When it comes to real estate investing, there are two ways to get involved: active investing and passive investing. As an active investor you are actively engaged in the management & operations of each and every property you own. This means that you are actively negotiating contracts, handling debt financing, managing due diligence, screening tenants, writing leases, collecting rent, fixing toilets at 2:00 am and perhaps evicting tenants. At minimum you are managing the asset by hiring a property management company to deal with tenants and property operations.
However, there is a different way to invest in real estate, that doesn't require you to find, negotiate and manage the properties; referred to as passive fractional investing. The idea is similar to purchasing stocks, where you own a share of a company. In essence, investing in a multifamily syndication is similar. Like minded investors can pool their funds to own a fraction or percentage of a company; and together this newly formed company owns a large commercial multifamily complex. As an ownership group, Growth VUE takes the active investor responsibilities, while the rest of the ownership group takes on a passive role. Our fundamental investment belief is that choosing the right asset, in the right market, and at the right scale-is the best way to buy large commercial multifamily properties and insulate our risk. We look look for the strongest markets that are business friendly and landlord friendly, with immense population growth, a strong job market, and a large population.
Bigger is Better
As the size of the property increases, so do the economics of the property. In turn, this drives better returns for the investor and allows for professional management that does not dilute investor returns.
- Professional property management
- Large non-recourse debt financing
- Lower cost to market and management the property
- Diversified cash flow & operational efficiency
- Insulation from vacancy & hedge against market fluctuations
The demand for apartments is rapidly growing. The country needs at least 4.6 million new apartments by 2030. However, the average annual construction rate only predicts that the US will have just over 3 million apartments by 2030. This creates a massive demand for apartment buildings. In particular we look for B class apartments with 100+ units, that were generally built between 1981 and 2009. These apartments are a nice, clean, and safe place to live but are not the newest in town. This is a great product because it is around 1/3 of all the apartment inventory in most markets.
Why choose B class garden style apartments?
What is Garden Style?
A garden-style apartment is an outdoor-style (garden) complex that can be one, two, or three stories high, though they usually have two or three stories. The complex has garden-like settings – low-rise buildings surrounded by lawns, trees, shrubbery, and gardens.
Why Garden Style?
Garden-style apartments are much more economical to maintain. They don’t typically have elevators, which can be very costly to repair and they have less vertical exterior materials to upkeep, such as siding.
High Demand & Rent
National Real Estate Investor magazine states that in garden apartment communities across the country, the average rents are rising quickly and occupancy rates are high. “It’s a really attractive type of development to own and operate,” says Greg Willett, chief economist for MPF Research, a division of RealPage Inc. The percentage of garden apartment complexes now occupied with renters is higher, on average, than it is for mid-rise and high-rise buildings. Garden apartment projects are posting annual rent growth at 2x the rate for mid-rise developments and 4x the level for high-rise properties.
The high cost of building, the demand for high-end A class apartments, mixed with low interest rates and a thriving economy, have made rent outpace income in the last several years. In turn, garden apartment communities are performing much better, even though many of them are older properties. These apartments are nice, clean, and safe, with more affordable rents that average $1,079 a month. Additionally, these properties offer the most opprtunity to drive value through rennovation and enhance investor returns.
We believe that choosing the right markets to invest in is 70% of our success. There are two main factors that we analyze before picking the market we want; population and economy. Population fundamentals: A large existing population of at least 500,00, population growth at or exceeding national average Net domestic migration growth at or exceeding national average. Economy: Large and diverse economy with multiple major employers, unemployment rate at or less than national average, low Rental vacancy rate, infrastructure growth, business and landlord friendly laws.
Our team fully manages all negotiations, lending, due diligence, property management, and renovations. As a passive capital investor you are only responsible for capital Investment, passive Cash Flow, tax benefits, capital appreciation, and investor conference calls.
We only work with top tier professionals in order to fully optimize our property and your investment. The property management teams are a huge part of our success in the long run because they deal with the property every day. Our main goals after acquiring a property are to increase net operating income (NOI), increase asset value by increasing NOI and choosing a market with a good cap rate, and forcing appreciation. The three most reliable ways to force appreciation are to increase rent per unit, decrease expenses, and increase rentability.
Liquidity & Distribution
Cash flow is our core focus. We want to use efficient operations and fully optimize the property in order to increase property value and generate higher yields for our investors. After subtracting all expenses from the gross operating income and having money left over it becomes distributable income that becomes yield for our investors. Our goal to to provide cash-flows to investors that they can supplement with their income or even fully live off of in order to become financially free.