On today’s show we are talking about some of the structures out there, pooling of funds in a blind fund, or investing in an individual project. There are so many ways to invest. The question is, what are the pros and cons of one approach versus the other.
It really starts with getting educated on the type of investment that is going to fit for you. Investments run the full gamut, from buying existing stabilized assets at one end of the spectrum to undertaking large scale development at the other end of the spectrum. These are vastly different in terms of the rates of return that are possible, as well as the timeline and the risks associated with each of the asset types.
In general, Greenfield development projects have the greatest value creation potential but take the longest to bring to fruition. Fully stabilized projects deliver cash flow from day one, but have limited short term upside. Growth in value will come through rent growth over the longer term.
When evaluating any investment, we always look at three major factors
- the team
- The specific sub market
- The deal itself.
Due diligence on all three of these elements takes a lot of effort to do it thoroughly.
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Host: Victor Menasce
email: podcast@victorjm.com
