Real estate can provide an excellent vehicle producing superior risk adjusted returns. With the proper approach, we accept limited liquidity risk for a substantial increase in returns and reduced principal risk when compared with the liquid capital markets. We look only at simple transaction structures where our smaller size can be an advantage. Protecting our downside is of outmost importance when evaluating potential transactions.
Trust Deed Notes
- Attractive opportunities in this sector provide high monthly income, well over-collateralized position in stable real estate segments and ultra-short duration investments.
- Our holdings are typically first mortgage positions in non-owner occupied residential or commercial properties with additional recourse guarantees.
- Maturities are typically up to one year with 3 months minimum.
- Loan to Value ranges from 30-70%.
- When managed prudently, such opportunities provide long-term rising cash flow streams.
- We look for attractive income properties mainly in the residential segment.
- We typically consider the mid-quality of B and B- properties.
Renovation and Development
- We look for attractive residential properties that can offer a substantial capital gain opportunities within a year.
- Properties we consider are undervalued due to damage, owner neglect or other factors.
- We then consider the maximum price we can offer the seller while allowing for a high rate of return after additional capital investment to improve and market the property. We look to add substantial value during the renovation and/or development phase.
- We normally source off-market properties, short sales or auctions and generally avoid market listings to achieve the best value in our initial investment.