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This answer really depends on the asset type and strategy. However, we believe Puerto Rico is one of the best opportunities to invest in 2019. Puerto Rico’s economy has been rapidly making a comeback since Hurricane Maria. The current economic conditions in Puerto Rico have similarities to what New Orleans experienced after Hurricane Katrina in 2005 and what the Phoenix, AZ market experienced between 2011-2013 (post recession). With the combination of tax incentives from Act 20/22 and now having 94% of Puerto Rico deemed an “opportunity zone”, investment capital has been pouring in!
Apartment syndication or multi-family syndication, is the act of raising money from individual accredited investors to purchase apartment buildings. Direct Source Wealth (the syndicator) makes it easy for investors by:
Time Freedom is the ability to do you want, when you want, as much as you want with your time. This can be accomplished through passive income investing. Direct Source Wealth offers passive investing opportunities, which are hands-off, long-term, buy and hold offerings.
Passive investing can be a great strategy for busy professionals looking for passive alternatives to the stock market and can also be great for self-directed IRAs!
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Each deal that Direct Source Wealth underwrites is different. Currently, Direct Source Wealth co-invests alongside others in properties located in Puerto Rico, Colorado, Arizona, and Indiana.
Direct Source Wealth seeks out markets with strong underlying fundamentals where rents have room to grow and improvements to the property will help increase the net operating income and bottom line for investors. Want to learn more about how underwrite and find deals? Please click here
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.
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