Real Estate Profitable Investments

Description

Our company
Our investment company was conceived more than 5 years ago by the understanding of its founders that they could combine their years of experience and network and form a venture that would be able to leverage their knowledge into feasible projects that would yield returns to them and their existing client base. The group been actively developing Real Estate for more than 4 years now and its proven track of success has led to an increasing amount of projects under their management which now exceeds 25 and more than 0 million under management, with a reputation well earned due to their solid returns. To further expand their growth and network, the company has since then partnered with a construction company which has over 20 years of development experience on construction and management of properties, an alliance that has led to more than 20 successful projects and even more satisfied investors due to a shared vision of hard, responsible, honest and ethical work as the key to achieving great projects while also making themselves a name within the LA industry.
LOS ANGELES MARKET
Los Angeles is the second largest metropolitan economy in the United States after New York and is the main hub for entertainment being also a home for media, Internet and new technology companies. By featuring the largest port in North America, it is also the country's key gateway access for international trade with the Pacific Rim. L.A. is a major center for many important industries including entertainment, shipping, aerospace and pharmaceuticals. Furthermore, its diverse business base has helped the City expand from its manufacturing roots to become a leading global business center with many large companies headquartered within the metropolitan area. Additionally, L.A. is also the U.S. base of operations for numerous Pacific Rim companies and is one of that region's top financial centers.
Los Angeles features one of the nation's hottest Real Estate markets, and at 3.4%, the second lowest county vacancy rate nationwide. The median home value increased by 8.6% last year to reach 2,744 and is expected to continue this trend. Historically, the appreciation rate has averaged 3.7% a year (for the last 25 years) yet in the past five years the average outperformed the historical rate by increasing at a 6.1% annually.
OUR APPROACH
We firmly believe that Real Estate is one of the best wealth generating assets and we also understand that one should use properties as the main instrument to obtain a passive income that will allow investors to retire with the peace of mind that the income that they generate will allow them to pay their bills in the future.
We know that investing in Real Estate can be different than doing so in other asset types (especially the first time) since information is not so easily available which is why we believe in constant communication with our investors, sending out monthly reports with updates (now in five different languages) while also being easily reachable to address any of our investors' concerns.
Finally, we also understand that every investor has different needs and desires and therefore we aim to provide great variety and flexibility in our projects. We try to cover projects that require equity for anywhere between ,000,000 and ,000,000 with holding periods that also greatly vary between 1.5 and 5 years, while currently working on increasing this amount even longer to cater to an audience that intends to buy Real Estate to keep instead for its cash flow instead of a quicker disposal for a large profit.
Feel free to contact us at [email protected]
BENEFITS OF INVESTING IN REAL ESTATE
Leverage: Real Estate is one of the few assets in which one can easily transfer some of the risk to a lender while capturing most of the returns for ourselves as investors. This enables us to achieve returns that would hardly be reachable outside the industry, or come at great risk.
Value appreciation: Appreciation refers to the rise of value within a property. It has many causes some being due to external factors (such as inflation) while some others are under the owner's control (such as upgrades to the asset). Historically, Real Estate prices have appreciated throughout time around a 3.71% for our market of reference and the rates since the recovery have been among USA's highest driven by a desire of people to live in big cities.
Limited Resource: The first one is that Real Estate assets are a scarce resource since the amount of land is limited. This means that a growing population is competing for a rather fixed number of properties driving the prices up.
Inflation Hedge: Unlike land money can be reproduced and an increase of supply of money will drive the worth of the existing stock downwards. With Real Estate, this simply does not happen, preserving the value of this asset while the value of dollar goes down. So even if it real terms our property's value is remaining constant, the monetary value of it will still be going up. Nonetheless, it is worth pointing out that property appreciation rates are higher than inflation rates proving that there is real capital growth besides the inflation coverage.
Diversification: Although Real Estate prices are linked to the market performance, they are less volatile than other assets because they are providing a really basic need which is housing and shelter. People can stop buying new phones, new cars and coffees, but their first priority will always remain the same: housing. That's why although house prices might fluctuate during economic hardship, their prices will not fluctuate as much as stocks, and the same goes to rents which aren't as sensitive to changes in market conditions.
Monthly Cash Flow: Cash Flow is the difference between the income and expenses that a property generates. By making wise investments, properties will yield a positive cash flow even when paying mortgages. Usually this can be combined with certain tax benefits to maximize the funds obtained out of the property. In a normal scenario, a mortgage will have a fixed rate (and consequently fixed payment) and due to inflation and property value increases the rents will go increase , allowing a growing cash flow for the investor. Furthermore, once the property is paid in full, all the income that was used to pay for the mortgage is now money that goes straight into the owner's account.
INVESTMENT STRUCTURE
For each investment, an LLC (Limited Liability Corporation) is created and capital is integrated to the company by both the investors as well as our company. This capital goes mainly to cover the purchase of the proposed land, as well as the acquisition of permits, and towards professional fees among other soft costs. Each investor receives shares in a proportional amount of what they have financially contributed to the project and will collect returns accordingly.
One of the benefits of this structure, compared to older methods such as buying one particular apartment is that when buying shares of an LLC the investor automatically gains diversification and mitigates property-specific risk that owning only one or few properties could carry making the returns more predictable. For example, the effect of having vacant one out of 2 properties that a particular investor owns represents 50% of his cash flow, yet if instead he owns shares of an LLC that owns 50 apartments and one apartment is empty, the impact will only be of 2% of the cash flow. Same logic applies in the situation when an expensive repair is needed and the costs can then be divided among all the apartments instead of someone taking a significant hit for such cost. Furthermore, in those situations our company can use its expertise and network to hire someone at a lower price avoiding unnecessary trouble and expenses to the investor.
Another benefit that an LLC provides is an absolute protection of the private equity of whoever is invested in a project for the totality of his assets except the ones that are at risk and part of the project for which the LLC was formed.
CONSTRUCTION PROCESS
Once the permits have been approved (which usually takes between 6 and 9 months) the company obtains a construction loan for the remaining costs (usually between 2.3 and 1.5 times the amount of capital already in the project) using both the land as well as the directors' personal wealth as warranty. The bank's funds go directly to Hasz Fund Control who is responsible for paying to the different providers in the amounts stipulated on the proposed project that was presented to the bank, while the construction takes place. The development process usually takes between 1 and 1.5 years depending on the project, yet complex projects could extend for slightly more.
Option A: Immediate sale
Properties are sold
Loan is repaid
Benefits are the difference between selling price and loan repayment.
Option B: Lease Up / Cash flow
Properties are rented
Loan is progressively repaid monthly
Properties are sold in the future
Outstanding loan balance is repaid.
Benefits are the difference between selling price and outstanding loan balance.
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Feel free to contact us at [email protected] for further information. We have financial statements for our projects so you can see our great returns (20% annual) by yourself.