This article is intended for educational purposes only; there is no guarantee that any investment strategy or any investment programs will be successful. See our full disclosure below.
As investment regulations in the Commercial Real Estate space have changed dramatically over the last ten years, so have the ways advisors have helped find alternative income streams for their client’s portfolio.
Supplemental or replacement income is exceedingly important, especially income with potentially lower risk. Since the 1980s, RealSource Properties has utilized and refined a proprietary econometric model to select commercial multifamily properties. The model examines over 35 dynamic economic criteria that is reevaluated every year by the RealSource Economics Team. This model has assisted in nearly $1 billion of transaction history at RealSource. So, what are the big takeaways?
Takeaway #1: Your Fund Manager matters to the long-term success of your investment.
In the 1980s, the RealSource Properties executive team advised major institutional investors on where to purchase Commercial Real Estate. Realizing their model effectively turned profits for these institutional clients, the group launched their own firm, RealSource, in 2003. Since then, RealSource has grown into RealSource Properties, a geographically diversified REIT focused on multifamily investments. RealSource’s acquisition process has been improved and tested over decades—and during times of market correction. Meet the executive team with a combined 100+ years of experience in commercial multifamily management.
The RealSource Properties team has developed in-house capabilities for acquisitions, asset management, development & construction, and property management. With these capabilities, RealSource can take full advantage of its institutional knowledge managing multifamily product and can implement efficiencies throughout its portfolio.
Takeaway #2: Value-Add asset management strategies are effective for multifamily properties in markets of anticipated growth.
You’ll find RealSource Properties in markets like Texas, Ohio, and North Carolina, where their value-add strategy has the potential be maximized. Value-add asset management means on-the-ground, active management. NOI growth can be realized through an advantageous acquisition, a development plan that can raise a property’s value, or potentially through meaningful increases in rent rates.
Takeaway #3: Current supply and demand trends means good news for multifamily investments.
Effectively located apartment homes in growing U.S. metros are more undervalued than most deep inside the real estate industry realize. Rising costs of living, coupled with increased replacement costs to build new housing, have resulted in a macro increase to many multifamily asset values.
An important issue has surfaced: rising single-family prices are causing more people to rent for longer, prolonging demand for already near-full apartment inventory. Consequently, multifamily in many metros is near term lows for vacancy levels and naturally pushing rent rates upward in many of the largest 50 metros.
In short, RealSource Properties is bullish on multifamily because the adage that everyone needs a place to live proves true in times of market appreciation and market correction.
Real Estate Investment Risk Disclosure
Real estate investments have the potential to lose value. The income stream and depreciation schedule may affect your income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. Financed real estate investments have potential for foreclosure. These are illiquid securities. There is no secondary market. If a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions. Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits. Tax benefits are not guaranteed and are subject to changes in the tax code.
Offering Disclosure
The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by the issuer, or any affiliate, or partner thereof ("Issuer"). All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM. There is no assurance that the investment objectives of any program will be attained.
All investments carry the risk of loss of some, or all of the principal invested. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment. These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. All offerings are intended only for accredited investors unless otherwise specified. Past performance is no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Issuer does not warrant the accuracy or completeness of the information contained herein.
Securities offered through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC is not affiliated with any other entities identified in this communication.
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Topics: Insights