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Tag Real Estate Investments

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Real Estate Investments

Screenshot 2023 09 12 at 11.14.36 AM

Reits, Office, Retail, Multifamily, Crowdfunding

So many options what is the best return for the risk? 

Really that decision is yours to make, everyone has a different level of risk capacity. Your investments should match where you are in life. If you’re comfortable, then your investments are safe with low risk low return. If you need to step on the gas your investments are gauged by high return and mitigated risk. 

Investing in dirt is a sound way to maximize return and mitigate risk. Private Lenders, Private Equity etc. provide short term loans at higher interest rates for developers and builders.  Many of these firms manage investments and we use them often. The interest is higher than a bank but money is easier to obtain and we use them only for short term construction type loans. Some banks today do not finance construction so we find this fits our needs. 

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Development

Teaming up with a developer is a great way to increase returns. We use investors as equity setting up our deals as a fair and equitable solution to investment risk/reward. 

Our investors or our Limited Partners have ownership in our LLCs that own the land. Each LP has ownership that equals the investment made. Taxes are passed through the LLC and assessed individually. So unlike stock our LP’s own dirt alongside us. We do not use our LP money for anything other than the land cost. That equates to our operation overhead, management, etc fees are not part of our LP investments as typical for fund investing. 

Transparency, every project is individually tracked, all payments, costs, etc. We share the full project financials with our LP. LP’s have access to our 24/7 portal and can view all payments, costs, changes, etc for the project they invested in.  

Operation, every project we take on is extremely organized and planned out. Design, costs, sales, comps, everything is developed on paper, reviewed, and reviewed again. We submit for permits the day we close on the property. Our goal is to expedite the build and get the project finished and sold as soon as possible. 

Returns, our typical returns for our LP is greater than 100% per yr. An example is our past project where our LP invested $300,000 and 11 months later at the closing received  $325,170 plus the equity back. Some of our deals are larger and require upwards of $4.5M in capital and may include numerous LP investors. These returns can reward our LP’s 53% per yr for a 2 year term. 

Exits, each of our projects require minimal capital to develop and offer large equity value at completion. Because we build quickly our assessment of the market and timing allows us the ability to plan a few exits. Our goal is always to build a quality product in a market space and price point that allows for a quick sale. Another exit would be to refi the finish product for the total cost including our equity LP investment. In this scenario the mortgage and operating costs would be significantly lower than rental rates.  We would rent the home for short term leases, selling the home at a later stage and splitting the profit.  Our larger projects are higher value allowing time to sit on the home until we reach the right buyer. This cost is built into the finance terms and equity return. 

Disbursements, when we close on the sale of the property our lenders and LP’s are paid out first. The profit is split either LP/GP 70/30 or 50/50 depending on the project size, smaller size 50/50. Profit is paid at the closing and the LLC is closed after proper filings.  

As you can see the returns are significant, the risk we mitigate with transparency. Corporate governance along with total transparency gives our investors the opportunity to maximize returns while protecting investment. 

If you are interested in learning more contact us at:

info@iridiumdev.io

The Different Types of Real Estate Investments and Their Pros and Cons

The Different Types of Real Estate Investments and Their Pros and Cons

residential real estate, commercial real estate, rental properties, fix-and-flip properties, pros and cons of real estate investments

When it comes to real estate investments, there are various types that investors can consider. Two common options include residential and commercial real estate. Let’s delve into the pros and cons of residential real estate, as well as the specific advantages and disadvantages of rental properties, fix-and-flip properties, and high-end spec homes.

Rental properties offer a consistent monthly passive cash flow, making them an attractive option for investors seeking regular income. However, they also require ongoing maintenance and management responsibilities. Landlords must be prepared to handle tenant issues, property repairs, and vacancies.

On the other hand, fix-and-flip properties can be lucrative when the market is hot and located in high-demand areas. Investors purchase distressed properties at a lower price, renovate them, and sell for a profit. This strategy allows for quick returns but requires careful market analysis and skilled project management.

Lastly, high-end spec homes in prime locations often yield excellent returns (+35% y.o.y.) due to their desirability among affluent buyers. These luxury properties tend to hold their value well even during economic downturns. Nonetheless, investing in high-end spec homes requires substantial capital upfront and carries higher risks with higher rewards for the seasoned developer/investor. 

In summary, while rental properties provide steady income streams with some maintenance commitments involved; fix-and-flip projects can yield quick profits but require careful planning; investing in high-end spec homes offers potential for substantial returns but involves higher financial commitments, typically $3.0-$5.0M. Ultimately, understanding the pros and cons of each type of real estate investment is crucial for making informed decisions that align with your investment goals.