Capital Asset Properties, LLC. is a private real estate investment company. We invest in income-generating properties or development projects with the potential to generate significant short and long-term returns.
Capital Asset Properties’ Goals
To invest in undervalued real estate assets in rapidly growing markets generating long term annual ROI’s of 15% – 30% for income-generating properties or 40%+ for development projects.
We Search for Undervalued Assets in Inefficient Markets
- Our strategy is NOT to compete with traditional commercial real estate investors wherever possible.
- Our markets are normally “peripheral” to major metropolitan areas
- Our assets are usually single-family, small multi-family or vacation properties that are not the focus for large traditional commercial investors
- Our target geographies typically have significantly above-average growth potential (rental and/or price appreciation) with below-average asset values
- Single-family residential real estate has not traditionally been targeted as an institutional asset class.
Single-family residential real estate has not traditionally been targeted as an institutional asset class. The reason is that there are high search and transactions costs associated with acquiring homes for values less than $10 million. Institutions prefer to deploy amounts of $25-$100mm or more.
There are over 70 million single-family homes in the US vs. an estimated 500k apartment buildings. Thus the probability of finding a “mispriced” asset in one market vs. the other is 140:1.
There is also significantly more competition for larger multifamily assets. The probability of finding inefficiencies is inversely correlated to the size of the asset.
To illustrate the consequence of this, cap rates (income (NOI) / value) for institutional class properties in the U.S. are often 200 to 500 basis points less for equivalent assets by quality.
CAP Tax Strategies
CAP TAS LLC works with partners to acquire historic real estate in urban markets that have significant tax and other incentives available to them. We focus on helping taxpayers use their tax liabilities to fund investments in real estate projects with targeted federal, state, and local incentives.
Accredited Investors invest in projects to receive the economic and tax benefits generated by the government promoted tax programs. CAP and our partners work with investors to Identify the tax incentives that will benefit them within our business model.
Our investments encompass unique tax minimization strategies via IRS Code Section 170(h) allowing taxpayers to invest in select historic real estate with non-discretionary funds (money one would otherwise use to pay federal tax liability). The strategy offers an attractive yield via tax benefits in 2018, along with a cash flow residual from the real estate. The net result is the government funding your investment via federal income tax relief.
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