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OPPORTUNITIES FOR QUALIFIED INVESTORS
Real Estate Syndications
Vidente Capital provides investment opportunities to the everyday investor like yourself so that you too can begin your path to financial freedom. We realize that not everyone has the same goals. We want to know what financial freedom looks like to you. We take pride in understanding individual client needs and linking them with opportunities that work best for them.
Real Estate Syndications, are in short, group investments that allow groups of people to pool their money together to buy a building larger than they otherwise would be able to on their own. The advantage that investors don't
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Why Multifamily?
Multi family is a counter-cyclical industry that does well, even in a bad economy. Unlike single-family homes, the demand for apartment units has reached record-levels. Buyers, who three years ago could secure a mortgage to buy their own house, are now challenged to qualify for home ownership loans.
Because the cost of new construction is high, only “A” class apartment construction that commands high rents is economically feasible. Vidente Capital is dedicated to identifying opportunities in strong growing markets to meet the ever-present demand for multifamily B and C class properties.
The apartment market, as an investment vehicle, offers investors greater returns with less risk than other investments.
The apartment market is less reliant on business cycles for occupancy and will continue to benefit from demographic trends and population growth.
Multi family ownership is more management intensive than some other asset types. This distinction ensures “value added” opportunities.
Apartment demand is driven by an expanding and transitional population, and, at present, by record numbers of foreclosures.
WHY INVEST?
WHY INVEST IN APARTMENTS?
Multifamily properties historically maintain a structurally lower vacancy rate than other product types and generally exhibit greater resiliency in holding their values during market downturns. Demand can still increase for apartments in economic downturns when homeowners turn to renting to preserve capital and renters cannot afford to buy. Lenders offer superior terms due to investor familiarity with this asset type, and there is a wider availability of financing options.
The relatively high turn-over of apartment units (vs. office buildings, commercial space and single family homes) allows us to continually improve the assets as tenants move, increasing rents and therefore increasing value.
DO I NEED TO QUALIFY FOR A LOAN?
Vidente Capital has partnered with MIG who qualifies for all loans so no guarantees are required of our investors. Because we use limited liability companies to structure our deals, investor liability is limited to the amount of their investment and their outside assets are protected.
INVESTING IN MULTIFAMILY PROPERTIES
We have observed that Wealth Management firms are currently moving many of their investors towards multifamily investment opportunities like those offered by Vidente Capital. The earning potential in the commercial real estate market is climbing in key states like Texas, North and South Carolinas, Phoenix, Chicago and California, so there is an increased amount of interest in multifamily projects, according to Nreionline.com.
Private Equity firms and individuals are seeing high returns in the multi-family sector due to the simple need and demand for housing in larger markets and highly populated areas. The investment opportunities to build, develop, acquire and / or renovate multifamily complexes are producing attractive investment gains.
Acquisition Criteria
The following criteria are used to identify undervalued multifamily properties for acquisition, value optimization, management and disposition.
MARKET SEGMENTS
Age: The 18 to 34-year-old market segment comprises 22% of the U.S. population
Income: Renters who earn $35,000 and less annually
The retiring Baby Boomers are scaling down and are enjoying carefree multifamily community living.
PROPERTY CRITERIA
Multifamily residential apartments
Roofs with pitched construction
Minimum Occupancy 80% with the exception of properties that require renovation, providing properties are well located and present value enhancement opportunities
TARGET VALUES
Size and Price: 100+ units in the $5MM – $15MM range
Returns: 15-20% Cash on Cash, minimum Debt Service Coverage ratio of 1.5
Type: C- to B+ properties located in C- to A areas
Location: Emerging market areas with indicators for strong near and long-term economic growth
Emerging Markets
Choosing the “right” multi-family apartment complex to acquire is a critical aspect of Vidente Capital's investment strategy. That is why we are diligent in our exploration and focus on opportunities in Emerging Markets, where jobs and local economies are expanding. We follow jobs!
EMERGING MARKETS ARE CHARACTERIZED BY
People migrating in, rather than leaving a geographic area
Jobs being created rather than lost
Rents and property values quickly rising
Strong, local government leadership dedicated to attracting jobs
Markets beginning to absorb oversupply
There are many indicators and a lot of research that goes into identifying an emerging market in the US. We start out by performing thorough market research that includes the following areas:
Job Growth Report (local & regional)
Population Growth
Path of Progress Reports
Local Economic Reports & Trends
Chamber of Commerce Reports
Property owners who have suffered through years of a contracting buyers’ market frequently don’t recognize early signs of recovery. As investors, they are still feeling the pain of the previous cycle, characterized by decreasing rental rates, oversupply, and rising vacancies and unemployment. It can take local investors as much as a year or more to realize that their market has begun to turnaround. That is the prime buying window. MIG monitors indicators of emergence.
Acquisition Practices
Vidente Capital takes pride in building relationships with local listing brokers to get their “pocket listings” and access to other Bank Owned Properties (REO). Our searches include soliciting owners directly instead of waiting for properties to come to market.
Candidate assets undergo a thorough due diligence process to confirm the physical and legal status of the property and to confirm valuations to ensure achievable investment strategies.
Early in the asset evaluation phase, the debt and equity financing strategy is developed based on a number of factors such as property type, magnitude of renovations, expected hold period and investor objectives.
Well-located assets purchased below replacement cost assist in attaining appreciated asset goals.
INVESTMENT DISCIPLINE
Product selection involves a systematic, routine evaluation to identify favorable demand characteristics, i.e., job and population growth, demographic shifts, supply absorption rates and positive local legislation.
Markets with supply constraints receive most favorable underwriting. Markets with signs of oversupply such as surplus land, changes in zoning and increases in building permits are avoided.