Our Work In Action: Case Study 1
Central Falls: A City on the Rise for Impactful Investment
Central Falls, once known as "Sparkle City" for its 1980s drug trade, is now undergoing a remarkable transformation.
Our journey began with Mayor Maria Rivera, the city's first Latina and female mayor, who shared her vision of revitalization through affordable housing and community development. Her dedication to improving the city aligned with our mission to invest in areas that need real change.
With a 16.6% population increase in the last decade—the second highest in the city’s history—Central Falls now has 22,583 residents. Despite a median family income of $36,928 and nearly 30% of the population living below the poverty line, these conditions present ripe opportunities for affordable housing projects and social impact initiatives. Only 5.2% of the population holds a bachelor’s degree, and 36.2% of households are led by women with no partner present, further highlighting the need for community support programs.
The city’s transformation is bolstered by the new Pawtucket-Central Falls Transit Center, launched in 2023, which provides direct rail access to Boston, making it an attractive option for commuters. This improved connectivity, along with proximity to Providence and relatively low real estate prices, adds significant investment appeal.
By partnering with local leaders, we aimed to preserve Central Falls' rich culture while contributing to its growth. For investors seeking both social impact and high returns, Central Falls remains a city poised for sustainable success.
Deal Breakdown
This portfolio consists of 3 multifamily properties within 0.5 miles of each other.
After purchasing, we tasked ourselves with upgrading the vacant units. We wanted the living standard to rise enough for tenants to feel excited and proud to live there and to justify the reasonable rise in rental price and building values.
We then made time to visit each of the buildings, introduced ourselves humbly to all of our new tenants, assessed their rental payments history and personal situations, and took log of current living conditions including but not limited to the occupied units and the surrounding area.
Once we knew which units were in good condition and which tenants were honest, hardworking people, we made a plan for maintaining long term leases with good tenants and communicating new expectations with tenants that had bad track records. Those that showed genuine interest in changing, we worked with. Those that didn't, we amicably moved on from.
It only took 3 months to stabilize the buildings and operate each as monthly cash-flow positive. This deal, once stabilized, was producing a cash-on-cash return of 27% annually and a gross yield of 14%. Both of these figures were higher than our initial conservative projections.
Our impact
- The units that were vacant we have upgraded to a high standard. We have chosen for larger tiles and higher finishes which resulted in our tenants being extremely satisfied.
- We have implemented financial literacy education for free for our tenants. This is in partnership with our foundation (The Lanihun - Anderson Foundation).
- We have established a close relationship with city officials such as the mayor of Central Falls. Through our contacts we are up to date on any local programs which we automatically put forward to our tenants.
- We were able to increase our rents by 23 % yet still remain under market value by 5 %. The two initially vacant commercial units are now occupied by female minority (hispanic background) owned businesses. We have also established partnerships with the businesses, providing them with clients.
- The units we upgraded were rented out within 3 days of finalizing the project which indicates that we will have a far lower vacancy rate than our anticipated and counted for 5 percent. Currently our units are 100% occupied and no tenants are more than 30 days behind.
We believe our holistic approach will result in less turnover and vacancy yet also a better tenant satisfaction, quality of life and overall financial wellbeing.
A Case Study in Progress: One of Many Impactful Real Estate Investments
This case study is significant to us as it demonstrates our ability to generate high returns while making a meaningful impact. We believe that purpose-driven investing is crucial, and we are excited to expand both our investments and our positive influence in the future.