Hedge funds revisited: Accredited investors surrender to alternative investments
Hedge funds are private investment pools, typically for high-net-worth (HNW) individuals and institutional investors, that utilize diverse and often complex investment strategies to aim for superior risk-adjusted returns, sometimes through hedging or other speculative bets. [1] Hedging is a risk management strategy that reduces the potential for financial losses. A hedge should offset or limit […]
Differences Between Preferred and Common Equity
Preferred and common equity are both forms of ownership in a real estate project, but they differ in their rights and priorities. Preferred equity has payment priority when distributions are made or a capital event occurs. However, it also carries a target fixed rate of return. Conversely, common equity offers the potential for outsized returns […]
Maximizing Real Estate Investments: A Guide to Return Metrics and Equity Structures
INVESTMENT RETURN METRICS AND EQUITY STRUCTURES I often hear questions about return metrics and equity structures for real estate investments. Return metrics assess an investment’s profitability, while equity structures provide a framework for distributing net cash flow, returning capital, and allocating profits to investors. There isn’t one universal way to structure equity in an […]
Multifamily Real Estate – A Value Add for Wealth Managers
WHY MULTIFAMILY INVESTMENTS? For RIAs seeking to complement traditional portfolios with alternatives that offer income, long-term growth, and downside protection, multifamily has long been considered the favored real estate asset class. The sector has stood the test of time and proven its resiliency, even during the most challenging economic events. The National Council of Real […]
What is private equity real estate? Direct answers from industry experts who know it all
Private equity real estate allows high-net-worth (HNW) individuals to invest in privately structured equity and debt holdings related to real estate assets. This article will discuss the contemporary structure of these funds and how they work. Private equity (PE) real estate investing involves acquiring, financing, and owning a property (or properties) using an investment fund. […]
Time or money? Five reasons HNW investors are delighted by private placements
High-net-worth (HNW) can mean many things, but it typically refers to individuals who have at least $1 million in liquid assets (cash, assets that can be converted to cash quickly, excluding their primary residence, or a combination of the two). To be considered high-net-worth, individuals must have a net worth of $1.5 million or $750,000 […]
Phases of multifamily real estate investing: Opportunities, examples, and results
A multifamily private placement deal occurs when multiple accredited investors pool their resources to purchase a single property or a portfolio of properties. Every multifamily investment deal undergoes a progression of phases with a clearly outlined beginning, middle, and end. [1] While there is no official way to classify the various stages of a private […]
Revealing potential tax benefits in the multifamily real estate market
When assessing the potential profitability of a multifamily investment, active investors tend to focus on the property’s cash flow or internal rate of return. While this can be useful, it doesn’t paint the entire picture. Beyond generating income and increasing equity over the long term, there are other ways for real estate properties to turn […]
Accredited investor research: Selected must-know real estate percentages
Buying and owning real estate can be lucrative, but it requires a careful strategy and a thorough understanding of the market. Many factors come into play, and it pays to know the ins and outs of real estate before you start investing. After all, knowledge is the new currency. And generating positive cash flow is […]
Do interest rates have the most impact? The truth about market sentiment’s effect on real estate investments
Interest rates can significantly impact an individual’s ability to purchase residential properties, leading some investors to assume mortgage rates are the primary driver of real estate valuation. [1] In real estate, interest rates refer to the cost of borrowing money to finance the purchase of property. They are expressed as a percentage of the loan […]