What risks may I face in this investment?

Like any investment, there are some factors that are outside our control (i.e. market conditions) that pose a risk of losing your entire investment. The same is true for other investment vehicles.

However, for our approach in multi-family real estate, we can mitigate risks to a large degree, as outlined below:

  1. Conservative Underwriting. Due to our ample room for market variations (i.e. occupancy decline), we can still get through a market downturn.
  2. Value-Add Purchases. We buy properties that we can add immediate value to, gaining a significant equity foothold to weather market declines or unexpected events.

Something to consider is that delinquency rates at the bottom of the financial crisis in 2009 were 1% on multi-family properties as compared to 5% on single family houses. We buy properties where our sensitivity analysis supports returns at or even below historically low market occupancy and rent rates.

All risks associated with an investment will be laid out in great detail in the Private Placement Memorandum (PPM).

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