Investment Strategy

Before placing equity into properties our operators are looking to acquire, we go through a few due diligence processes to ensure the best returns for our investors.

Assessment

We check if the property is undervalued and right for acquisition, and value optimization. Then take a quick look at property numbers, to confirm whether the deal would meet our requirements.

PROPERTY CRITERIA

  • Multifamily residential apartments

  • Occupancy above 80% with the exception of properties that require renovation, providing properties are well located and present value-add opportunities

TARGET VALUES

  • Size: 40+ units

  • 7%+ Cash on Cash, Minimum Debt Service Coverage ratio of 1.25

  • Type: C+ to A properties

  • Property Vintage: 2000 or newer

  • Location: Emerging market areas with indicators for strong near and long-term economic growth

Research/Analysis

Thorough research on the property market. Analyzing the market rent, schools in the area, stores, malls, medical care, crime, market type, market Cap rate, Vacancies, Transportation, Age Demographics, etc.

Market Research

  • Reports 1-5 mile demography of property market

  • The ages of 25 - 35 years

  • Renters who make at least $55,000+ a year in income (Affordability varies from market to market).

  • Rent must not exceed 30% of the median income.

  • Properties located in B to A areas.

  • Renter Ratio 35% - 50%

  • Emerging Markets

    • Rents and property prices are growing

    • Jobs are being generated and migrating into the area rather than being lost

    • Local government efforts to attract jobs are paying off

    • Markets are beginning to absorb excess supply.

Due Diligence

Several sophisticated Underwriters ensure that the figures make sense to our investors. reaching out to lender brokers. We confirm any costs for value addition with property managers and contractors. Also, check if there’s a demand for our value-add strategy.

Each asset goes through a thorough due diligence procedure to verify its physical and legal status as well as its valuations to ensure that investment plans are feasible.

The debt and equity financing plan is created early on in the asset evaluation process based on a variety of variables, including the type of property, the scope of renovations, the anticipated hold time, and investor goals. Depending on the specifics of the business plan, each asset is normally retained for 5 years or more with the option to refinance at year 5.

Quarterly Reports

Reports as well as payments will be sent out quarterly. These quarterly reports will consist of what improvements the property is going through, current occupancy, rent increases, etc. This information will be coming directly from our operators.

Exit Strategy

After holding for 5-10 years, it’s time to sell and enjoy the returns we work hard for. However, based on the property type the we have the infinite “exit no exit “. Where the property is refinanced, investment is returned to investors and get infinite cashflow from the property.

Equity Sales are shared between the investors and BAS Capital, and these are typically shared with 80 to 20 percent in favor of our investors.

The sale would also depend on the current condition of the market which was already taken into consideration during the research and Due Diligence stages. By making the deal attractive for buyers, we always make sure to leave some value add opportunities on the property.