While demonstrating positive cash flow based on actuals, we buy under performing B and C properties ranging from 20-50 units and higher held back by poor property management and deferred maintenance.
Class A properties with systems in place would also be considered.
Apply a stress test to all properties.
We strive for cash-on-cash returns of 8% and cap rates 6% to 7%. Having a high rate of return in conjunction to equity built over time, leads to a sustainable wealth building multifamily investment.
Maximizing returns through forced appreciation, accelerated depreciation and effective third party management.
Since our strategy is long term focusing on cash flow, we are not into fix and flipping multifamily units.
However, we have an exit plan using an IRR metric of 15% in place to be responsive to market conditions.
Using creative financing adds value to stabilize our properties while paying our investors, creating a secured investment on behalf of the banking institution. Other vehicles include seller financing, repair allowances, an option to purchase, mortgage assumptions, and lower down payments and cost segregation.
