Our Strategy

Our Mission

Protecting and building our investors’ wealth by acquiring and managing class B and C multifamily properties in high growth markets, implementing value-add strategies to increase the value of the assets and deliver strong returns.

Our Investment Strategy

Target Market

Our target market for purchasing apartment complexes are the states of
Minnesota, Arizona, and Texas.

These markets exhibit strong apartment investment fundamentals such as strong employment driver to provide stable rent income, growing population to help healthy occupancy rates, strong economics to achieve 6% and above annual returns, and growing rents that indicates healthy and stable economy with lower associated investment risk.

Property Criteria

We acquire B and C class properties with value-add opportunity, meaning, with little improvements to the property and operational efficiency, to deliver above average returns for our investments. We look for properties located in great neighborhood with growing population, increasing household income, low crime rate, close to major business centers, and high visibility.

Conservative Underwriting

We take proper conservative underwriting approach so that we will have sufficient margin of safety and to protect our investments. Some of the assumptions we make are organic rent growth year after year, around 2% which is below the historical average rent growth of 3%, expense growth at around 2%, increase the property tax to 95% of the purchase price, and exit cap rate to be 50 to 100 basis points above the going-in cap rate.

Cash-flow Properties Only

We buy properties for cash-flow and not for natural appreciation. Depending on natural appreciation is very risky. Instead of natural appreciation, we believe in forced appreciation for increasing the value of the property. We enforce forced appreciation by implementing solid business plan to increase the income and reduce the expenses, this in turn, increases the overall property value. By buying properties for cash-only with value-add opportunities, we limit our dependency on what is happening in the market, thus mitigating our investment risk when market takes a dip.

Long-Term Financing

We believe in securing a debt with loan term longer than our planned hold period. By having preferred loan terms that is longer than our hold period, it will allow us to implement our planned business plan to receive above average returns for our investments. This will also mitigate the risk of being forced to sell or refinance property during the down market. We do this by securing a commercial loan from a bank or agency loan from Freddie Mac or Fannie Mae with the loan terms longer than our planned hold period.

High Reserves

We believe in having adequate cash reserves to cover any unexpected expenses that arises. During closing, we create an operating account fund with 1% to 5% of the purchase price as a reserve. In addition, we also budget $250 per unit per year in our operating account as a reserve. By having high reserves, we mitigate the risk of running out of capital and having to request additional money from our investors (capital call) which will reduces their overall return.

Positive Impact on Residents and the Community

As an apartment complex investors, we believe that we have a great opportunity to improve the lives of our residents and community in general. By providing a safe, secured, well functioning, clean and quality housing, we significantly impact the quality of life to our residents. We believe that when we take care of our residents, our residents will be more encouraged to take care of our investment.
By improving the property and placing good quality tenants in our apartment complex, we are in turn also improving the quality of the community and the neighborhood in general.

Our Process

Acquisition Process
  • Our team finds property in our target market that projects to meet the goals of our investors
  • Our team makes offer and negotiates sales price
  • Offer is accepted and deal is shared with investors
  • Our team performs more detailed due diligence on property
    • Review utility bills, bank statements, on-ground research, inspections, etc.
  • Our team renegotiates offer based on due diligence (if applicable)
  • Legal documents created by attorney and signed by both our team and our investors
  • Deal is closed
After Acquisition
  • Our team will hire and oversee property management company
  • Our team will perform asset management duties and monitor performance
  • Out team will execute and oversee the business plan
  • Our team will be communicating with investors often
    • Monthly updates
    • Quarterly meeting
    • And as needed
  • Our team will work with CPA to complete tax returns and provide Schedule K1 to investors