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OUR INVESTMENT CRITERIA

We employ the following criteria to find undervalued multi-family residences for acquisition, value add opportunity, management and minor reposition.

Market Segments

Age: The 18-35 year old market segment is 22% of the U.S. population
Income: Renters who earn $40,000 or more annually
Price: Where rent is 30% or less of the median income
Retiring Baby Boomers are scaling down and enjoying maintenance free multifamily living

Property Criteria

Multifamily residential apartments
Pitched roof construction preferred
Occupancy above 80% with the exception of properties that require renovation, providing properties are well located and present value-add opportunities

Target Values

Size and Price: 50+ units in the $4MM – $50MM range
Returns: 7-10% Cash on Cash, Minimum Debt Service Coverage ratio of 1.25
Type: C- to B+ properties located in C- to A areas
Property Vintage: 1975 or newer
Location: Emerging market areas with indicators for strong near and long-term economic growth

Gold Grade Capital’s exclusive emphasis on multifamily properties is centered around our foundational objective of preserving investor capital. Our objective is to improve Class B and C housing units in secondary and tertiary markets around the country. Multifamily has historically offered the most upside potential during upcycles while also being the least volatile real estate asset type during downturns. Because of the imbalance between rising demand and restricted supply of these units, Class B and C multifamily presents one of the most appealing and asymmetric asset classes.

Investment Strategy

Emerging Markets

We identify emerging markets in the US by conducting in-depth research and analyzing a variety of variables. We conduct a comprehensive market study in search of key market factors such as:

• Population growth (People are relocating to the area rather than exiting)

• Job growth (Jobs are being produced as opposed to being lost.)

• Rental pricing and home value increases.

• Master plans for growth (Local administration commitment to attracting new employment)

• Demand increases (Markets are beginning to absorb excess supply)

Strategic Value Add

When our team acquires an asset, we tend to view the property more like a living breathing company than just an apartment building. Just like a normal company, the value of the asset increases with the amount of income it produces.

So when we buy an apartment building, we are specifically looking for opportunities generate more revenue and lower expenses in a multitude of different areas.

VALUE ADD OPPORTUNITIES WE SEEK:
• Owner self-management (usually equates to poor management)
• Sub-optimal oversight of management firms
• Delayed maintenance
• High Vacancy Rate
• Rents below market

Revitalization Strategy

At Gold grade capital, zeroing in on zones where revitalization is taking place in the area is a major focus of ours.

WHAT WE LOOK FOR:

• Property values quickly rising.

• Growth in the number of families coming into the neighborhood

• High rate of construction.

Placing a major focus and honing in on this strategy has allowed for high profit multiples across our portfolio.

- Why Invest With Us -

Cash Flow

We pay our investors their distributions once all expenses are paid.

Tax Benefits

Depreciation is a tax write-off that enables you to keep more of your profits.

Leverage

We take advantage of our banking relationships allowing us to leverage $10M of real estate with only $2.5M.

Security

Multifamily continues to perform better than conventional stock-based investments because of its low volatility.

- Tells Us About Yourself -

We’d love to share new offerings with you and begin a conversation about partnering with Gold Grade Capital.

OUR FOUNDERS

MULTI-FAMILY REAL ESTATE INVESTMENTS

Enjoy passive real estate income without the hassle of management.