In 2010, Ronnie Morgan’s instincts told him that America’s housing market – battered by two years of recession – had finally hit bottom. The San Diego real estate entrepreneur huddled with his partners Elias Lilienthal, Brad Tuck, and together they formed a private investment fund to pick up a few foreclosed or underwater homes.
One by one, the Alegria Real Estate Funds made cash purchases of detached, single-family homes in areas with low for-sale inventories and high barriers to entry. Their success began to attract more investors each year, including Ari Hirshhorn, who became part of the management group.
The first Alegria fund raised approximately $5 million and was used solely to buy homes on the courthouse steps or through short sales, renovate them and sell them to families who could afford them. The second fund raised approximately $6 million and was used for the same purpose.
Alegria’s next two funds expanded the company’s real estate portfolio and had a slightly different business model. Instead of buying and reselling the homes, Alegria Real Estate Funds began renting a number of them, keeping them as longer-term investments.
Most of the early properties were detached homes in the South Bay area of San Diego County, but Alegria has also acquired condominiums in downtown San Diego and homes in North County.
Today, Ronnie Morgan’s timing back in 2010 looks good. Each month, housing prices inch up, and communities that may have once looked deserted and run down now show pride of ownership.
Alegria has been, and remains, at the forefront of the housing recovery. The company’s strategy also proves the adage that a business can do well by doing good for its customers and its community