Trends Watch: January 3, 2019

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.

This week, Elana talks Kari Jones, President, Consilium Multifamily Opportunity Fund, LLC.

Why do you believe investing in Texas presents the most attractive investment opportunities?

Texas has a consistently very strong real estate market. The job growth and opportunities available here are diverse and ever expanding. While the major metro areas are interesting and thriving, there is also strong growth in secondary and tertiary markets. Major universities like Texas Tech, Texas A&M, University of Texas and University of Houston continue to grow and expand throughout the state, bringing top talent and diversity to an already dynamic backdrop.

What is the most interesting trend or key issue you have seen in 2018?

Crowdfunding is growing at an accelerated rate. Crowdfunding provides direct access to a range of vetted, institutional-quality commercial real estate (CRE) opportunities and all the online tools needed to manage those investments. This business model provides investors the ability to diversify their portfolio with the 3rd-largest asset class and one known for its stability.

Five years ago, investors were limited in their ability to access CRE investment opportunities. Today, crowdfunding has given hundreds of thousands of investors the ability to confidently invest in commercial real estate, earning returns that, in some cases, have exceeded 22%.

Do you remember a specific experience (e.g., could be related to a deal or a property strategy, etc.) where you wish that you had done something differently? If you were to do it over, what would you change?

I think the main thing with each deal is you MUST put the investor first. We’ve worked with seasoned investors, family offices, wealth advisors and intermediaries. Each brings a unique financial profile, circumstances and desired outcomes. What we’ve learned is that the investment decision is typically a personal one. Some investors are focused on growth and some investors are interested in income. Sometimes you have to provide education regarding even the most basic terms. It all comes back to the investor and what is going to fit their financial needs.

I’d like to follow up on that previous question. On the flip-side, and without giving away a competitive advantage, what is a practice that you have implemented that you think everyone in your space should be doing, and why?

DUE DILIGENCE! Don’t believe the marketing documents and build your own financials. Walk the property, talk with the management staff, talk with tenants when appropriate. Drive over at 11pm and park across the street to see what happens at night. Come back and park at 7am to see how people are getting to work and making sure their families are squared away for the day. Providing value through aesthetic improvements is important, but sometimes, it’s the little things that go a long way into attracting and maintaining quality renters.