The future of investments

We primarily invest in markets with low unemployment, growing population, strong job growth, year-over-year rent growth, and low vacancy rates. We don’t just go based on recent trends but analyze the drivers of the growth to assess the permanence of the trends (e.g., is job growth driven by a temporary surge that reset in 3 years).

We invest only in value-add real-estate. This means, we only invest in opportunities, where we see a clear strategy to improve the net operating income, and hence the sale price. In other words, we can “force” appreciation on the property vs. simply speculating an appreciation. We invest primarily in Class B and C properties. These tend to be value rentals for the working class families. We find that these properties are much more resilient to economic cycles, and also command favorable tax treatments. We also only invest in stabilized properties. This means, at purchase, the property is already more than 90% occupied, and is generating steady cashflow. This again allows us to minimize the risk profile of the investment.

We only invest in opportunities where we can generate quarterly residual income and double digit total annual return (inclusive of equity and value appreciation) over 3-10 year hold period. More than half of the total returns are from steady quarterly cashflow disbursements vs. equity appreciation realized at sale. We are uncompromising with our performance criteria in our deals and we do rigorous analytical and strategic evaluation of every deal to find the “right one”. We underwrite and evaluate scores of deals before we decide to bring it to our investors. In our focus markets, we have strong broker relationships who often offer off-market deals to us. We place a much bigger premium on finding the right deal vs. simply closing deals and moving to the next one.

We focus our purchases in markets throughout the United States, with a current focus on the East Coast, These markets have strong employment and stable or growing population trends.