Investment Strategy
"At Redtail Ventures, we specialize in venture capital investments that redefine the landscape of apartment and commercial real estate. Our strategy is rooted in a blend of meticulous market research, bold innovation, and strategic partnerships. By harnessing the power of emerging trends and disruptive technologies, we aim to not only generate substantial returns but also pioneer transformative changes within the real estate industry."
CASH FLOW
EQUITY
APPRECIATION
TAX BENEFITS
Our Investment Strategy
Invest ONLY in attractive Secondary and Tertiary GROWTH Markets.
We regularly spend hours analyzing market data on hundreds of secondary and tertiary markets. We look for markets with strong population growth, expanding employment opportunities, and increasing wages. As the saying goes, “a rising tide lifts all boats.”
Once we’ve narrowed our list of markets down, the real fun begins!
We look at over 30 different data points - everything from crime statistics to the regulatory environment in a particular market. We are looking for markets with long term population and wage growth, where it’s relatively affordable for the average resident to live, where there’s constraints on the supply of real estate, and where there’s a good quality of life.
You can read more about why we like Secondary and Tertiary markets...Click Here
The Process
Step 1: Join
Join our Investor Club to access a community of like-minded investors eager to invest in multifamily real estate to grow your wealth.
Step 2: Learn
We will learn about your goals and teach you the essentials to multi-family investing.
Step 3: Invest
We’ll provide opportunities for you to invest passively in real estate syndications We do all the underwriting, closing, & organizing of the deal. You just invest and watch your money grow.
Step 4: Build
With every investment, you will build wealth, additional passive income streams, and security.
Buy only what we know…
Just because a market looks good on paper doesn’t mean we are ready to plop down our money - and more importantly, our investor’s money.
We talk to professionals involved in the local real estate market. We talk to brokers, property managers, lenders, and many others. We really get to know what’s going on. And most importantly WHERE it’s going on. That’s where we want to be!
Once we’ve identified the Hot Spots within the market, we turn on the deal flow. We establish relationships with the top local real estate brokers. We also market to property owners for off-market deals. The goal is to see every opportunity within the market that fits our investment criteria.
The truth is, we underwrite a lot of deals. A LOT. It’s not unusual for us to look at 100 properties before we write an offer on one. We are EXTREMELY SELECTIVE and invest in only the most attractive properties.
It usually takes 2-3 years from the time we identify a potential market to the time we acquire a property in that market.
… and what we know works.
At Redtail Ventures, we are very risk averse. When we put our money and our reputation on the line, we want to be as certain as possible that we aren’t going to lose either.
The best way to mitigate risk in real estate is to buy properties right. When you look at as many opportunities as we do, the right ones jump out at you.
We also have a preference for fixed rate debt and conservative leverage from balance sheet lenders. We try to avoid the use of bridge loans and securitized debt whenever possible. The typical mortgage Redtail Ventures takes on has a LTV of 60-70%.
Implement our Value Add Strategy.
With every investment we make, we create a Business Plan. That plan is unique to the investment property. Every deal is different and so is every Business Plan. The one thing that’s constant is that we will be doing some form of Value Add. It’s what we do!
The minute we’ve closed the deal, we immediately get to work:
-Repairing any deferred maintenance.
-Renovating a portion, if not all, of the units.
-Adding or upgrading amenities at the property.
-Enhancing the curb appeal.
-And much more (so much more!).
We generally find that in place rents are 20-40% below current market rents due to the previous owner’s management of the property. As leases expire, we renew the leases at current market rates. This improves the cash flow of the property.
This process generally takes between 6 months and 3 years, depending on the property. We want to start collecting market rents as quickly as possible. The fastest way to create a margin of safety in an investment is to grow the Net Operating Income (NOI) and cash flow. Since we take on conservative debt loads to begin with, this strategy, in effect, de-levers the investment further. It also provides us with many more options down the road if we consider a liquidity event.
Hold Forever.
Will Rogers famously said, “Don’t wait to buy real estate. Buy real estate and wait.”
We think ol’ Will was on to something.
One of the great things about buying real estate is that you can use leverage, in the form of a mortgage.
Think about it…you can’t take out a loan to buy more Apple stock. But you can take out a loan to buy more real estate than you could afford with just cash.
Eventually, your tenants pay off your mortgage and you own 100% of the property…even if you only put 20% down when you bought it! For that reason, we buy property to hold for the long term.
Having said that, we do offer our investors a couple of great options, should they want or need to get their money out of an investment.
One of those options is that we will actively look to refinance the property at least once during our ownership. Generally, we look to refinance the property between years 3-7, once our value add strategy has been completely executed and the property’s value has skyrocketed.
We also look at the overall market to try to ensure maximum value out of any liquidation event.
