Private Lending hiccups

Japan and several of European countries around the globe got sucked into the negative yield vortex – interests rates dipped into negative territory. Depositors over there are paying financial institutions to safe-keep their money. Faced with inflated prices across asset categories, good deals in commercial real estate are harder and longer to come by these…

Pick the right jockey

Qualifying a Sponsor lies within the larger picture of a passive investors’ overall portfolio allocation strategy. By that I mean before rushing off to vet Sponsors, consider how you want to allocate your portfolio (paper securities v. physicals) and then for the physical portion think how you want to divide up the rest of your…

Partnering

Imagine you are trying to buy a piece of real estate. Imagine it was a 20 unit multifamily, and you think the numbers are solid and you believe it would be a good investment. But you have a problem—you have no money. So you give up, thinking it was impossible. Instead you go about your…

Other commonly used return metrics

Let’s cover off two other private real estate return metrics, after looking at IRR from our last blog: 1. Cash-on-Cash Return The formula for CoC = (Annual net cashflow, before income tax) / (Total Cash Invested). CoC is usually represented in percentage. In the case of residential scenario, it would be a fraction where the…