Helping investors navigate a changing market

Here’s how I see the market for apartment buildings now:

There are very few deals that make sense on their own, as simple cashflow plays. It’s not that they don’t exist, it’s just that you need to hunt a lot harder for them than before.

But there are plenty of value-add plays, if you’re willing/able to roll up your sleeves and do the hard work of turning around poorly managed and maintained properties.

In order to take advantage of these value-add deals, you need to:

  1. Know what you’re looking at. You need to know the cost of turning around the building, what kind of rents you will achieve on completion, and what the building will be worth at that time. Guess wrong, and you either miss deals you should have bought or buy deals you should have passed on.
  2. Be very well capitalized. Many of these deals are so screwed up that getting a loan is difficult / impossible. Even if it were easy, you’d still be at a disadvantage against your competitors, who will be all cash on any good opportunity. And, however you buy the thing, you’re going to pour a whole-bunch of money into fixing it up.
  3. Be able to move quickly when the opportunity presents itself. When something that might work pops up, you need to jump on it, because other investors definitely will.

How can we help?

  1. For people / institutions with access to a lot of money (say, $1MM+ cash to invest), we do “fee-for-service” deals, where they take care of #2 and #3 and we take care of #1.
  2. For your more garden variety accredited investor with, say $200-500k to invest, we run investment funds where we pool together the money of a bunch of individuals in order to cover #1,2 and 3 in one entity.

If you’re not one of the lucky duckies above, don’t despair. For people who aren’t wealthy, but who have $50-250k and want to buy their first building (maybe even to live in), we can help you find one of the needle-in-the-haystack buy-and-hold deals. They’re hard to find, but we’re good at it.

[Note: The above blog post is not an offer to sell anything or a solicitation for investment.]