Exciting New Investment
with annual 12-14%+ yield target
in Calgary, Alberta
5% annual cash distribution option (or 6% DRIP units)
Through wise investing and prudent fiscal management, a very realistic 12-14% cash-flow, equity, value upside & mortgage paydown target per year is still achievable even in today’s often frothy real estate market and economic climate. We offer an investment formula with a proven track record, and a management team with the right mix of experience and innovative thinking.
Note: the investment below is NOT a guaranteed investment. Please read subscription documents and risk acknowledgement forms carefully. Accredited investors only, or friends, family and close business associates of the director, Thomas Beyer. Not RRSP nor TFSA eligible. Not a guarantee ! Minimum hold periods and minimum subscription amounts apply.
Target 12-14% yield
5% annual cash distribution option (or 6% DRIP units)
cash-flow, equity growth & mortgage paydown
We own a well located, impeccably managed 120 unit building in Calgary, Alberta with a brand new, CMHC insured 1.46% mortgage. While many are wondering how to participate in today’s cheap money induced often frothy Canadian real estate, there are some great value plays in Alberta.
ROCK BOTTOM PRICES IN ALBERTA
WITH TREMENDOUS UPSIDE POST-COVID.
– Low vacancies
– Reliable cash flow
– Resilience to economic shocks
– Reliable value increase through rent increases and in-migration
– Cheap mortgage terms – we secured a 1.46% CMHC insured loan
– Decent CAP rates
– Low repair and maintenance bills as the asset is well maintained already and well known to us
This Calgary, AB asset offers medium & long-term term rental upside – and thus value – upside. Cash flow, plus mortgage pay down, and value upside potential in time will make this an attractive opportunity, independent of the stock market gyrations.
Alberta has had a lot of negative news during the last 4-5 years and therefore has fallen out of favour with investors. However, in our opinion the real estate market has finally bottomed as have rents and occupancy as proven by our numerous apartment buildings we used to and/or still own and/or manage. We love a value play and buying when the market is at the bottom of the cycle has served us well as successful real estate investors over the last 20 years.
We are now expecting signs of green shoots everywhere; new hiring, retails sales up, car sales up, new home sales up, and prices beginning to show positive trends.
We believe the time to invest is NOW – not once all the pandemic induced restaurant & small biz closures are behind us in fall of 2021 or into 2022 in Alberta !
Invest when there is still some pain !
We have conducted an exhaustive search for bargain priced larger buildings across Western Canada. While there’s no shortage of availability, most are overpriced in our opinion with 3-4% or often sub 3% CAP rates. Over $150,000/pad is normal now in large urban centers, often priced as redevelopment land even. CAP rates have fallen, while unmotivated sellers with exaggerated price expectations abound.
The United Conservative Party in Alberta has already overturned the economically disastrous NDP from office in May 2019. As such, the time to buy is now, not when substantially positive momentum has already returned to Alberta due to Covid exuberance and perhaps a much firmer oil pipeline stance to BC to lower the WCS-WTI differential by 2022.
We negotiated our deal as some investors wish to exit despite these rock bottom values !
The anticipated exit strategy & overall strategy of this deal is this: we sell in 5 years or re-finance and allow you out, or you continue.
We’ve learned some things from our $250M+ in real estate transactions across multiple projects over the last 20 years. Specifically, one needs to keep upfront fees and ongoing management fees very low in a muted market to achieve a decent yield. This LP its structured with a 80/20 split on cash distributions for the Limited Partners and General Partner. It is designed as a tax advantaged long term yield & upside play. We see this split as a win-win structure / deal for all concerned.
A portion of the required equity contribution is currently reserved. We are making the remaining equity available on a first come first served basis to our past and current investors initially. We anticipate that it will be sold out well in advance of our closing date, which is currently mid June 2021. It’s therefore important that Prestigious Properties investors indicate their interest as soon as possible to secure their allocations. Minimum investment $50,000 – for Accredited Investors only.
This Is Our 8th Multifamily Real Estate Investment Limited Partnership Offering
We have made money for our investors time and time again. And we’ve often exceeded the ROI target that we are using to attract new limited partners like yourself today, namely 5% yield with 6-8% equity growth/mortgage paydown on an annualized basis. We are just being exceedingly cautious in today’s world economic climate in a recovering Alberta market into 2021/2022. Mobile home parks as well as multifamily/apartment building real estate provide reliable cash-flow and very low vacancies even in economically uncertain times, plus steady, predicatble mortgage paydown plus value upside.
