Niche Real Estate
Your Brief Synopsis:
Real Estate Fund – self-storage, apartments, industrial, office and retail investments
Target Return – 10-12%
Minimum Investment – $100,000
Length of Fund – 3-4 years (technically it’s 5, but the fund has been open a bit)
Fees – 4% (most funds are 8-16%)
What Makes This Fund Different –
- Those fees! They’re VERY low, meaning more return for you.
- They invest with ethical companies that they have a personal relationship with. That means, companies that didn’t bow out of their obligations in the last downturn and claim bankruptcy, or get litigious. They care about their investors and employees.
- They serve an underserved niche in equity investing.
- Most real estate companies don’t want to invest in anything under $6-7 million, this fund can invest $500k – $3 million+, a range that most companies overlook.
- They often invest as a General Partner (not a limited partner). Meaning, they’re paid first, as if they’re an owner on the property, not just an investor.
I also like them because they hold onto money and wait for the right investment. Most will push it out the door just to employ it, but they wait for the right opportunities. In my experience, this has almost always worked out better in the long-run.
If there ever was a theme to my business, it’s relationships. I work with people that care. People work hard for the their money and they want honesty and to be treated right.
This fund does the same thing – they work with people that care and get results. I’ve known one of the fund managers for over 10 years and I trust him and his judgement.
Illustrative Story –
Let me tell you about their first fund.
I got a call from my client to ask me if what he was reading was real – he invested $50,000, +/- 6 months they returned his $50,000 and he’s still getting interest payments, as if his money were still invested. He had to call to make sure he was reading it correctly.
Now, I don’t expect this to happen with this second fund, but it illustrates the types of deals they have the opportunity to be in front of and do.
Potentials are the length of time you have to invest your money and the fact that it doesn’t pay monthly dividends. Dividends are paid quarterly, but they don’t promise them every quarter. You get a dividend when they make money or sell a property.
And finally, if there were a downturn in the economy, your money might be tied up for years in these investments, waiting for things to come back.