Our bread and butter is single-family, high-end residential deals in need of reconstruction (commonly referred to as the value-add deal). However, we also focus on single-family ground-up developments, too.

Both types of deals are directly sourced and developed by our family business. Our competitive advantage consists of in-house architectural design, disciplined cost control, advantageous price sourcing of incredibly expensive materials (marble, parquet, etc), and favourable arrangements with general contractors. All of these lead to a very high profit margin on project cost.

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Additionally, we also participate as lenders (private debt instruments) in small and medium-sized residential developments. We are always on the lookout for:

• An experienced general partner
• A successful long-term track record
• Development of an in-demand product
• Highly desirable residential location
• Only projects that aren’t highly levered
• Developers with multiple exit strategies

Perhaps the key reason we have never lost any money in real estate is our disciplined approach to following “the two golden rules”, which protect our capital with an ample margin of safety.

You can change much about a property, but there are two factors that you can never change: the location of the property and the purchase price you pay for it.

We exercise extreme discipline in following both of these “golden rules”. Let’s consider both of them:

1. Location: As the adage goes, “real estate is all about location, location, location.” A prime location is what gives the high-end residential property its competitive advantage and high quality. The barriers to entry on these types of properties are very elevated, and structural challenges make it perplexingly difficult to add new supply. Hence, these locations end up appreciating faster than 99% of other dwellings in the long run.
2. Price: While the location is incredibly important, not overpaying for the property is just as crucial in achieving great investment returns. That is why we are always on the lookout for real estate deals that are either in owner distress (a need to sell quickly due to financial, family, or other issues), or deals that happen to have property distress (the amount of work needed to repair the property is too complicated or costly).

Our investment process is very simple and grounded in common sense (which seems to be very uncommon in real estate).

We often keep our debt levels below 50% LTV, and at times, we may not carry any leverage at all. We don’t overcapitalise or exceed our construction budgets, we don’t overpay for deals, we always keep an ample cash buffer in case of a downturn, and our construction contingencies are always higher than the industry standard.

As Albert Einstein wisely stated, “Make everything as simple as possible, but not simpler.”

We have a meaningful family net worth exposure in carefully selected real estate opportunities. Are you interested in partnering with us in future deals? Please get in contact.