Rigorous screening, selective acquisition
Prosperity Capital Partners reviews hundreds of potential acquisitions every year. Out of this pool of potential acquistions, we conduct due diligence on about fifty, make offers on twenty, and finally purchase 5-10 apartment buildings. The keys to the process are strict adherence to purchase criteria that emphasize current cashflow and future value. If an asset doesn't check all the boxes, we don't buy it. This keeps us and our investors safe.
Forcing appreciation by adding real value
The market value of a multi-family asset is based largely on net operating income, NOI. In simple terms, our strategy is to reposition properties we own by upgrading their in-unit amenties and as well as common spaces in order to justify increased rents. By increasing rents and decreasing vacancies, while also decreasing management expenses, NOI improves, which increase overall value significantly.
Exit when it makes sense
A typical hold-time horizon on a particular asset is 3-7 years. The timing of the exit is determined by market factors and the increase in value we are able to achieve, along with other factors. The bottom line for us is balancing market timing for maximum profit-taking with enjoying the cashflow provided by ongoing ownership, all to the benefit of our investors. For the majority of our assets, we target a total annual return of 12% to our investors.
Benefits of Investing with Us
- Working with a seasoned multi-family operator with a solid track record of performance: 15-year history of double-digit annual returns to investors, $99MM in assets owned, as of Q4 2019
- Truly passive investment vehicle. Although many of our investors are themselves real estate operators, investing with Prosperity Capital Partners provides ongoing income with no personal time or effort required
- Ease of diversification into the multi-factor commercial sector. Investing with us is far easier than attempting to navigate the complexities of acquiring and managing apartment buildings on your own.
- Often better cash flow, cash-on-cash return, tax benefits, and financing options, compared to owning single-family real estate assets. For example, our investors may find that tax credits from depreciation in the year they invest may equal 80% or more of their invested capital. This is a huge benefit not easily found elsewhere.