Our philosophy and strategy
Invest in well-located properties with conservative loan amounts that not only provide cash flow (i.e., return on equity) but allow the property owner to take out equity prudently to acquire additional properties. We believe that a 3% to 4% return on equity reflects a conservative but acceptable level. For instance, an investor with equity of $13 million and a return of about 3% will realize a cash flow of almost $400,000, which is treated as unearned income.
This disguises the real return, which is significantly more. A 4% appreciation rate on $25 million represents a $1 million return—which happens while you are sleeping. The combination of $1 million and $400,000 adds up to more than a 10% return on equity.
A consistent and knowledgeable plan of investment action will reap rewards in good and bad times.
