Our Investment Model is fairly simple. The model illustrates how a “Non-Performing” asset be re-positioned to produce cash and enhance the value of the asset.
Typically, there are four required skill-sets to perform the “Re-positioning” of a Non-performing asset:
A. Analysis:
This is the most critical step and it requires the ability to envision not only what the property’s current performance, but also projecting its potential performance.
B. Management:
Depending on the size of investment, the ownership itself or its management staff must possess the skills to manage real estate, people (including investors) and projects.
C. Rehabilitation:
Most of investment opportunities requires upgrades in the property’s physical condition to allow for increases in its income and value.
D. Capital:
The proper capitalization of the project is very vital to the success of the investment. Naturally, an under-capitalized project may not survive any fluctuation in income. Meanwhile, an over-capitalization (including all-cash purchases), is likely to reduce the return on investment.
In general, our Investment Model covers the Syndications (group investments) and the principal of cash distribution and equity build-up are the main objectives of the Syndicator (group sponsor). Actually, the process of capitalization in Syndications can be one of the major challenges to the Syndicator, primarily, because it is usually regulated by the government.
