To determine the right markets, we analyze core economic trends like population growth, job growth, income growth, unemployment and housing trends like rent growth, concessions, rent/media income, vacancy, and absorbtion rates.
To source deals, we have a team dedicated to cultivating meaningful relationships commercial real estate brokers, the property owners themselves, and additional referral sources(asset managers, property managers, mortgage brokers). These relationships lead to more off market deals that other sponsors don’t have access to.
We do NOT rely on market appreciation or assumed rent increases for returns.We employ a rigorous underwriting methodology that conservatively projects the impact on Net Operating Income that value-add strategy will produce. After increasing net revenue and optimizing operational expenses, we expect to add at least 40% equity at a conservative cap rate to each property alongside much-improved cash flow. We use creative financing (seller financing, capital partner debt, etc) to close deals that cannot support traditional bank debt. These assets have the most upside potential and are not available to most sponsors.
We create partnerships, not fee structures. Our deal structure align incentives that benefit both the GP and LP with a focus on driving value as high as possible. We target a disposition timeline of 5 years. Once the debt service is repaid, investors receive 100% of the principal investment and their equity portion of the net sale proceeds. We target returns of 18-20% IRR and 8-10% annualized cash flow.