How do you mitigate risk of loss to investors?

By March 29, 2018

The benefit of our type of investment is for you become very knowledgeable about the risks before you invest. We provide a Private Placement Memorandum, Operating Agreement, and Subscription Booklet along with the latest and 12-month Trailing Profit & Loss, Rent Rolls, Property Brochure, Due Diligence Reports, Lease Audit reports, Executed Sales Contract and more. We will let you see documentation on the profit history of the specific asset you would be investing in, what the current issues are, how we intend to resolve them and the specific plan and anticipated returns.
 
We hire experienced securities legal counsel to help us draft the appropriate documents. We hire experienced commercial real estate counsel to review our loan documents, purchase and sale agreements, and property transaction documents, and to handle our closings.
 
Of course the property is covered by insurance to mitigate physical damage and liability risks. We also insure the property for loss of rent during rebuilding and carry a full replacement cost with an Umbrella Policy on each property.
 
To lose all of your investment, something drastic would have to occur that would lead to foreclosure; such as all of the tenants would have to move out due to an undiscovered hazard; or an environmental hazard could completely destroy the property and the insurer fail to pay for the extent of the loss; or US financial markets would have to crash with no refinancing available when a loan on a property is coming due, et al. We perceive this risk to be small, because we buy at a reasonable rate, without overleveraging, and then further increase value by enhancing the property and increasing income.
 
We use property management company to manage all of the assets we acquire, this way we are dealing with the property daily and seeing it perform with full care. We take immediate actions and strategize to promptly reverse any negative trends we see.
 
The only way to get a completely risk free investment is to choose a treasury bond…with its nascent level of return.