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Investment Approach

 

Pineheron Investment, Development and Asset Management provides investors access to institutional grade, direct property investments. Opportunities are presented on a deal-by-deal basis offering investors access to a diversified, income-producing, tax-efficient real estate portfolio. Our disciplined investment approach, institutional-quality reporting and comprehensive underwriting provide investors with a fully transparent real estate portfolio.

Acquisitions

Mult-Family Investment Criteria

 

Transaction Size:
• $3M – $25 Million
• Minimum 100+ Units

Asset Type:
• B to C+ multi-family properties.
• Prefer B properties in A markets and C+ properties in A/B markets.

Occupancy:
• Prefer stabilized properties.
• Will consider lower occupancy if property is well located and has value-add upside.

 

Age:
• Preference is 1978 and newer.

Target Markets:
• Nationwide growth and Emerging markets

Location:
• A+ to B areas with strong demographics and economic diversity

Target Return and Investment Period:
• 12%+ cash on cash return (20% IRR target)
• 3-5 year hold period

General Criteria:
• Potential high yield income streams
• 20% below replacement cost

Repositioning

Pineheron Investments and Asset Management buys well located properties that are in good structural condition with a value-add component. We look for opportunities to increase rents and reduce expenses by finding properties that have some deferred maintenance, poor management or distressed sellers. By correcting any deficiencies and making cosmetic and management improvements, we are able to increase the net operating income (NOI) of the property and create substantial cash flow and appreciation. At the same time we are creating clean and safe environments that our tenants are proud to work or live in.

A typical project will require a 6 to 12 month period to make capital improvements, upgrade the tenant base, increase rents, and reduce expenses. At that point cash flows improve significantly and appreciation begins to increase rapidly. Once these improvements have been made we stabilize the property for another year or two and then refinance or sell the property. The entire process is usually 3 to 5 years.

Another reason for our success in repositioning is our property managers. We use only the best on-site managers with proven track records of improving property performance. Our managers think like owners – increase income, reduce expenses, maintain a clean property, and keep tenants happy. These are the true keys to success in this business.

Land To Develop

• Land area: 1 acre minimum
• Number of developable units: 20 minimum; 500 maximum.
• Property type: raw land or property already improved as townhomes, apartments, retail, commercial, agricultural, or special purpose (for already-improved land, the business plan would be to scrape and redevelop with townhomes or apartments or keep existing improvements and build on additional available land which is currently not being utilized or is being under-utilized, e.g., as parking).
• Strong locational qualities with significant visibility, easy access, in-fill, and located along traffic corridors.
• Development densities ranging from garden communities at 16 units per acre to 4 stories over 2-level parking at 45 units per acre.

Investing With Us

Pineheron is an urban real estate investment, development and asset management firm. It is a privately held investment firm and our offerings are made under Regulation D Federal Securities Laws. We accept investments from accredited U.S. investors and certain offshore (non-U.S.) investors. Pineheron makes priority preferred payments to all investors quarterly. Once we have qualified an investor, we can provide a deal sheet with detailed facts and financials for each specific property available. Please contact us for details and assistance.

Offshore Investors

We work closely with our offshore investors and have a sophisticated structuring method to mitigate U.S taxes including FIRPTA tax rules. By using our British Virgin Islands Holding company, offshore investors have no U.S. tax filing requirements.

IRA Investors

We can provide assistance to investors who wish to use their IRA’s to make tax-deferred real estate investments. Gone are the days when your only choice was to invest your IRA in mutual funds or ETF’s. Using a self-directed IRA, you can now make direct property investments in your tax deferred account. Please contact us for details and assistance.

Trust, Transparency and Performance

Trust is the key pillar on which an investment is made. At Pineheron, we work to earn and renew our partner’s, client’s and investor’s trust every day. It is both the basis and the pulse of our operating model. We believe that aligning the interests of general and limited partners is one of the cornerstones in building trust.

We are performance based and expect to be compensated for success – not promises. Investment performance is what the general partners aim for and our investors always come first. We offer cumulative preferred returns assuring that our investors earn their return before we get paid. None of the partners are on salary – we are paid based on finding, operating and successfully managing the exit of each investment.

Pineheron is an opportunistic investor and does not speculate. Operational cash flow is the “insurance” in a real estate investment. We select properties that are cash positive to begin with and then as value added investors, we take an active role in the management of every asset to increase its revenue stream. As market opportunities and cap rates change, Pineheron’s acquisition focus will be adapted to new growth regions and market segments.

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