This page was originally written in English and this is a Google Translation. If you are reading it in another language we apologize beforehand for the many translation mistakes.
The best short way we came up to explain our business is this: we buy residential real estate in regions with strong prices upward trend. We then explore the rent during the duration of the “seller’s market” (a period where the price of real estate tends to go up), and resell the property when we consider the value to be at its peak. From there we start over in another area where this cycle is at its beginning.
Building and managing our portfolio in USA over the last 4 years, we learned that 3 factors work together to maximize return on investment:
1 – Acquisition – Buying well is essential. Not only because of the return on investment, but also because of the potential for appreciation of the property. It is often worth sacrificing a little bit of cash flow if the potential for appreciation is high;
2 – Leverage – Unlike many other countries, the US has a very strong and stable economic environment, which allows for the use of leverage without major risks. And as we all know, the correct use of this strategy can increase the return on investment in a rental property by up to 50%;
3 – Property Management – We have learned with practice that vacancy and maintenance costs are of tremendous importance. Together with leverage and quality in the acquisition, they are decisive in determining the performance of the investment.
All this we have been able to learn in a relatively short space of time, adapting the lessons learned (in more than 20 years working in the Brazilian real estate market) to the unique characteristics of South Florida.
Still in the topic of Property Management, we learned that scale, as in any other business, is of utmost importance. The more properties we manage, the lower the costs.
Hence the need to increase the portfolio under our management.
Our need for scaling the portfolio has become an opportunity to our investor friends. By adding other investors to our original business we collect the following benefits:
- Economies of scale – gain of purchasing power for both material and labor
- Dilution of fixed costs – the team is practically the same for managing 40 or 100 units
- Additional income – acquisition, asset management and property management fees
Our partners, on their side, gain access to all the benefits of a professional real estate investment company:
- Deep knowledge in the game through a team who has dedicated it self to the real estate business full time since 1995 (2014 in the USA)
- High performance in rental management and low maintenance costs
- Simple and clear accounting through a web based software.
- Easy access to an investors portal with all relevant information about their properties, such as pictures of each and every inspection, professional monthly reports and much more
- Passive, high-performance investment, yet with the low risk of the real estate market
If you already own real estate and are tired of managing it by yourself, you should consider the possibility of joining our group and sharing the benefits of a larger portfolio. It still your company, still your properties and profits. All you share are the resources to lower your costs. Contact us and we will find out together if we can help each other.
If you are still starting or growing your portfolio, keep reading to understand how we could help you.
To better showcase what we do, we present below an example of a property available for sale in the city of Pompano Beach – FL.
This is a complex consisting of 7 low-income apartments. It should be clarified here that we invest almost exclusively in low income properties, basically because of the more aggressive return on investment for this type of property. How and why we came to this conclusion is a subject for a longer conversation that we would be glad to have if you are interested in investing with us. For now let’s just say that this is the best rental investment option in our opinion.
Expected Performance and Important Disclosures
1 – Every investment involves risk and there is no guarantee that the investor will make money with this or any investment. There is good chance you will make money, but there is also real chance of loss.
2 – We can say with no doubt that we (my self and current investors) are very satisfied with the performance of our investments so far. Nonetheless, past results are no guarantee of future performance.
3 – It is assumed that all potential investors have sufficient knowledge about the real estate investment market to analyze the data presented here and reach their own educated conclusions.
4 – It is not in our interest to attract investors who blindly trust our opinions. We want partners who understand the market and their earning opportunities, as well as the risks of loss involved.
Hoping to have been clear with respect to the above considerations, here is our analysis of the earnings potential for said property:
The above results are our best estimates for an investment with similar characteristics, and can vary significantly according to the quality of the purchase and the behavior of the market. Here are some important variables in the study of scenarios:
- Total investment value
- Amount of rent
- Vacancy rate
- Maintenance costs
- Down payment
To help our investors better understand how each variable can influence the bottom line, we have created an online calculator so they can analyze each property in different scenarios and draw their own conclusions.