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Most investors, even high net worth individuals, do not realize they can invest directly in real estate without an active participation in the acquisition and operations.
Both accredited and nonaccredited investors can invest with a firm like Lone Star Capital, which pools together investor capital to acquire large multifamily real estate. Lone Star Capital manages the entire process from identifying acquisition opportunities, arranging financing, managing property operations, and overseeing investor accounting and distributions.
These types of investments are superior to investing in a publicly traded real estate investment trust (REIT) since direct ownership of real estate offers greater tax benefits and returns.
Lone Star specializes in workforce housing which provides both compelling short-term and long-term returns through its strong cash flow as well as appreciation over time driven by the supply and demand imbalance of the asset class. This is caused by the growing demand of affordable rental housing in the country coupled with shrinking supply, since developers can only build multifamily communities at luxury price points to offset high construction costs.
Rob Beardsley, founder of Lone Star Capital, partners with investors all around the country, including high-paid tech engineers and product managers in his hometown of Silicon Valley.
Oftentimes, tech employees have stock portfolios that are worth millions of dollars from equity they’ve received from their employer, however they do not have a single asset that is producing cash flow. They are rich in net worth, but cash flow poor. Rob’s firm allows them to diversify their investments and optimize their portfolio.
Additionally, Rob notices that many clients appreciate the opportunity to invest directly into real estate to create a consistent, monthly stream of cash flow and diversify from their heavy exposure to public equities in the technology sector.
To help experienced real estate dealmakers and passive investors alike, Rob wrote The Definitive Guide to Underwriting Multifamily Acquisitions, which is the bestselling book on underwriting. Underwriting is the process of financially analyzing an investment to determine the optimal business plan, financing structure, and pricing. Proper underwriting allows investors to identify sound investment opportunities and avoid mistakes.
In addition to his book, Rob built an underwriting model which his company uses to analyze over 500 potential investments per year. Recently, Rob has made his underwriting spreadsheet available for download for free, which has been downloaded by thousands of investors.
The stock market has been making numerous all-time highs within the last year, causing investors to be concerned about a potential downturn. Rob Beardsley has seen a dramatic increase in interest from retail investors looking to take profits from the stock market and place them in a more stable real estate investment which offers monthly distributions.
On July 15, 2021, Lone Star Capital acquired a 262-unit apartment community in Houston, Texas. For this acquisition, Lone Star raised $9,000,000 of equity from its investor network in a matter of weeks, which Rob claims is both the largest and quickest equity raise in firm history.
Additionally, due to the tax benefits associated with direct ownership of real estate, investors in some cases can offset gains in other areas of their investment portfolio such as in the stock market utilizing depreciation, further optimizing their portfolio returns.
To learn more about Lone Star Capital’s investment opportunities, visit their website.
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