Hilltop Residential

hilltop residential

Firm Headquarters: Houston, Texas

Date Founded: 2016

www.livehilltop.com

This Page was Updated January 2020

Investment Approach

INVESTMENT THESIS

To acquire value-add ‘workforce housing’ where maximum renter demand exists in Texas, Florida, and Georgia. We pursue off market single properties and focus on underperforming, undervalued assets where we can add value. Our focus for our investors is on capital preservation, asset appreciation, and cash flow.

INVESTMENT OVERVIEW

Fund LP’s Net expected returns are 14-16% IRR, and 6-10% Annualized cash on cash returns. Our fund structure is a 25% promote over a 9% IRR. The promote/carried interest is calculated on the fund level, and we do not have a GP catch up.

Capital Raise Strategy

Strategy: Fund

Total Properties Under Management: 15 properties with a total of 4,145 units

Total Assets Under Management: TBD

Investments to Date: 15

Total Number of Investors: Fund II – 29, Fund III – 36, Fund IV- 100

Average Investment: TBD

% of Capital from Top 3 Investors: Less than 25%

Financial Reporting Frequency to Investors: Quarterly

Minimum Amount: Contact Hilltop Residential to discuss

Setup to accept charitable capital through the National Christian Foundation or other listing platforms? No, but we will be if we need to be. We are on Fidelity’s and Millennium Trusts’ platform, not faith based, but for RIA’s to invest with clients. David Wylie, Managing Partner, is a NCF client/customer, Hilltop would be if need be.

Focused Geographic Regions of Investment: 

  • Is all of your activity in the US? Yes.

    • Which states? Texas, Georgia, Florida.

  • What countries outside of the US are you active in? None.

Focused Industries of Investment:

  • Multi Family – Existing  

Company Differentiator:

Expertise in acquisitions, operations, capital markets, and dispositions (Greg Finch, CEO, has 20 years of experience as an owner/operator and David Wylie, Managing Partner, has 20 years of experience as a leading multifamily broker).

Investment Example:

  • The typical life cycle of a fund is 7 years. However, the term on our funds is 10 years, to leave some margin for market variables. 

  • Our current funds (Funds 2 and 3) are cash flowing between 5.5-6.5%, on an annualized basis. Both funds are still works in progress in terms of the value add, management turn around, and we expect them to stabilized in the 6-8% cash on cash range; potentially higher.

  • Expected net IRR = 14-16% for each of these funds. 

  • We acquire value add workforce housing multifamily assets across the southeastern USA. Hilltop defines workforce housing 1990’s and newer product where maximum renter demand exists (80% of tenants in our target markets rent between $700-$1400/month).  

  • We focus on off market opportunities (> 70% of our existing portfolio was purchased off market). We access this pipeline because of our track record, relationships, and experience in the industry.  

  • We seek both physical and management value add opportunities.   

  • Our spiritual integration on the property level consists mainly of our Apartment Life partnership. An Apartment Life team is planted on each community and they serve as missionaries with the staff and residents. 

Previous or Active Portfolio PROPERTIES:

  • Active Holdings: 15 properties with a total of 4,145 units

  • Previous Holdings: Hilltop started in 2016. Previous track record from 2000-2016 includes acquisition and operation of 100 assets, 25,000 units. 47 round trips averaging a 17.9% IRR with an average hold period of 6.7 years including 30 assets held through the 2008-09 financial crisis, and eventually sold with an average IRR of 14.8%

Leadership Team

  • Cumulative Leadership Experience in Accredited Investing: 31-50 years

Greg Finch | co-founder & managing partner

Greg Finch is a managing partner and co-founder of Hilltop Residential. In this role, Greg helps manage all aspects of investment and  management activities for Hilltop Residential, including deal sourcing, acquisition, financing, capital raising, asset management, and  investment management. Since Hilltop’s inception in 2016, Greg has overseen the acquisition, financing, and asset management of  3,546 units totaling $489 million.

Prior to forming Hilltop, Greg served for 16 years as President of Venterra Realty, a leading multifamily investment and management  firm active in Texas and the southeast United States.

At Venterra, Greg managed and lead the transaction group that completed over $4 billion in multifamily transactions. His team  purchased over 25,000 multifamily apartment units (>100 properties) located in Texas and the southeast United States. 

In 16 years, Greg led his team to complete 47 round trip transactions that produced a weighted average 17.9% IRR to investors. Over  50% of these assets were held through the financial crisis of 2008.

During his tenure at Venterra, Greg built extensive relationships with institutional lenders and equity providers such as Freddie Mac,  Fannie Mae, Bank of America, Met Life, Wells Fargo, JP Morgan, PPM, Hartford Life, Lincoln Life, 4086, PNC, GE, Lehman  Brothers, Thackeray Partners, Dome Equities, Canyon Johnson, Angelo Gordon, and Artemis Real Estate Partners.

Greg was also instrumental in developing Venterra into a world-class management company focused on delivering exceptional  customer service. At its peak the company employed over 500 real estate professionals. In 2015 Venterra was named to Fortune  Magazine’s Top 100 Great Places to Work for medium size companies and to Glassdoor.com’s Best Places to Work in 2016.

David Wiley | Co-founder & managing partner

David Wylie is a managing partner and co-founder of Hilltop Residential. In this role, David helps manage all aspects  of investment and management activities for Hilltop Residential, including deal sourcing, acquisition, financing, capital  raising, asset management, and investment management.

David has been in the multifamily investment business since 2000, having received nationwide recognition for his  performance in the industry across Texas and the United States. During his 19 years in the market, David has been  involved in over $15 billion of multifamily transactions serving as Vice Chairman at Newmark Knight Frank (FKA  Apartment Realty Advisors), working on behalf of the world’s leading owners.

