This article originally appeared in the May 2025 edition of MortgagePoint magazine, online now.
In a real estate market defined by rising costs, squeezed margins, and unpredictable economic shifts, Alex Hemani is betting on focus and flexibility. As the Founder and CEO of Ninety9 Capital, Hemani has spent nearly two decades refining a model built around value-add affordable housing real estate. But in today’s environment, it’s not just about the asset class—it’s about control.
Hemani’s Ninety9 Capital is a Dallas-based real estate investment firm that manages funds supported by vertically integrated companies specializing in real estate acquisitions, value-add construction, property management, title, and brokerage. A successful serial entrepreneur, Hemani previously built and sold companies within the financial and travel industries before pivoting into the real estate investment space more than two decades ago.
With a career spanning more than two decades, Alex has become a respected leader in the real estate industry, known for his innovative approach to property investment and management. His expertise in identifying high-potential real estate opportunities and commitment to long-term value creation have earned him a reputation for delivering consistent returns to his investors. Over the years, he has successfully executed nearly $1 billion in real estate transactions with many projects’ annualized returns surpassing 50%.
In this conversation with MortgagePoint, Hemani explains why vertical integration is critical for boosting investor returns, how his team is approaching distressed multifamily opportunities, and why the hype about office conversions may not be all it’s cracked up to be.
Q: How has your company’s vertically integrated structure allowed you to deliver returns during volatile periods?
Hemani: I’m going to rewind to the non-vertical structure first. When you look at the 2010s, a lot of the private equity firms were more of a three- or four-man team, and they outsourced everything. You had a team, and you outsourced the acquisitions to some brokerage; you outsourced construction to some construction company. For management, you outsourced the property management to some third-party property management company in those days, because there was so much margin, or things were being sold at a very discounted price. You could get away with that kind of stuff. Today, the market has changed. If you are not vertically integrated, what ends up happening is, you don’t have control of the returns for your investors.
For example, let’s just let’s just stick to construction for a second. If you budgeted “I’m going to spend X amount in construction or value add,” then halfway through the project, your General Contractor comes back to you and says, “My material costs went up,” or “I can’t deliver on the timeframe.” Who gets affected by all of this? The investor does. The investors’ return just got smaller and smaller because you, as a private equity firm, outsourced it to some third-party construction company that plays these games halfway through. I’m not saying they did it on purpose, but life happens, right?
When you’re vertically integrated, all of your companies are focused on returns for the investor. In that scenario, sometimes our construction company will eat that cost because it’ll affect the investors’ returns. There is no one to blame but us, because we are controlling the full process from beginning to end. Same thing with property management. If I’m just outsourcing it to a third-party property management company, and we’re not vertically integrated, what happens in that scenario is that the property management company’s goal is to make as much money for the property management company—not to look out for the owner of the asset or the investor, because they’re a property management company. They want to charge. They want to do whatever they can.
When you’re vertically integrated, all of your divisions are aligned to provide the best return for the investor.
Q: What core strategies or asset types have contributed most to your and your company’s performance?
Hemani: We have always been successful in the affordable housing space. Single-family homes have been good for us for the last decade, and that’s what we continue to focus on. From 2006 onwards, single-family homes have been our core strategy—buying homes at discounted prices that need work and adding value to them before turning them into rentals or selling them. We still do that today. We can still find assets at a cheaper price because we play in the value-added space. You have to see where the landscape of the affordable housing space is going and what sectors are looking like.
The sectors that are in trouble right now are the affordable housing space in the multifamily space. You’ve got a lot of these syndicators that came out of nowhere and bought these multifamily affordable housing complexes at the top of the market. None of them are panning out, though, with many being foreclosed on by lenders who are taking those assets back. But the lenders can’t take them all back at one time, because that would put the lenders under, but they’re starting to take them back.
We’re still in the single-family space, of course, but now we’re getting into multifamily because that’s where the discounted deals are coming through due to mistakes made by other operators and investors in the last few years.
Q: Given your emphasis on long-term value creation, what is your view of ESG or green upgrades in the context of your renovation and asset management strategy?
Hemani: We’re currently focusing on what we know works. If you want to put up solar panels, that idea is often too expensive. The cost of making things green hasn’t come down to where it makes sense yet. Cost always comes down on everything over time, but with the current administration, there’s no subsidies coming. So, until those costs come down, you will not see many operators move towards that.
Q: Some developers are exploring adaptive reuse and office-to-residential conversions. Is that an area you’re exploring?
Hemani: We actually bought an office building to convert to residential, but we didn’t end up doing it. We got the permits. It sounds great on paper, but it’s a really difficult task. The floor plan has to be a certain way. It’s not as easy as people think. It was a nightmare just to get permits, and the cost of doing it is significant. Furthermore, not every office building is designed well to make that conversion. It’s only a certain type that that even qualifies to convert. And again, you have no help from subsidies, so it’s all you. The numbers just don’t pan out, and the lift is heavy.
Q: Looking across the next 12–24 months, where do you see the biggest disconnect between perception and reality in real estate investing—and how are you positioning Ninety9 Capital to capitalize on it?
Hemani: It’s difficult to project, but the construction cost of a house is going to continue to increase, period. Material costs will likely continue going up because of the tariffs being put in place. Also, as you carve down the migrant labor workforce, that will likely drive up the cost of building a home. I don’t see costs coming down, only going up.
We have a lot of new multifamily units coming online, but remember—these were all started a couple of years ago. The new permits that are being pulled are not as plentiful. Home builders aren’t going to build as many homes, and you’re going to have construction costs for new apartments going up because the rates remain high. Once the supply is used up and there’s no new supply coming online, rents will go up. After probably another 24 months, you will start seeing rents start to increase on an annual basis due to a lack of supply.
