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Our projects raise money thru a “syndication” model, which is the pooling of investor money to purchase an asset. Syndications are regulated by the SEC, and require investors to qualify as either “accredited” or “sophisticated”. An accredited investor has a minimum net worth (not including primary residence) of $1 million and/or $200K annual income (single) or $300K (married) over the past 2 years. The general concept is that an investor should have the competence to accurately analyze the investment opportunity and its risks.
Although multi-family properties are among the safest commercial real estate investments you can make, there is always a risk in any investment. To mitigate risk, our strategy is to buy apartments off market and “below market” and hire the very best property management teams available to increase income and reduce expenses. In addition, we have a D.R.E.A.M. program that stands for Direct Revenue Earnings Acceleration Model. There are no guarantees in investing. We invest our own capital in the projects, so we have an alignment of interest.
The exit strategy for our investments is generally five to ten years, although it may vary depending on the property and specific business plan being executed. Changing economic circumstances can also affect the original hold time, so passive investors do need to place a certain level of trust in the management team to make decisions that will maximize all investor’s returns. Original timelines will be adhered to as much as is possible to protect everybody’s investment.
We do cost segregation analysis at some level on every deal, and continually review if/when it may be appropriate. If our accounting firm determines there is a benefit we will do the cost seg and those accelerated depreciation benefits are passed through just like standard depreciation. As co-investors, we are always looking at ways to increase net gains.
Every investment opportunity is different, so it is impossible to quote specific terms. Our goal is to only pursue deals that have the potential for exceptional cash flow (usually double-digit returns) AND forced appreciation. When we discuss a specific investment opportunity with you, we’ll provide projections for returns and equity growth for the length of the project.