How We Qualify An Investment
Class B and C properties are known to be more versatile than Class A and D Properties. For this reason, we aim to acquire Class B and C multifamily properties that produce cash flow.
We target properties with value-add potential. This means that there is an opportunity to increase the net operating income (NOI) the property produces. We can do this by improving the property conditions through renovations, and/or decreasing the operating costs by improving operational efficiency. NOI determines a multifamily property's value, meaning as NOI increases, so does the property's value.
We underwrite every deal that comes across our table conservatively. This means that we try to "kill" the deal, and think of "worse-case" scenarios that might impact the NOI. Our approach ensures that the property can perform during poor economic conditions, such as during a recession.
We acquire properties in markets that have stable economies, job growth, and population growth. We also gravitate towards markets with diverse industries, and strong anchors like universities, big employers, or hospitals. We aim for landlord-friendly states.
We target Investment Opportunities with a minimum Projected Return of 100% over a 5-6 year period. We typically offer investors a cash on cash return of 10-12%, a 15-18% Internal rate of return, and a 8% preferred return.
*these returns are net of fees*