartments so we can start making renovations, the double whammy of spending large amounts to renovate without income coming in is always two sensitive variables to balance.
- Deferred Patio Maintenance: This winter we discovered that the previous property manager neglected to forward structural concerns that the contractor brought up at the time, so the contractor got stuck and gave us incomplete work. Upon me deep diving, he did proactively take responsibility to fix things.
- Political Uncertainty: Against the national backdrop, the effects of uncertainty locally also causes ambiguity in the power dynamic between the city small investors and landlords. While this tension has always existed, the flux has everyone in a holding pattern to see when and how the dust will settle.
- Suboptimal Systems on the Vendor Side: At present, while we're tracking online guest cards and applications digitally, those numbers have to be manually pulled and reported by the property manager, causing delays and opacity, limiting our fine tune decision making to our PM's instinct.