Our investment philosophy is two-fold: preserve, then grow our investor’s capital
Capital Preservation means keeping your capital (money) safe and intact. Our top priority is to protect your initial investment. This is done by putting a number of measures and systems in place, starting with thorough analysis and conservative underwriting on each investment opportunity. We have an unwavering fiduciary responsibility to our partners and investors aimed at ensuring they reach their financial goals and generate freedom through passive income.
Ultimately, our investor partners are a critical part of our team, without whom we would fail. It is in our best interest to keep our investors satisfied so we can continue working together for the long term, reinvesting their capital from one deal to the next. For more specifics on the systems and processes we use to preserve capital, see the section below, “How We Preserve Your Capital”.
Capital Growth means taking your investment capital and building on it. We do this by enacting smart business plans on each investment property, producing more rental income and lowering costs. This puts more money in your pocket throughout the duration of the investment timeline and at the end, when the property is sold. Our investors are typically paid monthly returns from the property’s rental cash flow, and receive a portion of the equity (ownership) of the property, the value of which is realized upon sale.
With these returns, we strive to help you satisfy the goals you have and create freedom for you and your family. For more details on how we grow capital, please read further below.
In all of our real estate investment deals, we commit to aligning our interests with our investors. We are motivated to preserve and grow your capital and build a life-long relationship. Simply stated, Akras Capital and its partners don’t get paid until our investors have been paid first, incentivizing us to achieve our business plan targets and satisfy our investors, so they return time and again. Additionally, we personally co-invest in all of our deals with our own capital, demonstrating our belief and confidence in them.
But it’s not just about the investors and the partners. There are many stakeholders in our business, and we strive to take care of them all. This includes the people that rent our units, the contractors who renovate them and the professionals who help us find the properties. It’s a lot to balance, but our upbringing and commitment to long term relationships and doing the right make it second nature.
We Preserve Your Capital In Three Ways
1. Careful Market and Sub-Market Selection: Property location is critical in our investment model. We only acquire multifamily apartment buildings in strong, Inland Cities with growing populations and diverse economies. Further, we buy properties in desirable “B Class” neighborhoods that maintain and increase in value and rental demand in all economic market cycles.
2. Expert and Conservative Underwriting: Our analysis and underwriting team of Chartered Financial Analysts spent their careers on Wall Street, underwriting million and billion dollar institutional deals. They bring this discipline and conservatism to Akras’s property acquisition efforts. We only invest in properties that have significant equity built in immediately and realized at close, protecting against economic downturn. We utilize conservative revenue assumptions and liberal cost assumptions in our models, ensuring there is adequate cash flow and debt coverage. Additionally, we leverage long term debt financing as an added safeguard to economic downturn.
3. Professional Management and Business Plan Execution: Our team has decades of experience building and growing businesses with complex service offerings. We have strong ethics, discipline and systems, which translate into consistency, confidence and performance for our stakeholders. We are also aware of our limitations, and hire experts in construction, property and asset management to ensure our properties and tenants are well cared for.
We Grow Your Capital in Three Ways
1. Value Add Properties With Forceable Appreciation. We acquire multifamily apartment buildings that we can predictably grow in value for later acquisition by other investment teams. We remodel and improve our properties from the inside out, increasing rental demand and value in the market.
2. Cash Flow and Rental Revenue Upside: The properties we acquire cash flow from day 1 of ownership. They also have room to increase rents after the units have been remodeled and stabilized.
3. Market Appreciation: While this is more of a bonus, and not necessary for us to grow capital, often times the markets we buy in are experiencing appreciation from their economic growth, which helps to increase property value.
We Bring Institutional Diligence to Real Estate Investment
All of this said, it takes a very special property to meet the qualitative criteria listed above. We bring our background in institutional investment management into our investment philosophy, ensuring utmost conservative, risk-adjusted underwriting.
Further, we have an even more strict set of quantitative measures related to the revenue and cost performance of a property we evaluate that all needs to be supported by a price that is generally 30% discounted from the going market rate for similar properties.
We pass on 99% of the deals we see. The 1% we bring to our investors are special, and worthy of your investment capital.
Our 2020 Deal Statistics
In 2020 alone we were shown hundreds of properties, we underwrote dozens and made offers on a few, ultimately acquiring none. We don’t acquire when the market doesn’t support our criteria. We also sold three assets for sizable returns.
Deals Presented and Analyzed
Now Let’s Generate More Freedom In Your Life
Are you interested in investing or would like to learn more?
Akras Capital is a GP in select syndicated deals each year and we invite like-minded investors to join us. If you’d like to explore investing, or have questions, let’s start a conversation.
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