CORE Real Estate Asset Fund
Mission for the Fund
The CORE Real Estate Asset Fund (“Fund”) takes careful aim at investment opportunities where the underlying real estate is good, but where the target property has a problem that is readily correctable using the skills and other resources that the Fund has at its disposal. In this way, the Fund can generate good profits with a manageable level of risk.
Opportunity for the Fund
This Fund has been specially designed to take advantage of the unique downturn in the real estate market place that has occurred throughout the United States. In particular, Florida has suffered more losses than others because of heavy speculation by investors. The Fund will take advantage of the depression in these markets and other markets by finding properties that meet specific profit-generating criteria.
The fund will target medium term investments, such single family homes and multi-unit apartments which exhibit characteristics of distress. Ideally, projects that can be acquired then re-positioned and sold at a good profit in under three years.If our management team can correct the underlying asset, then we will add value by rehabilitating the property, thereby creating substantial appreciation. However,in the short run as the Fund is ramping up, a strategy of executing a similar plan on smaller properties in even shorter increments will be implemented.
For example, the Fund will initially invest in residential projects such as single family residences that have the ability to be turned over quickly so that rapid increases in the equity of the Fund can be created. These properties are likely to be found in areas that were the most speculative, such as South Florida. Because of the prior speculation, these markets swelled the most and now, market values in these communities have dropped the most precipitously. The biggest anomalies in the marketplace exist in these markets because there has been so much investment turmoil and confusion.
The ability to turn properties over quickly – whether residential single family homes or multi-family apartment buildings – for solid profit by adding value in simple ways (such as cosmetic rehabilitation or financial fixes such as are finance) can result in high rates of return. The Manager of the Fund has access to these types of properties.
The Fund is primarily looking for situations where there is owner distress, which means that the owner has problems that need to be addressed. For example, the owner might be dealing with either financial distress from a lender (i.e. foreclosure), or a personal trauma, such as divorce.
Secondarily,the Fund is looking for opportunities with building distress. These are typically situations where tenants have taken advantage of the property. Broken windows, stolen toilets, or other types of superficial damage can be quickly and inexpensively repaired by a team that is competent in rehabilitation. The CORE Capital team has this specific expertise bringing “turnaround” and rehabilitation profits within our reach.
The discounts for properties that have these types of problems are deep and, with our talented crew of property managers and property fixers, we can rehabilitate these properties quickly so that we can re-market and sell them quickly for good profits.Although the longer term goal of the Fund is generally to acquire apartment buildings and shopping centers that are distressed, when the Fund is smaller and just getting started, the CORE Capital team will focus on flipping (buying,fixing and quickly reselling) single family residences, duplexes, and condos if appropriate. Buying smaller properties also allows the Fund to implement an”all cash” purchase strategy which will take advantage of the economic conditions by closing on properties quickly. This is another strategy that will allow the fund to optimize its profit opportunities.
The CORE Profit Formula