Value Add Investing
Deal length: 3 to 5 years
Equity: $1.0M+
Target leveraged annual return: 15%+
Asset classes: Multi-family, Hotel
about
Value Add Investing is catered toward investors who have a medium risk tolerance and are seeking premium returns. As the majority of the returns are realized on disposition, this strategy is not designed to provide regular dividends throughout the investment. The investment length for this investment strategy is 3 to 5 years and targets an annualized leveraged return in excess of 15%.
1. Acquire
value investing
We look for opportunities to own well-located properties for less than what it would cost to build, or that have extra unvalued land. These are usually mismanaged or undercapitalized properties.
This reduces the risk and preserves capital.
2. improve
capital and operations
We invest in high return or asset preserving capital projects.
This increases the property income and the multiple an investor would pay for the cash flow of the property.
We ensure that properties are positioned correctly within the market and that sales resources are deployed to reach the right audience – tenants or guests who will pay the most. We also pursue ancillary revenue opportunities.
This maximizes the revenue.
We use a zero-based approach to each property’s cost structure to only spend what we need. We confirm that realty tax assessments are properly valued and that insurance policies are right for the properties.
This minimizes the operating costs.
3. Resolve
no emotional attachment
Once all of the value has been realized from the property, we decide whether to hold the property for another investment cycle or sell it. Our decision criteria is investment economics, not emotion.
