Investment Strategy

ProWealth Capital’s core mission of protecting our investment partners’ capital begins with our sole focus on multifamily properties. The firm’s strategy focuses on improving Class B & C apartment communities in secondary and tertiary markets nationwide. Historically, multifamily has been the least volatile real estate asset class during downturns while still offering strong upside potential during up cycles. Within multifamily, Class B & C provides one of the most attractive investment opportunities due to the imbalance between the strong and growing demand and limited new supply of these units.

Value-Add:

Our core focus is on value-add opportunities. These assets are typically well occupied at takeover but the units rent below market value or the asset has a clear value-add play, such as implementing utility bill-backs to tenants. By implementing revenue-generators, curing deferred maintenance, while adding and improving amenities, and taking steps to improve property appearance, rents can continue to increase, thereby generating substantial cash-flow for investors. A typical value-add play will add $10,000-$15,000 per unit to the rehab budget.

Stabilized:

To be considered a stabilized asset, buildings have typically been well maintained and have report high occupancy at takeover. These types of assets characteristically provide strong cash-flow from day one, and have an opportunity to increase their value through moderate interior upgrades. The rehab budget is typically on $5,000-$10,000 per unit for this type of asset.

Distressed:

A distressed project tends to have a lot of deferred maintenance and naturally suffers from high vacancy. With a strong rehab budget, these assets can typically be turned around and brought back to stabilization within 12-24 months; at that point, they will provide substantially increased cash-flow and amplified value to investors. The typical rehab budget per unit for this type of project is between $15,000 to $20,000 and can go even higher, depending on the market location.

Successful Investing comes down to 4 vital criteria: We need the right investor, the right property, in the right area, at the right time.

THE RIGHT INVESTOR

Accredited Investors that earn $200,000 a year, a household income of $300,000 or have a $1,000,000 net worth, not including your main residence.
Investors that want to be part of a experienced real estate investment team
Investors that that want to create financial freedom through real estate.
Investors that understand the power of passive income

THE RIGHT PROPERTY

Multi-family properties that are 50+ units
Multi-family properties that range from $5MM – $40MM
Multi-family properties that have “Value Add” components providing significant cash flow opportunity
Multi-family properties that are in emerging markets (great job and population growth)
Multi-family properties that provided a 7-10% cash on cash return and a minimum DSCR (Debt Service Coverage Ratio) of 1.25
Multi-family properties that are in C- to B+ neighborhoods and condition

THE RIGHT AREA

Job Growth: Is the local government committed to attracting businesses and making it easier for them to grow and add jobs?
Population growth: Are there attractive reasons why people would want to uproot their lives and families and move there?
Rents are continually rising: Are rents continuing to go up as more jobs are created and more people move into the area?
Property values are consistently going up: Have property values shown a consistent trend of increasing over time and with the other three criteria above are they projected to continue rising?

THE RIGHT TIME

Right before explosive growth begins
During the middle of a steady climb in property value in the area
Right before a large company commences operations in the area, creating more opportunities and more jobs
During the time when a property has deferred maintenance and poor management, making the price lower and the opportunity greater
Right before a property hits the market

PATH OF PROGRESS STRATEGY

Acquisition:

We pride ourselves on the relationships we have built with brokers in strong and vetted real estate markets to get their “pocket listings” as well as the partnerships we have with financial institutions to obtain access to bank owned properties (REO) that are far under market value. Each asset undergoes ProWealth Capital’s thorough and exhaustive due diligence process to ensure it is the right property, in the right area, sat the right time.

How we work:

Selecting an asset is at the heart of ProWealth Capital’s success. As we say at ProWealth Capital, “Finding a property for sale is not our goal. Finding the right property, in the right market, at the right price, IS our goal.” After locating the ideal property, we speak with investors, just like you, to see if the particular investment venture is correct for them and fits within their investment goals.

Identifying investors for us is not about looking for people that simply have the funds to invest, but rather who share our philosophy and are the right fit for multi-family investments.

Multi-family investments are not a short term investments. There is a 3-7 year commitment that can provide payouts north of 20% as an annual return. This is a strategy of patient, methodical and meticulous investing. In the acquisition phase, ProWealth Capital is looking for properties that can be sold in 3-7 years for an annual return of 15% or greater.

The primary goal of ProWealth Capital is to preserve the initial capital outlay of its investors while providing greater than average cash-on-cash returns. We do this by investing in value add, B & C rated, emerging market neighborhoods that offer multi-family apartment buildings in a position to appreciate within 3-7 years. We purchase the units with an exit strategy already in place. Historically, multi-family apartment buildings have been the strongest and most reliable real estate investment, due to their ability to remain strong during economic uncertainty. When real estate markets crash, often multi-family investments become more lucrative due to people’s increased desire to rent.

The trend speaks for itself. Millennials typically want to rent, rather than own. Due to the limited supply of multi-family properties, the future holds a rental market shortage which makes the se properties we secure even more valuable and a more powerful of an investment vehicle.

MULTI-FAMILY REAL ESTATE INVESTMENTS

Enjoy passive real estate income without the hassle of management.