We founded this firm because we wanted to develop an investment company you could trust to deliver on it’s promise. One that you could invest with over the long haul to get the true benefits of long term high quality real estate ownership.
We do this for you guided by our Permanent Wealth Architecture and 1 very important final test.
The Permanent Wealth Architecture is a sequence of focus that we use for every acquisition and throughout the asset management process:
- Principal Protection – you must be able to trust that what you invest, you’ll also be able to get back. This is investing rule #1 “first, lose no money.”
- Steady Income – commercial multifamily real estate offers returns from multiple sources – income, appreciation, principal pay down, etc. We do not offer a project to you unless we believe it can provide stable quarterly income.
- Growing Income – as asset managers, it is our goal every month to increase the operating performance of the property. This is reflected in Net Operating Income (NOI) growth. Since most of our projects have non-escalating debt costs, when we improve operations we also improve net cash back to the investors.
- Equity Growth – With growing yields you will also generate equity growth. Combined with the automatic principal pay down each year you can see how multifamily investing can generate consistent equity growth year in and year out.
- The ability to accelerate income/equity – The fifth and final component of the permanent wealth architecture is taking advantage of equity harvesting over time to create jumps in yield. By using strategic refinancing or 1031 Exchanges during sales you can increase your income at higher than normal rates. This is possible because equity invariably grows at a faster net rate than income. Once you have developed a significant enough amount of safe equity in a project, it can be refinanced out (harvested) and redeployed into another asset. You will then have two assets going up in value and generating yield with no incremental investment from you.
The combination of our investment process and the fact that multifamily investments provide the best sharpe-ratio (risk adjusted returns) over any 5,10, 15, 20, 25, or 30 year period is how we can achieve the permanent wealth architecture.
For every investment, we also add the “Grandma Rule.”
It may not sound overly sophisticated, but in our world of information overload, instantaneous decision making, and severe lack of corporate accountability, we believe it’s worth it.
For every project, before we sign the Purchase and Sale Agreement and again before we approve all due diligence, we pause and ask ourselves and each other…
“Would we put our grandma’s last $100,000 in this deal?”
Please note, I don’t think anyone would advocate putting any amount of “last dollars” into anything but a liquid savings account, BUT it is a very useful construct.
It keeps our investment decisions centered on what’s most important – you.