Carlos Vaz and Brad Costanzo of Conti & Costanzo LLC, backedby a growing list of various equity backers, have picked up the208-unit Huntington Apartments at 5700 Boca Raton Blvd. in FortWorth's struggling Woodhaven section and 143-unit Arbor Terrace at1029 W. Arkansas Lane in Arlington. As they step up their drive tobuy, they say they've bumped up their sweet spot to the $5-millionto $10-million range to make it easier to secure financing andattract new equity investors.

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They acknowledge to GlobeSt.com that they're "doing it the hardway," but they say it's a thought-out plan based oncost-segregation analyses to wring the most value in the quickestway possible from their acquisitions. "At the end of the day, it'snot about cap rates, but the property itself and how much a dollaris going to make us," Vaz says. "We are the ones who have to provesomething to theDallas community and it's not the other wayaround."

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[IMGCAP(2)]Vaz, who relocated from Boston, met Costanzo, acost-segregating consultant with 10 years' experience in Dallas,through his accountant. Their early-on legwork produced investorsfrom both their homeports and California.

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Vaz says he worked to raise Huntington Apartments' 64% occupancyto 94.3% during the three months that it was under escrow by"empowering" the leasing team and being on site to show residentsthat he cared and meant business. He says he delivered 51 breakfastbaskets to neighboring businesses as well as police and firestations. Also, he hired three people to distribute 10,000 flyerspromoting the complex, offering one month's free rent on a one-yearlease.

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Vaz says the $3.1-million deal closed with a bridge loan at 70%leverage, with just $37,000 allotted for some polishing. The sellerwas Blue Valley Apartments Inc. of West Palm Beach, FL, which tookover the 1980s-era complex on 9.5 acres in September 2006. Thecomplex has one- and two-bedroom units, averaging 802 sf, and rentsof 64 cents per sf.

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Right after they banked the Fort Worth deed, the partners saythey assigned their interest in the limited liability company andmanagement rights to asset to an unidentified partner withexperience in the Woodhaven submarket so they could focus on Dallasand Arlington deals. Last Friday, they acquired the 92%-leasedArbor Terrace, another cluster of one- and two-bedroom apartments.Units average 850 sf; rents are 72 cents per sf. Arbor Terrace willbe overseen by Migneault Property Management Co. of Rockwall,TX.

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The partners say they're eyeing about $150,000 of improvementsfor the 2.5-acre Arbor Terrace, which was bought through MilanoProperty Co. of El Cerrito, CA. The limited partnership seller hadacquired the 1970s-era complex, assessed at $2.08 million,in October2004. Duke Stone at Churchill Capital Advisors LLC inDallas arranged financing.

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"Because of our size and experience, we can't afford to makemistakes. Our attention to detail has to be two to three timesgreater than if we had family money backing us," Costanzo stresses."We're identifying assets that can be written off over a shorterperiod of time by accelerating depreciation. We can't miss anysteps to squeeze profit."

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The portfolio-building strategy calls for three to five-yearholds. The determining factor will be "what's happening in theneighborhood," Costanzo says. "But, we're not quick flippers."

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