
Multifamily ABCs: Property Classification
While there are no universal standards for property classification, multifamily real estate properties are split into lettered classes, though the most used are A, B, and C. Each offers different qualifications as well as unique investment risks and opportunities....

Mobile Home Park Investment and COVID-19
Mobile home park (or manufactured housing community) investment is one of the areas least affected by COVID-19. Since the first of the year, aggregate real estate values are down 11%, and malls and lodging properties have fallen 25%, while industrial, mobile homes and...

Apartment Turnover Decreases During COVID-19
Growing unemployment rates and the economic downturn during March and April were a major concern for many in the multifamily housing sector. But, as we’ve previously noted, the multifamily housing market is historically the most resilient and first to recover during...

Construction Rebounds for Multifamily Housing
The Census Bureau released its monthly report on residential construction for May 2020 and the numbers show a rebound for new home construction. As cities and businesses were closed due to COVID-19, construction on new housing projects also halted. But, it looks like...

The Resiliency of Multifamily Housing
Unemployment numbers have surged in the United States, with more than 40 million people who have filed for jobless benefits. Although there is concern about the multifamily housing market, historically this sector is always one of the first to recover from an economic...

Real Estate Remains Smartest Investment During Pandemic
At the beginning of April, we saw a lot of investors pull their money out of the stock market and invest in real estate. According to a Gallup poll conducted from April 1-14, only 21 percent of Americans think stocks or mutual funds are best for long-term investment....

5 Tips for Managing Your Multifamily Asset in a Crisis
The coronavirus and the economic chaos ensuing from a nationwide lock-down forcing businesses to close across a wide variety of industries is wreaking havoc across most commercial real estate niches. Office and retail (brick and mortar) will get hit particularly hard...

Multifamily Real Estate Beats the Stock Market (now, more than ever)
In a particularly volatile market, a national election, and in the midst of a growing pandemic, the stock market has taken some very recent and significant hits. For the first time since the 2008 financial crisis, the Federal Reserve took an emergency rate cut, a...

