About Us

M3 Multifamily, LLC will acquire A, B and C class apartment communities, weighted towards B class, in urban locations ranging in size from 75-300 units in target markets in the western United States. The Principals of M3, John Mosby, Jon Martin and Mason Farrell have significant experience in Real Estate Management and Development.

John Mosby( jmosby@m3multifamily.com ) responsible for the Acquisition and Asset Management of each property. Prior to forming M3 Multifamily, Mosby was a Regional Vice President/Portfolio Manager with NALS, Inc. since 1995. NALS is a Santa Barbara-based national multifamily investment and management company. He was responsible for asset management for over 6,000 apartment units in Arizona, New Mexico, Texas, Georgia and North Carolina. He successfully transitioned seventeen large apartment community purchases into NALS ownership and management. In addition, Mosby has overseen the management of over twenty-five different multifamily communities in nine cities. He has extensive experience in acquisitions, due diligence, inspections, staff management, regulatory administration, asset repositioning and renovation.

Jon Martin ( jmartin@m3multifamily.com ) and Mason Farrell ( mfarrell@m3multifamily.com ) are sole partners in Martin Farrell Homes, Inc. a residential development company based in Santa Barbara County. Martin Farrell Homes has created a niche for itself in entitling, planning, construction and marketing single family homes and condominiums throughout the Santa Barbara and San Luis Obispo areas. Since 1994, Martin Farrell Homes has built, sold and is planning a variety of residential real estate developments with values totaling over $160 million. Jon Martin is responsible for project financing and renovation planning for M3 and Mason Farrell is responsible for business development, including project acquisitions and equity fundraising.

Our strategy is to focus on historically strong markets where demographic trends place upward pressure on rental rates. In an environment where owners are in various stages of financial distress and with limited capital available to refinance, we are seeing owners unload solid multifamily assets at cap rates much higher than we have seen in recent years due to a much diminished buyer pool. And, while multifamily isn’t immune to the recession, it hasn’t seen the dramatic vacancy problems that retail and office are sure to experience, and we believe it is being undervalued by association. Excellent value is there for those with cash and the ability to move quickly. We are looking to take advantage of this limited window of opportunity.

Within select markets with strong economic rebound potential, we will identify multifamily communities that are not maximizing income potential, have complacent management and may need renovation. We then perform thorough operational, economic and physical due diligence in conjunction with market surveys and competitive analysis. M3 also targets properties with adjacent land opportunities where we can put our development experience to work in building value for our investors.

Several primary factors shape our belief that the timing is right to focus on multifamily acquisitions:

• Valuations and Seller expectations are returning to sustainable levels
• We are able to purchase apartments well below their physical replacement costs
• Population demographics, nationally, are favorable to multifamily housing
• The real estate credit crunch has reversed the trend toward easy homeownership and pushes unqualified buyers back into apartment communities
• Supply of new workforce apartment communities is limited due to high cost of in-fill, urban land
• Cost of transportation is forcing population to compress making proximity to work and public transportation more important
• Infill housing will see more demand
• Possible inflationary pressures are on the horizon and income producing real estate is an appropriate hedge.

The characteristics and locations of our markets and communities will offer the following:

Markets that have:

• A diversified economy
• Population and job growth greater than the national average
• University/Education as a central core
• Strong workforce demographic
• In the path of growth
• Barriers to entry of new rental housing development

Apartment Community Characteristics that have:

• Excellent location
• Aesthetic and income value-added opportunities. Signs of obsolescence that are limiting rent growth
• Usually less than 30 years old
• Proximity to city centers with efficient public transportation (infill locations)
• Evidence of ongoing poor management
• Current uninvolved property ownership
• Missed income opportunities from non-rent sources
• Purchase price significantly below replacement cost
• Good economic fundamentals and cash flow
• Functional design, easily improved, structurally sound buildings

M3 Multifamily will create single asset LLC’s for each property purchased. The income will generate cash on cash sheltered returns with target rates between 12 and 15 percent IRR, and 16 to 20 percent annual average rate of return.

Most of the cash flows are sheltered through depreciation of the asset which makes the returns more attractive on an after-tax basis when compared to other investments. Investors benefit from a more diversified investment portfolio without the problems associated with direct ownership of income producing real estate.

M3 Multifamily will act as the managing member of each asset and earns its return only once the investor receives a preferential return.

Our philosophy is that M3’s success will be a natural outgrowth of having achieved healthy and consistent returns for our investor partners.