Investment Strategy

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Strategic Approach to Multi-Family Real Estate Investments

Excellence in Value-Add Real Estate Investment

At the heart of our real estate fund is a deeply ingrained commitment to creating a portfolio of high- quality real estate investments. Our investment strategy is meticulously designed to provide superior risk-adjusted returns with strong downside protection. We delve into value-added investment analysis and rigorous due diligence, ensuring each investment is not just a transaction but a strategic decision that aligns with our long-term vision.

Strategy Principles

Market Identification:
Harnessing Growth in Emerging Markets

Our team excels in identifying early investment opportunities in tertiary and secondary cities and submarkets. These areas often present untapped potential for rental growth and property appreciation. We employ a data-driven approach, analyzing demographic trends, employment rates, and local economic indicators to pinpoint markets poised for growth. For instance, we've successfully identified markets with a projected 10-15% increase in rental demand over the next five years.

Property Acquisition:
Strategic Acquisitions for Value Creation

The cornerstone of our investment strategy is acquiring multi-family assets where significant value can be created. Our network includes relationships with developers, property owners, brokers, and other real estate professionals, granting us access to exclusive deal flow and pocket listings.

We leverage partnerships with lenders and financial sponsors for advantageous financing, targeting properties with a potential for a 20-30% increase in value post-renovation and rebranding.

Structuring:
Intelligent Financial Structuring for Sustainable Investments

We prioritize an optimized capital structure, working with trustworthy lenders and employing opportunistic leverage. Our approach includes a keen focus on satisfying Debt Service Coverage Ratio (DSCR) post-stabilization, incorporating elements like yield maintenance, exit fees, interest-only (IO) periods, and interest reserves. This financial structuring has consistently led to a healthy LTV ratio of around 70-75%, maintaining financial stability and risk mitigation.

Rigorous Due Diligence:
Comprehensive Due Diligence for Informed Investing

'Boots on the Ground' due diligence is fundamental to our investment process. We combine on-site evaluations with exhaustive financial analysis to ensure accuracy and sustainable profitability. Collaborating with legal teams (like Frost Brown Todd) and accounting experts, we meticulously analyze every aspect of potential investments. This includes realistic rental rate increases, with assumptions based on detailed market research, aiming for a 5-7% annual increase post-stabilization.

Monetize Assets:
Maximizing Returns through Strategic Asset Monetization

Our end goal is to monetize assets at target returns of gross Internal Rate of Return (IRR) of 15%-20%, including a cash yield of 6-8%+ per annum, paid monthly. This strategy is backed by a proven track record of generating superior returns with minimal investment capital loss. For example, in our recent portfolio, we've achieved an average IRR of 18% on assets, with a consistent cash yield exceeding our targets.