Doral Rapid City: An Investor Case Study

LeavenWealth recently closed on Doral Apartments, a 52-unit complex in Rapid City, South Dakota. It’s an early-stage deal, but it’s already proving to be one of the cleaner acquisitions in the portfolio. Here’s what made it worth pursuing, and what investors should know.

Background: Why Rapid City, and Why Now?

LeavenWealth already owned assets in Rapid City before Doral came along. The market had experienced an overbuild over the prior five years, which created short-term softness, but that was starting to shift.

“We had our ear to the ground, and we knew that they had stopped building, or at least drastically reduced the building there,” said Chris Pomerleau, Co-Founder of LeavenWealth. “We were on the good end—or the preferred end—of the supply and demand curve.”

The deal also performed well even at elevated interest rates, which was a green flag. If a deal works at higher rates, it has more room to grow when rates eventually come down.

How the Deal Was Found

Doral was an off-market deal brought to LeavenWealth through an agent who already had a relationship with the seller. Because LeavenWealth was the only buyer at the table, there was no bidding war and no pressure to overpay.

That direct relationship with the seller also had a meaningful impact on the purchase price. The property appraised 7% above the purchase price before the deal even closed.

The Beginning of the Business Plan

The seller started executing LeavenWealth’s business plan before the transaction closed. The strategy was to increase rents 20–25%, and the previous owner had already begun doing exactly that on their own. Units were being rehabbed and rented at rates that exceeded even LeavenWealth’s own projections.

What Happened After Closing

When LeavenWealth took over, the team moved quickly. First, they focused on the things residents could see and feel. “It doesn’t help to come in and day two just start increasing rents without showing the people that we’re there to take care of the asset,” Pomerleau said.

• Cleaned up and updated all common areas
• Refreshed the landscaping (the deal closed in spring)
• Restarted the property’s community fountain
• Addressed all outstanding maintenance requests immediately

An HOA Opportunity They Chose to Pass On

Doral is part of an HOA, which is unusual for a standalone apartment complex. Early on, LeavenWealth was offered the chance to take a managerial role over an adjacent 200-unit HOA.

They declined. The current HOA management was strong, and taking it on would have pulled focus away from managing the asset itself. It was an opportunity born out of seller trust—the seller’s father had originally built the property and served on the HOA board—but not the right move for the deal’s success.

How Doral Fits the VestMint Fund

Doral is one of the newest additions to LeavenWealth’s VestMint Fund, which is a diversified fund that pools investor capital across multiple Midwest properties. It fills two gaps the fund didn’t previously have:

• Rapid City asset: The fund already held properties in Omaha, Sioux Falls, and Des Moines
• Class B asset in a Class A area: Located at the base of the Black Hills, with walking trails and strong surrounding demand

What Investors Should Know

The $5.9M purchase required a raise of just $1.8M. Many VestMint Fund investors chose to invest in Doral directly, in addition to their fund positions, because the deal’s simplicity and proof of concept made it easy to underwrite.

For anyone evaluating future LeavenWealth opportunities, it’s worth noting that some deals may be available only through the VestMint Fund. Being in the fund is the most reliable way to guarantee participation in every acquisition LeavenWealth makes.

Interested in future deals like Doral? Book a call with the LeavenWealth team to learn how to get started.