A fund stops being an idea the day it signs its first acquisition. This year we signed three.
All three units belong to two developments with an unusual history. Both were already built and operating as rental buildings, owned by a large institutional fund. A new operator acquired them in bulk with a clear thesis: remodel them, upgrade their amenities, and sell the units individually. That repositioning process opened exactly the window we look for.
Price was the first signal: units considerably below comparable developments in the same area with similar characteristics. The honest difference — not being new — struck us as a generous discount in exchange for well-maintained buildings, better still after the remodel. We prefer proven square meters, with years of operation on display, over rendered promises.
The payment structure did the rest: one tenth at signing, another tenth in monthly installments, and the remainder against the deed. That calendar allowed us to commit to all three units with the capital of the down payments, leaving the largest payment aligned with the fund's cash-flow generation toward the delivery dates. Buying well also means buying with the calendar on your side.
At year-end, the first deed was signed in November. The other two will advance as the seller completes the individualization of the units — their process, not ours. It does not trouble us: each transaction's file was complete from signing, and someone else's calendar does not change the quality of a well-bought asset.
Just as important was what we did not do. We saw more opportunities than we took and said no most of the time — not for lack of capital, but for excess of criteria. A portfolio is not built by filling it; it is built by choosing.
Next year should bring possession of the two remaining units. Meanwhile, we remain where we like to be: with no debt that squeezes, no promises owed to third parties, and time to spare.
Xillion Capital