Why Apartments are Such a Good Investment
- Real cash flow and earnings
- Housing is a necessity
- Strong operating margins
- Attractive demographics
- Minimum volatility
- Strong risk displacement
- Inflation hedge
Acquisition Criteria
Allmark, Inc. is aggressively seeking the acquisition of Prime "Class B" apartment properties in the Inland Empire market of Southern California , as well as the Dallas and eastern Texas market and the Bullhead City area. Targeted properties will have a minimum of 100 units. Allmark does not invest in turnarounds, troubled projects, or government subsidized housing. Allmark seeks multi-family housing communities in high-demand, well-maintained areas.
Current Opportunities
We are currently under contract to purchase two large apartment communities in the Dallas market. Totaling 500 apartment units, this investment projects very favorable cash flow, estimated at nearly 6.3% Year 1, averaging nearly 16% over 9 years. If you are interested in reviewing a investment package, please contact us at : info@Allmarkproperties.com.
Cash-on-Cash Returns
Allmark evaluates each acquisition on its ability to yield annual cash flow returns of a minimum of 6% to 7% on invested capital. For many years of ownership, the distributions you will be receiving will be tax-free , since they are considered a return of capital. Therefore, a 6% to 7% cash distribution is the equivalent of a 10.2% to 11.8% taxable return on an alternative investment (assuming a 41% tax rate).
With a refinancing of the existing mortgage in year 10 of the investment, the average annual cash-on-cash returns increase to 15-20%, and you still own your investment.
Although past results are no guarantee of future performance, we are very proud of our track record. For properties for which we were the general partner as of December 31, 2007 , our limited partners earned a cash-on-cash return over the past five years of an astounding 52% per year.
Basis for Valuation
In the current market of low-cost debt financing, we attempt to leverage our equity, while being mindful to cover requirements for debt coverage. Typically, we will not finance more than 70% of the fair market value. We are conservative and prudent investors.
Applying a capitalization rate to net operating income is a good beginning point to determine value, but must be supplemented with more in-depth analysis to derive a price that will allow us to properly manage the project and achieve our financial goals.
We perform a thorough financial and operational analysis of the underlying property to gain a comprehensive understanding of the cash flow drivers. We interview property staff, as well as competitors. We visit the property several times and send various members of our staff to gain different insight into the property. Our financial model allows us to evaluate many “what if” scenarios involving assumptions for rent increases, vacancy, expense behavior, capital expenditures, and many other variables.
Principals
The principals of Allmark have extensive backgrounds in financial and real estate investment, management, and operations.
Brokerage Cooperation
Allmark is a licensed corporate real estate broker in the states of California, Arizona and Texas . We will fully cooperate with other licensed brokers who are active in assisting us in our progress.
Additional Information
If you are a broker, principal, lender or potential investor and would like to speak with us about Allmark, please contact us at: info@Allmarkproperties.com.
