The Equity Residences management team has always believed that delivering value to investors starts with acquiring the right vacation homes, in the right locations, at the right time, at the right prices. Sometimes they buy these homes, like the Mauna Lani Resort Villas in Hawaii or the North Star Resort home in the California’s Lake Tahoe area, directly from developers at pre-construction prices. These homes require no upgrades and are ready for investors as soon as they are purchased.
Other times, the Equity Residences team finds diamonds in the rough that require extensive upgrades and remodels before investors can enjoy their first vacation experience. Equity Residences’ first fund, the Equity Villa Fund, took advantage of short sales and foreclosures after the 2008 financial crisis, acquiring well-located but neglected homes for cents on the dollar. These residences were then transformed into luxury accommodations for investors, creating millions of dollars of equity prior to occupancy.
Equity Platinum Fund 2 is the third and newest fund created and operated by the Equity Residences team. The value of the Platinum Fund 2 homes range between $2m and $5m and the management team intends to buy luxury homes that generally require minimal upgrades. However, Equity Residences has many years of experience in growing investor value through remodels and renovations when appropriate. Consequently, it will purchase some homes in need of "TLC" that will generate higher rental income and resale value after a thoughtful remodel. Three current remodels that are under way for this newest fund are covered below:
Anguilla: Adding Indoor Living Space
The recent acquisition of a villa on the Caribbean island of Anguilla is an example of enhancing home values with a calculated remodeling.
The five-bedroom CeBlue villa on Crocus Bay features spectacular sunset views and close proximity to a beautiful beach, complete with a restaurant, bar and water activities center. Central to the three upper-level bedrooms and kitchen was an outdoor living area with plunge pool. The villa had an enviable history of high rental rates and ratings but, curiously, it generated little interest when it was listed for sale. The Equity Residences directors concluded that the lack of an air-conditioned indoor living room was the reason affluent families were happy to vacation there for a week, but did not consider it to be a vacation “home.” Thus, the purchase price was sufficiently below market comps to justify a major addition - a “real” living room.
The challenging makeover involves removing the existing plunge pool behind the outdoor furniture and patio and the installation of a roof structure and front wall with expansive windows to maximize the beautiful views. The new air-conditioned living room will adjoin the existing kitchen, retain the existing water feature, and look over a new, larger, private pool and patio area to the Caribbean Sea below. The existing lower level media room is being converted to a sixth bedroom and an updated HVAC system is also being added. The result will be an elegant, tropical villa that comfortably accommodates large families who will relax in luxury, even in the most inclement weather.
Thompson Cove, Turks and Caicos: A Complete Remodel with a Stylish Interior Facelift
On Thompson Cove, in the increasingly popular Turks and Caicos, Equity Platinum Fund 2 is currently engaged in an extensive renovation of another recently purchased house. The residence was very “tired” and attractively priced because of that. The justification for purchase was that the home commands a magnificent location, just steps from a beautiful stretch of white-sand beach. The renovation will incorporate functionality and contemporary luxury. This includes updating the bedrooms and integrating local furniture and art to enhance the interiors. New cabinetry and countertops are being installed, along with modern doors, windows, and state-of-the-art kitchen appliances and furniture.
As the renovation progresses, the property is being transformed into a space that is not only aesthetically pleasing but also equipped with high-quality amenities and furnishings suitable for modern and sophisticated tastes. The house and its refreshed decor and locally sourced artwork will create an inviting and contemporary atmosphere. And, of course, beachfront is where everyone wants to be.
Barcelona: A Redesigned Apartment for Enhanced Guest Experience
The growth of Equity Residences and its portfolio of luxury homes and the choice of locations has been heavily influenced by the wishes of its investors. The managers say investors have repeatedly expressed a desire for a home in Barcelona, Spain. Consequently, Equity Residences is currently engaged in redesigning the interior of a luxurious historic apartment to enhance the investor and guest experience. The goal is to create more open and inviting spaces. A key aspect of this ongoing project is the expansion of the kitchen and living areas, making them more spacious for socializing and relaxation.
Additionally, the renovation involves a special focus on two of the bedrooms, outfitting them with walk-in bathrooms for increased privacy. Equity Residences says these modifications will not only improve the apartment's visual appeal but also significantly boost its comfort, functionality and value. Overall, it will ensure a more fulfilling vacation experience for all the investors who can enjoy this charming residence ensconced in a world-class destination.
Focusing on Generating Investor Returns
A major contributor to the growth of the Equity Residences funds is its expertise in renovations that deliver increased equity and higher rental rates. Equity Residences says that while finding the perfect house in the perfect location for the right price is challenging, their team can create investor value through carefully designed remodels and renovations. The current investment in the Equity Platinum Fund 2 starts at $218,500 which provides 1 to 3 weeks of usage.
