Frequently Asked Questions

---

We focus on multifamily real estate otherwise known as apartment buildings. While our focus is primarily on B-class properties in B or A-class neighborhoods where we can add value, we might also consider other asset classes such as mobile home parks or new construction. Additionally, we focus our efforts on properties with 80-120 doors, but will consider others outside those parameters if the deal is right.

1)  Safer Returns - Investing in apartments allows you to hedge against inflation. What that means is that when the price of eggs, or gas, or the cost of living increases, your returns can remain strong. While property expenses rise, income from new rents also rise offsetting any loss due to inflation.

2)  More Profitable - When it makes sense, we use a process called “cost segregation” which a study that allows us to maximize the depreciation of a deductible item in order to minimize the tax burden of the property. This is accomplished by accelerating the depreciation schedule of a specific deduction. Simply stated, this process legally allows you to pay less taxes keeping more dollars in your pocket. You should consult with your tax professional for a more detailed explanation.

3)  Wealth Building on Steroids - Investing in apartments will increase your wealth faster than a savings account or mutual fund. The value of an apartment building is based on the total income of the property (rents and fees) less expenses, then divided by the cap rate for the area. For example, when a management company raises the rent of a 100-unit property by just $50/mo it can increase the value of that asset by as much as $1,000,000 or more, depending on the area’s cap rate. When a property sees rental increases annually over a five-year period of time you can imagine the increased value of that property after just five years! This is one reason why it is easy to double your investment in just five years vs 13 years (or more) in a savings or mutual fund.

The truth why that happened is partly naïveté' and partly greed. Prior to the pandemic profiting by investing in apartments was almost a given. Anybody and everybody was jumping in to buy apartments and making money hand over fist without even trying. Fast-forward to today and you'll see the FEDs now dealing with inflationary issues resulting from how the administration handled the pandemic. In an attempt to slow inflation and avert a recession, the FEDs increased rates several times. Those properties that experienced foreclosure came from bridge loans that started with very low rates but unexpectedly increased dramatically overnight. This caused profits to plummet and, in many cases, go negative. Other operators overextended their budgets too liberally. Those that did not properly prepare and/or overextended themselves are now facing foreclosure. No investment in the world is 100% safe from loss. However, we vet all operators and work with ones that have NEVER been foreclosed on. These are the experienced and solid performers with a record of success you can count on.

We hire qualified, experienced property management companies to manage the day to day operations while employing an asset manager to oversee the property managers, lending companies, and any construction.

We use a variety of methods including market analysis, comparable property sales data, and our own expertise and experience to determine the value of an apartment building. However, we also look at historical data that includes household income, job growth, increases in average home values and crime reports, before diving deeper into our analysis. We want to make sure the property is in a growing and safe environment.

Many people set up an IRA or 401k with their employer when they start working. These investment tools can be converted to a self-directed IRA or self-directed 401k allowing you to decide where specifically you want those dollars invested. This money can then be used to invest in one of our projects. You can consult with your CPA or financial advisor, or we can refer you to an organization that can help you convert these tools. Other ways to find money is from the cash-value in your insurance policy. If you do not have access to these tools we can still help you set up a plan to invest.

Every deal is different. However, in most cases the minimum investment required ranges from $50,000-$75,000. Sometimes we come across deals that allow for a minimum investment of only $25,000 while others can have a minimum requirement of $100,000. We look for deals that can generate you a 2x total return in a 3-7 year period so the total amount you invest should be based on your risk tolerance.

Because you spread any vacancy over the size of the property. For example, if you have a rent house and the tenant decides not to pay the rent, then you are instantly at a loss and have to come out of pocket for the mortgage or expenses. If you are an investor in a 60, 80, 100+ unit property and a tenant decides not to pay the rent then you are still okay as your loss is spread over the number of other remaining occupied units. It’s a much safer investment.

Perhaps, but not always. Plus, you are “working” for your money and not allowing your money to work for you. The idea of passive income is to grow your investments to a point where they replace your “working” income.

Ecclesiastes 11:2 says to “invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” People will always need a place to live so make sure one of those ventures is housing.

Our focus is on commercial real estate with an emphasis in apartments. Our specialty is B-class properties where we can add value (provide improvements to the property) in order to support bringing rents up to the market’s average. However, we also look at other forms of multifamily real estate such as Mobile Home Parks and other housing assets.

We will start with a telephone call to get to know each other. Then we will schedule a zoom call to share with you a sample deal package, to give you an idea of what our deals look like. We will also discuss your financials and your risk tolerance to determine the best course to take when investing in our deals. This includes the source of your funds that will be used to invest (savings, SDIRA/401k, sale of stock, etc). After that, we will send you a "soft commitment" form to sign to let us know you are serious and how much you are able to invest when a deal comes your way. As deals come to us, we will review them, underwrite them, and vet the operators of the deal to see if it looks solid,  If everything checks out, we will contact you and share those deals and if you are ready to invest then we will provide instructions how to move forward.