FREE DOWNLOAD!
Special Report: What’s the Best Investment?
We Simply do the work.
We acquire multifamily assets in prime locations by underwriting all qualifying assets in the markets we follow. This gives us great deal flow, allowing us to go after deals that meet our criteria. Using conservative underwriting and appreciation assumptions, we expect these opportunities to increase in the coming years.
Experience = Cashflow
As a seasoned real estate investor, my team and I have mastered apartment investing. We train our team to pay attention to the little things at the property level that makes the most impact.
Strong Emerging Markets
Our strategy is to patiently acquire, manage and operate multi-family and some commercial assets which generate high yields and passive cash flows. We selectively position ourselves to take advantage of opportunities on the horizon. In addition, we only target strong employment centers with growth and stability trends.
Our returns consist of two parts.
Preferred Return from Cash Flow:
Erbe Investments will only select investments that it pays a minimum average annual preferred return of at least 6% (depending on individual property this could be higher). Returns are paid quarterly via direct deposit or by check. Our priority is to pay our investors before our sponsors. This protects you, the investor, and ensures we only select projects with strong cash flow outlook.
Profit Share:
Upon a sale or refinance of a property our goal is to return 100% of the initial investment to each investor. Next, procedure calls for a 50/50 profit split between sponsors and investors, up to the point where investors doubled their annual return from the cash flow.
Our trusted cash flow formula guides our team.
Acquisition
Allows us to thoroughly analyze all qualifying deals in our targeted markets with only 2% – 3% qualifying for further review. This strict filtering process ensures assets that meet our conservative underwriting and focus on cash flow for investors get selected.
Managment
Our systematic team approach to performance, KPIs and people constantly elevates our communities to highest standards. This ensures predictable investor cash flow and appreciation.
Due Diligence
When on-site, our team of experts inspect and analyze on site all financials and the physical condition of the property to mitigate potential risks and uncover opportunities for our investors. Only qualified deals move forward.
Investor Return
Utilizing a cash flow centric approach, driving profits to the bottom line, while maintaining the asset. This positions the property for a proper and profitable exit for our investors. With return of equity and profits, our investors are now positioned to take advantage of the next acquisition.
Our Investor Partnership Process
- Complete the qualified investor form.
- We’ll review details and contact you.
- We’ll set up a time to talk about working together.
We structure our deals with asset protection in mind.
How we do it...
Erbe Investment Group believes in asset protection. Our SEC lawyers consult and prepare the necessary organizational structure, LLC’s, and Private Placement Memorandum (PPM). Our PPM has two types of shares:
- “A” Shares = investors
- “B” Shares = sponsors
This method ensures proper operational structure and documentation, which guides Erbe Investment Group in all decision making.
F.A.Q.
We primarily invest in multi-family apartment buildings and one of the most recession proof segments of the Real Estate market. This is true as the United States population continues to grow. Even with continued advancements in online marketing and “work from home” (which threatens office markets), people will always need residential solutions. Within this segment, we focus on B+ to C+ class multi-family properties yet prefer B class in A markets and C+ class in B markets. This strategy positions us in the segment of the market which is shielded from ups and downs that come with economic cycles. We will also review distressed A class deals in markets with 1MM+ population.
To qualify as an accredited investor: a person must demonstrate an annual income of $200,000, or $300,000 for joint income, for the last two years with expectation of earning the same or higher income. Individuals must have earned income above the thresholds either alone or with a spouse over the last three years. Or A person is also considered an accredited investor if he has a net worth exceeding $1 million, either individually or jointly with his spouse excluding personal home.
We have relationships with the vast majority of commercial brokers in the Central and Southern United States. These brokers bring us deals often before they hit the open market. [We also occasionally engage in direct marketing campaigns and are constantly building relationships with banks to get access to their REO inventory.] Once presented with an opportunity our team underwrites every property to the highest standards. This eliminates any unfavorable or questionable properties.
Great news! You will be limited liability owner of the property which comes with all the benefits like depreciation and cash flow. Meaning the property is owned by a “Property LLC” for which that property is the only asset (reduces liability). You in turn will be a direct shareholder in this “Property LLC” which allows for a direct flow-through of cash flow and depreciation. Furthermore, upon sale of the asset, you will realize long term capital gains… PLUS, you literally get to tell your friends you “own” an apartment complex, because you do!
All Erbe Investments Private Placement Memorandums are based on individual properties. Every property is different and will offer different returns. Our current investors are currently realizing between 6%-8% preferred cash yield annually. The expectation is to double this return upon the sale or refinancing of the property. We project the overall investment life-cycle returns to be 18-20%.
Apartment Acquisitions Criteria
CAP Rate:
- 7% (based on current financials)
Investment Period:
- 3-5 year hold period (short to medium- term)
General Criteria:
- Potential high yield income streams.
- 20% below replacement cost.
- Value-add opportunities sought.
Property Criteria:
- Utilities: Individual metered units preferred.
- Roofs: Pitched roof construction preferred, but not required.
- Premier Properties: Stabilized properties with minimal deferred maintenance preferred, but will consider others if well located and possessing a strong, value-add opportunity.
Transaction Size:
- $1 – $20 Million
- Minimum 100+ Units
Asset Type:
- B+ to C+ class multi-family properties; Prefer B class in A market and C+ class in B market opportunities. Will review distressed A class deals in markets with 1MM+ populations.
Occupancy:
- Prefer stabilized properties. Minimum 85% occupancy. Will consider lower occupancy if property is well located and has value-add upside.
Age:
- Preference is 1978 and newer, but will consider all age properties.
Target Markets:
- Nationwide growth markets.
Location:
- B+ to C+ trade areas with strong demographics and economic diversity.