Why New Investors Should Strongly Consider Real Estate
Even as a new investor, you may be qualified to become an alternative investor. Alternative investments can come in a wide variety of forms—rare art, commodities—but it’s easier to make a passive investment than it is to sell a piece of art on eBay, and for new...
Why You’ll Want to Consider Investing in Manufactured Home Parks in 2020
Manufactured (or mobile) home parks are skyrocketing as many baby boomers and seniors are moving into manufactured home parks to enjoy this highly-affordable, increasingly-luxurious option. Manufactured home parks still aren’t luxury lofts and aren’t exactly known for...
Navigating the Multifamily Market in 2020
As multifamily market expands and investors tap into the unique possibilities, some worry about the state of the market. Where apartment demand was estimated at 300,000 units in 2019, demand is projected at 240,000 units in 2020. While this might be a dip, other...
A New Decade in Self-Storage Investments
Accompanying the entrance of the new decade is the growth of the self-storage industry. The appeal to a variety of older and younger demographics and the tendency to stay afloat during varied economic climates makes self-storage an appealing method of diversification....
Are Your Financial New Year’s Resolutions Ready?
It’s the time of year to think about holiday shopping, get-togethers, and all the endless tasks that keep us busy during the holiday season. But you’re not alone if you have a nagging feeling at the back of your head—what are my resolutions for the new year? What are...
Preparing for 2020’s Financial Recession
On August 14th, 2019, news reports reported the worst: we’d be seeing another recession in the upcoming year. Inverted yield curves are a typical indicator of a recession. News reports reported this all over the world. Geopolitical trade wars and slowing global growth...
What You Need to Know About Multifamily Real Estate Investing
Harvard’s 2019 State of the Nation study indicated that 35% of American households rent. In fact, by October 2018, only 56% of American households could afford to buy a home. In 2012, this number was 78%. However, as of 2019, the demand for rental housing has outpaced...
Making Opportunity Zone Investments Work
If you’re interested in real estate investments at all, you’ve certainly heard talk of opportunity zones in the last few years. There is significant potential in Qualified Opportunity Zones. From the Tax Cut and Jobs Act of 2017, opportunity zones were developed in...
What’s the Best Way to Invest in Self-Storage?
While it’s a far less glamorous way of investing than other real estate opportunities, self-storage presents a convenient type of real estate with low expenditures and is an investment strategy that generally remains resilient throughout economic downturns. In fact,...
Why Do I Need a Sensitivity Analysis?
The risks involved in making big investments can be overwhelming. However, there are calculations and tools that can be used to understand these risks more intimately, as well as predict potential outcomes. When you’re looking to make an investment for the first time,...
How to Create a Six-Figure Passive Income Stream Using Multifamily Real Estate Syndications
As many new investors are expanding their knowledge around the real estate asset class, I thought it would be beneficial to unpack the concept of passive income a little further. Contrary to conventional wisdom, informed investors have changed their mindset and...
5 Reasons to Invest in Manufactured Home Parks
Manufactured home parks (MHPs), commonly known as mobile home parks, are often overlooked by many real estate investors, but they provide a great opportunity to earn passive income like multi-family housing. As an investor, you buy land that has been zoned to be...
Frequently Asked Questions
What is an accredited investor?
We currently market our deals under SEC regulations 506 (b) meaning we can only share our deals with investor who are accredited and we have a relationship with. The definition in the U.S. is a person earning $200K per year or a couple earning $300K per year over the past two years and expected to do so in the current year; or a net worth of $1m (excluding your primary residence). Since we don’t advertise our deals the accreditation determination is by self-disclosure of the investor by a checkbox. If the deal is advertised to the public, then verification by an outside third party is required.
What is the minimum investment?
We set it at $50K and increments of $5K.
What is the process / timeline?
Once we have a property under contract, due diligence is about 60 days. We start the equity raise process with investors which runs about 5-6 weeks end to end. Marketing deck goes out, investor conference call takes place, investors reserve a spot, review the PPM / sign and fund. About 2-3 weeks later we close on the property. About 60 days later first investor distribution.
What are the risks?
They are outlined in the PPM (Private Placement Memorandum). That said, I like to provide a few data points. In 2009, at the bottom of the financial crisis, delinquency rates on single family homes was 5% vs 1% on MF apartments. Additionally, in Houston when oil went from $100 barrel to $50 barrel Class A (new apt buildings) had to offer concessions and vacancies rose to 15% while Class B (older MF where value add syndicators play) remained steady at 8%. Lastly, we buy proven. Our typical apartment acquisition will have occupancy greater than 90% and usually higher than that and the previous owner was making good money (T12 – trailing 12-month audit will prove this out). We want to improve proven properties not buy on hope.
When will I get paid?
Depending upon the type of deal, distributions can be paid monthly, quarterly, or annually. New build syndications typically have an upfront period of no or low cashflow during the build phase and then accelerate after lease up. The distributions can be direct deposited into the investors account.
What are your return projections and how are your returns calculated?
Typical cash on cash returns are in the 8-10% range and an internal rate of return (IRR) of 16 – 20% range. You may also see 2x multiple which means if you invest $50K into the deal the target is a double or grow your money to $100K in 5 years through distributions and profit at sale. You may also see an average rate of return which is simply the total return over 5 years divided by 5. In value add syndication, the average annual return may be deceiving (higher) than the IRR (Internal Rate of Return) as a large part of the investor returns come in the year of sale (modeled as year 5). IRR typically is a better measure for varying cash flows over a set time horizon.
When will I get my original investment back and what is the holding period?
Typically, at time of sale or liquidity event. We target year 5 as an average. It could happen in year 3 or year 7 or longer if we have a long downturn but 5 is typically what value add syndicators have as a target.
How will you communicate with<br /> me?
Investors can login to our investor portal to check on the investment’s progress. Updates on the property, some photos and how many units were renovated, rents we are getting, etc. Quarterly property management financials can be reviewed. Following March of each year you will receive a K-1 statement from us for your tax filings.
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