Our returns consist of two parts.
Our trusted cash flow formula guides our team.
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.
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
- 7% (based on current financials)
- 3-5 year hold period (short to medium- term)
- Potential high yield income streams.
- 20% below replacement cost.
- Value-add opportunities sought.
- 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.
- $1 – $20 Million
- Minimum 100+ Units
- 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.
- Prefer stabilized properties. Minimum 85% occupancy. Will consider lower occupancy if property is well located and has value-add upside.
- Preference is 1978 and newer, but will consider all age properties.
- Nationwide growth markets.
- B+ to C+ trade areas with strong demographics and economic diversity.