Reynolds Opportunities Partners has recently launched a private equity real estate fund to invest in condominium properties for senior citizens. The fund, dubbed Reynolds Opportunity Partners, is currently managing some $2 million but the firm expects to take in an additional $5 million by the end of January.

The fund is being managed by Jean-Paul Ngambi, former portfolio manager for the Employees Retirement System of Texas.

“We’re taking undervalued, inner-city land and redeveloping it into gated condo facilities and we’re using HUD reverse mortgages to sell it,” said Tony Reynolds, a partner at the Columbus, Ohio-based firm. “As long as they’re 62 years old, don’t have any federal liens, our partner, Community Central Mortgage, will prescreen them and if they qualify we’re going to move them into a condo for no money down, and they’ll have 30% equity. What we’re going to take is the power of attorney and reverse out the equity to pay for the unit through a HUD reverse mortgage.”

Reynolds said the firm is aiming to sell 60-70% of its developments using reverse mortgages and is currently targeting the cities of Detroit, Washington DC, West Palm Beach and Houston for project development. And while many real estate speculators are leery of a softening in the real estate market, Reynolds said now is a good time to buy.

“Right now, everybody is crying that the sky is falling but actually it is beautiful because developers who are holding too much land are giving up the land. So now land is at dirt-cheap prices and for me it is a great time,” he said.

The fund charges fees of 2/20 with a $25,000 minimum investment requirement.

Reynolds is a former Persian Gulf veteran and founder of Reynolds Family Homes, an urban affordable housing developer.