Mid-Month Update January 15, 2014
Welcome to 2014. After a stellar year across most investment categories we are looking forward to a 2014 in which we continue to invest as we always do, more concerned about the best risk adjusted returns possible than with the best absolute returns possible. Markets will go up and down but good research and discipline is something that never goes out of style.
As can be imagined, things generally slow down around the holidays, and this year was no different, but that doesn’t mean there was no opportunity to be found.
Opportunity Knocks: We closed the purchase on 19,000 sq. ft. of rented office space in Santa Rosa, Ca. Unlike many Opportunity Knocks projects the plan is not to resell this property right away. Instead, after redoing the leases and stabilizing the property the plan is to refinance the property, return as much of the original investment as is possible, and hold on to it for long term income.
Additionally, we currently have a single family home in Rocklin, Ca, a couple condos in Carmichael, Ca, and a house in Fair Oaks, Ca on the market for sale. Within the next few weeks we will also be placing a single family property in Santa Rosa and a single family property in Sonoma on the market for sale. Investors or potential investors are welcome to tour any of these properties as an example of the workmanship of our contractors.
Moving into the new year we have several offers out on properties and a couple different properties in contract but do not yet know if we are moving forward on any of them or not.
Funds: This portion of our business is currently Altus’ primary focus. Based on our review of demographic trends and investment fundamentals, our Funds are structured to provide strong long term, risk adjusted returns. Unlike with the Opportunity Knocks offerings, Funds’ invested money stays invested and obtains returns consistently over a longer time period, providing better actualized returns. We currently have two funds that are active, both of which are outperforming initial proformas.
We are excited about our new Altus Multi Tenant Income Fund which is focused on purchasing, repositioning and holding multi tenant buildings for long term cash flow and appreciation. We chose this particular area as a fund focus due to the population growth (California added over 300,000 people in the last year alone), lack of construction, and construction costs that are increasing much faster than incomes. In the Altus Multi Tenant Income Fund the investor receives a preferred 8% annual cash return prior to Altus receiving any compensation (this is consistent with all of our fund structures). Total annual returns are forecast to be considerably higher. Additionally, the investors receive 100% of the depreciation associated with the asset purchases, resulting in a large percentage of cash returns being distributed with taxes deferred until the point of sale (at which point it will be taxed at lower tax rate). We are currently meeting with interested investors to present the entire investor package and taking subscriptions agreements. Reservations for the fund are taken on a first come, first served basis and there is a limit to the amount of investment funds we can accept. As a reminder, Fund investors get the first opportunity to invest in Opportunity Knocks projects.
Hard Money Lending: We are currently working on two different hard money loans for borrowers located in Northern California which will be used for the purchase and rehabilitation of a single family residence. It appears that we already have investors lined up to do the loans, but will reach out to our database if for some reason the current investors are not able to proceed.
If you do not currently receive our Opportunity Knocks emails with specific investment deals or have interest in discussing any of the above business lines in greater depth please respond to this email or contact our office at (707) 932-5887. We will happily add you to our distribution list and/or schedule an appointment to discuss your investing needs further.
I look forward to working with you on future investments with Altus.
Best of investing luck in the New Year.
Altus Equity Group, LP