Context: Over last many decades, individual domestic and international investors in US are able to pool money with other reputable investors (institutions/ Funds) to collectively buy a large commercial (apartment) property. This includes buying all of the apartments in the society building – not just one or a few apartments.
Multifamily Homes: Apartment blocks in US are also referred to as Multifamily. The term Multifamily generally mean a large property having more than 5 individual family units. Think Apartment complexes or societies in India with typically 50+ units as equivalent of Multifamily.
Some examples of Multifamily Homes:
At Praxium Capital, we act as the sponsor / “General Partner” with local presence in US and representatives in India for buying Multifamily Homes.
Investment Thesis: Value of Apartments are based on cash flows (also known as Net Operating Income) and not based on market values. Loans are based on the property’s cash flows and not on your income or credit. Lenders scrutinize each property in great detail, helping protect investors. We invest in Multifamily Homes with great cash flows and work towards improving them further.
Our local team in US finds attractive property, raises money from individual investors (including high net worth investors in US & Europe) and institutional investors to buy the whole apartment property/ Multifamily homes.
Investors Role: As an investor / Limited Partner, you don’t manage the property. We handle everything, including finding tenants, maintenance, and making sure the property is profitable. We have a team on every deal; we partner with high quality local property management companies in states such as Texas, Georgia, Arizona and Florida. We let the professionals manage the property and a separate team oversee the asset.
In return for your investment, you receive a share of the profits. These profits can come in two forms: 1) Rental Income: The tenants pay rent, and you receive your share of that rent income regularly. 2) Property Sale: When the property is sold after a few years (say 3-5 years), you get a share of the profits from the sale (this is called long term capital appreciation).