While serving as Vice Chairman in the ARA/NKF Houston office, David was responsible for managing over 40  employees, recruiting and growing the ARA Multifamily Investment Sales Team, the ARA Land Team, and the ARA  Capital Markets Team. Under his leadership, the ARA/NKF Team grew from $300 million in multifamily sales in the early  2000’s, to nearly $4 billion in sales and capital markets in 2018.

David’s private and institutional relationships in the industry as well as his experience identifying investment opportunities  are an integral piece to the Hilltop team.

Max Monzon | Chief Investment Officer

Max joined Hilltop at its inception and is a member of its Investment Committee. He is responsible for overseeing all of Hilltop’s investment activities including acquisitions, dispositions, financings and due diligence.  He plays a leading role in developing and implementing the company’s investment strategy. Max is also responsible for pursuing new business development, including capital formation and strategic partnerships.

Prior to joining Hilltop, Max worked at Raintree Resorts International, Inc., a Houston, Texas-based company that owns and operates properties throughout North America. While at Raintree, Max oversaw all transactions related to the company’s real estate interests.

A fourth-generation Texan and native Houstonian, Max is actively involved in Grace Bible Church and supports numerous non-profit organizations including Living Water International, Young Life and the Fellowship of Christian Athletes. Max holds a Bachelor of Business Administration in Finance and Real Estate from Baylor University. He is a licensed attorney in the State of Texas.

Chad Ellis | Chief Financial Officer

Chad is responsible for the management and direction of Hilltop’s Human Resources, IT, Accounting, Treasury, Payroll, AP, and FP&A teams. Prior to joining Hilltop, Chad worked at Weingarten Realty Investors, a Houston, Texas-based company that develops, owns and operates high quality grocery and necessity-based retail properties throughout major markets in North America. While at Weingarten, he managed all treasury functions, including leading the company’s capital raising initiatives and transactions.

A native Houstonian, Chad and his wife Lindsay are actively involved in their church, Bayou City Fellowship, and support various ministries, including Amada Women’s Initiative. Chad loves spending his free time coaching, chasing after, and making memories with Lindsay and their three children:  Asher (born 2011), Emerson (born 2012), and Storey (born 2016).  Chad holds a Bachelor of Business Administration in Finance from Texas A&M University.

Team and CULTURE

While not complete, one of the things investors have found helpful in the past is seeing how employees, customers have reviewed someone online. As of the date of completing this out …

  • Glass Door Rating: 5 stars (2 reviews)

  • We are certified as a “Great Place to Work”

  • Facebook Review Rating: 4.37 stars (Each of Hilltop’s 15 multifamily properties has an individual Facebook page. This is the average of all our properties’ Facebook review scores)

Spiritual Integration and Impact:

Faith Driven Investing can span a wide range from high yield to concessionary returns that have a higher level of spiritual integration. Having clear expectations of this philosophy is key for the movement. Each investment is unique and you might want to select multiples but if you had to choose one quadrant that best fits your groups spiritual integration and financial performance targets … What would it be?

In the multifamily, we provide above market returns (14-16% IRR, 6-10% annualized cash on cash returns). Market returns would be 12-14% IRR and 4-8% cash on cash returns). In the Spiritual integration side, corporately we have ‘high’ integration. On the asset level, we have Apartment Life teams that give the assets ‘high’ integration. On the management level, it is harder to measure as we have over 130 employees. The impact is ‘high’, but the integration I would say is ‘medium’ because of the difficulty in measuring a larger workforce across several markets. At the corporate level, we intentionally operate with Christ centered core values, and live out our faith in our day to day lives, including an optional Bible study where we are currently studying the Biblical foundation behind Hilltop’s core values.

Describe the Spiritual Integration Activities:

  • We own 15 multifamily assets and growing. 

  • We have Spiritual Integration at the Corporate Level in the form of Biblically based core values that we live by and discuss in a weekly Bible Study in the office. 

  • We have Spiritual Integration at the property level in that we have Apartment Life teams on each asset. Apartment Life team members live on site and basically turn the asset into a mission field. Apartment Life team members create relationships with residents by hosting events for the residents, make personal home visits to check on their experience on site.

Is Impact and Spiritual Integration Tracked?

  • No.

Are you partnered with any other organizations?

  • Apartment Life

  • Truth of Life Ministries (Omar Calderon is leading our office Bible study, and will start to mentor key team members as he develops relationships)

A lot of Investing Conversations look at Social Impact related to the United Nations Sustainable Development Goals. Is there one of these that most resonates with your organization?

  • TBD

WHY The FAITH DRIVEN INVESTOR?

  • Why are you compelled to be certified and a part of the Faith Driven Investor Group?

    To be in a network of believers that support each other, hold each other accountable, share experience, pray, help, and generally network to help solve problems, provide solutions or opportunities. 

  • Does the leadership align with the Unifying Principles on Faith Driven Investor and agree to the Code of Conduct? Yes.

  • Who nominated you to be listed on the FDI site? Pete Kelley.

AFFILIATIONS- Are you a part of any thIrd party groups, affiliations that you would like to list here?

  • National Multi Housing Council

  • Apartment Life National Advisory Council

Learn More

  • Key Contact Name: David Wylie

  • Phone: 832-526-5206

  • Email: dwylie@livehilltop.com

  • Mailing Address: 9 Greenway Plaza, Suite 2050, Houston, TX 77046

  • LinkedIn: TBD

  • FB: TBD

  • Twitter: TBD