Q.- What would be the investors’ ideal return profile?




A.- Cash flow, and Equity upside.




This sounds good but these types of returns are a bit more theoretical than real when investing on a single-asset type. 




Rather than trying to find a “near to perfect” property that can offer both: High Yield Cash Flow and Upside, Investors can create a combination through a diversification of Real Estate Funds where each individual Fund plays its own strengths. High-Yield Funds often deliver consistent cash flow while offering capital preservation. Equity-multiple Funds deliver equity upside usually either at sale or refinance of the project, at the expense of current cash-flow.




Fund Managers use a wide-base of diversification, and the principle of diversification doesn’t stop at the point of geographical areas; it also applies within asset-type, asset-class, investment strategy, business plan, financial structures, sponsors, etc. Diversifying real estate portfolios helps Managers to hedge against risks.




What’s the benefit of a Fund?




Investors can leverage Fund Manager’s diversification to create a stronger blend of balanced portfolio that can offer them both; passive cash flow and Equity upside.




Since the Manager’s blend portfolio is focused on diverse investments rather than managing individual investments, they keep away themselves from a single-event types of risks, and by Investing in different Funds, Investors can get a pre-targeted monthly income (cash flow) and realize a back-end upside (growth) that can provide them a higher probability of meeting or exceeding expectations!




Have a question?




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