Real estate

We have been investing in residential real estate on two continents (Australia and Europe) for almost 20 years. Over that time, our family business has thrived despite the economic cycle going through various booms and busts. 

We have gained real estate exposure via both equity and private debt, which has bolstered our experience and refined our edge. Our perfect track record — with not a single failed deal — speaks for itself.

Our bread and butter is single-family, high-end residential deals in need of value add. These deals are directly sourced and developed by our family business. Our competitive advantage consists of in-house architectural design, cost control via the sourcing of expensive materials (marble, parquet, etc), and favourable arrangements with general contractors resulting in very high-profit margins.

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

  • an experienced general partner
  • successful long-term track record
  • developing an in-demand and attractive product
  • highly desirable residential locations
  • projects that aren’t highly levered
  • 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 that protect our capital with an ample margin of safety.

You can change much about a property, but there are two things that you can never change:

1. the location of the property
2. the purchase price you pay for it

We spend a painstaking amount of time making sure we don’t fail at either of these points. 

As the old 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.

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 will cost too much).

We keep things very simple. We often keep our debt levels below 50% LTV and at times we may not carry any leverage on a deal. We don’t overcapitalise or exceed our construction budgets, we don’t overpay for deals, we always keep an ample 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 to partner with us in future deals? Please get in contact.