Alliance Property Holdings targets real estate investments that provide both annual returns along with additional profits from the determined exit strategy. Our philosophy on investing in real estate is that great wealth can be created through holding real estate property long term, allowing investors to benefit from increasing cash flows, appreciation, and the ability to exit at the proper time in the market cycle. Hold times vary but may be anywhere from 3 to 20+ years.
Choosing the “right” complex to acquire is a critical aspect of our investment strategy. We are diligent in our exploration and focus on opportunities in emerging markets, where jobs and local economies are expanding.
Strategy
COMPANY BUSINESS STRATEGY
WHY MULTIFAMILY
The renter population is expected to grow significantly from now through 2041. This growth is largely attributable to Millennials who are not ready to commit to home ownership. However, an underlying theme reported by the 2015 census report is that baby boomers are becoming the fastest growing renter demographic in the country. More than 5 million baby boomers are expected to rent their next residence by 2021.
Apartment demand is at 95.2% with apartment occupancy at one of its strongest showings in 18 years. Rent growth also remained strong with prices increasing 3.3% year-over-year. When compared to more historical performances, the apartment market’s recent rent growth is solid. Annual price increases have averaged 3.7% for 35 consecutive quarters.
THE MULTIFAMILY OPPORTUNITY
- People moving in, rather than leaving the area
- Jobs being creating and moving in rather than lost
- Rents and property values rising
- Local government dedicated to attracting jobs
- Markets starting to absorb oversupply
OUR RISK MANAGEMENT APPROACH
We enter all our multifamily investments with a proper plan, prepared for the unexpected and have a solid idea about potential costs. Specifically, our key risk mitigation approach is focused upon the following components:
FOCUS ON INVESTOR CAPITAL PRESERVATION: We develop a strategy to protect investor capital with a variety of available tools. Investment decisions are made with the primary focus on structuring investor capital for safety. Investors do not fear loss of principal, especially in a market downturn.
MARKET RESEARCH: We conduct comprehensive market research at the micro level. Prior to purchasing a property we know what improvements or new amenities result in higher rents, as well as know what renters want that we can easily deliver for them.
PURCHASE RIGHT: We buy the asset at the right price, with the right financing. We ensure that we are not over-leveraged or taking on too much debt, especially in a market downturn.
PROPERTY DUE DILIGENCE: We perform thorough property inspections and go over records with a fine-toothed comb. A property in bad condition or full of poorly screened residents is bound to provide financial headaches which we identify and plan for in our purchases.
TEAM APPROACH: We have the right team of experts for property inspections and financial record analysis. This allows us to effectively predict the costs of:
Deferred maintenance (immediate cash needs)
Capital improvements (cash reserve needs)
Loss of income from vacancy and/or poorly screened tenants
Renovations and improvements
PROFESSIONAL MANAGEMENT: We hire a property manager for our apartments. Having someone manage maintenance work, answer phone calls, offer customer service, and handle tenant reviews and complaints is essential to our strategy.
REALISTIC BUDGET: We create together a realistic look at property income and expenses during your first year or two of ownership. A pro forma budget analysis is used to assist us to avoid needing to raise more cash in the near future.