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Investing in Real Estate
Real estate offers long-term investors a combination of benefits not found in other asset classes:
- POTENTIAL TO REDUCE PORTFOLIO VOLATILITY: Investments in real estate historically show a low correlation to the stock and bond markets. Adding real estate to a portfolio may reduce the portfolio’s overall volatility.
- POTENTIAL FOR ATTRACTIVE TOTAL RETURN: Real estate investment funds have historically offered competitive long-term rates of return that complement the return from stocks and bonds.
- POTENTIAL FOR INCOME GENERATION: Investments in real estate pay out substantially all of the generated income to investors. Therefore, the dividend yield on an investment in the fund may be significantly higher than other equities creating the potential for a steady stream of income through various market conditions.
BENEFITS OF INVESTING IN REAL ESTATE
We believe the relative success of property-linked investments depends on their underlying property mix, management ability, and asset quality. By identifying assets with favorable characteristics and acquiring them at attractive prices, we seek to create a portfolio that will perform above index levels with a comparable level of risk. Banks and financial institutions, the world over, have suffered late payments and delinquencies for more than a year now and the rates of foreclosure are at all-time highs in the US. No one knows how long foreclosed homes, REOs and “short sales” will continue to flood the market. What is known, however, is that such trends have created exceptional investment opportunities for investors who have liquidity and are able to pick up assets at historically low valuations.
Our real estate investment division has and will continue to acquire distressed residential real estate assets in Southern California. When prospects are identified, the Management shall examine the value of the asset based on the income that it generates or can generate. The Management shall study comparable assets, their prices, and income streams to determine whether or not each asset is valued fairly.
nce a property is identified as a purchase target, the Management will conduct research to determine the range of income that such a property is expected to generate through the investment period. Analysis will also study and determine expected costs related to each asset. A formal offer will be submitted to the owner/financial institution for a price that yields a reasonable CAP rate (defined as the ratio of net operating income over purchase price), as determined by the management depending on the location, merits, and traits of the property.
Please contact our team for more information about our real estate investments and how you might benefit from potentially participating in our success.