Above Board Philosophy With No Inflated Going-In-Prices
We take great pride in our corporate philosophy of sharing a wealth of information with our investors and being very up front about investment prospects and performance. For instance, unlike many other LP offerings we do not inflate going-in-prices of properties we purchase and as such, the general partners do not make a return on investment until the limited partners do.
How We Historically Have Invested
- Focus on apartment buildings or mobile home parks (MHPs) because this real estate class is less volatile than the stock market or other real estate sectors, while having good upside plus built-in inflation protection. Keep door open to invest up to 25% elsewhere, such as in residential land development, when the price is right. Here’s more on why we choose apartment buildings.
- Look for buildings or MHPs in regional economies that are strong or expected to be strong in coming years, such as Western Canada or select US states such as Texas. This is ALBERTA in 2021 !
- Evaluate buildings or MHPs for sale, sifting through the list over many months to find the best values.
- Purchase selected buildings or parks as good deals are found, typically with 25-30% cash down.
- Increase value of assets through prudent renovations, which support higher rents and resale values.
- Increase value of assets through expert property management, further supporting rents and resale values.
- Use cash flow from renters to maintain the asset and flow excess into the LP as available.
- Allow time for cash flow from rents paid to lower the mortgage debt on each building so that the LP owns more of each, and thereby increasing the value of its original investments outside of the increases in market value of the assets themselves.
- Allow time for local economic growth/in-migration/tightening vacancy rate to increase market value of assets.
- Periodically sell or refinance buildings or MHPs to produce investor profits, and at some point liquidate the LP and its assets for the same reason.
How You Participate
There is a minimum $50,000 investment for accredited investors in our latest investment. The set value of one LP unit is $1,000 and each limited partner will own at least 50 units. Your investment term is a minimum of 5 years, with optional monthly cash flow or DRIP units and occasional, likely every 5 ears upon re-finance add’l distribution.
This is not designed to be a liquid investment for at least 5 years. It is designed as a perpetual or quasi-perpetual income & growth machine !
If you envision that you need the money before the 5 year exit target, this investment may not be for you. The underlying real estate usually carries an ultra-low five year mortgage, with heavy early discharge penalties, plus it takes time to raise money and time to sell, so a 5+ year minimum commitment is expected. The investment is designed as an alternative to the often very volatile stock market, specifically REITs, with a higher return but it is less liquid.
What is an accredited investor ?
Security legislation in Canada allows multiple exemptions to invest into securities such as those offered by our firm. There are mainly five:
- Friend and family of the directors
- Close business associates of the directors
- $10,000 or under investments
- Offering Memorandum (OM) – this is currently unavailable
- Accredited Investors
An accredited investor is someone that
a) has an income (for the last two years) of at least $200,000 or $300,000 with a spouse, or
b) has “financial assets” ie liquid securities or cash of at least $1M [ Please note: this excludes your personal residence and your business, say a dental practice], or
c) has a net worth of at least $5M
Liquidity comes at a premium, namely the securitization of a firm or real estate, through the stock market. Liquidity also causes volatility and pricing frequently removed from real world value. This is not designed to be a liquid investment. If you envision that you need the money before the 5 year exit target, this investment may not be for you. The underlying real estate usually carries a five year mortgage, with early discharge penalties. The investment is designed as an alternative to the often very volatile stock market, specifically REITs, with a higher return but it is less liquid. It is based on REAL assets, where REAL people pay REAL money to us every month to live in REAL apartments with REAL appliances, called income producing real estate, usually apartment buildings.
Again this is a plan, and like any real estate offering this is subject to change and a plan, not a guarantee.
Our Return Objective
A 12-14% average annual ROI with 5% annual cash distribution option (or 6% DRIP units) is our objective for the current LP opportunity.
Protecting Our Investors & Management Fee Breakdown
General Partners sign all required personal guaranties for mortgages (investors like you are Limited Partners).
Your total liability is limited to your investment.
We take no management fees but we charge a modest acquisition fee and 20% of all distributions. 80% of distributions are distributed to investors. As such, the GP’s goal and the investors’ goals are aligned. The GP is owned by Thomas Beyer. The GP may pay a fee or distribute some of their units to investment finders or co-managers at its discretion.
Some Short Videos
Please note that these videos do not provide investment, tax or financial advice ! These are only opinions. No return is guaranteed. Not every interested party is able to invest. Please contact an Exempt Market Dealer licensed to sell our products for financial advice.
Video 2: Profit Centers in Real Estate
Video 3: Alternative Investing 101
Video 4: Explanation of Target Return
Video 5: Explanation of Cash-Flow
Video 6: Risk of Mortgage Investments