I frequently hear some of the same questions about the fund, and there are some simple reasons that our fund is better for investors than others – including that it’s not exactly a fund…
There are a few main reasons we think our fund is better for investors. In fact, in some ways it’s really not even a fund. Instead we often characterize the fund as a multi-asset private placement, because it’s the same as you and me, as investors, going out and buying apartments – instead we’re just buying multiple locations to spread the risk. You’ll get a K1, you own the real estate, with all the advantages that come with it. Unlike many funds out there, you don’t own a piece of paper – you own actual real estate.
Reasons the BAM Fund is Better
- Our fund is NOT a REIT: The first reason that our fund is better than others is that we’re not a REIT (real-estate investment trust). As an investor, you’re a partner. It’s analogous to you buying an apartment building with me, as partners and agreeing to some economics for both of us. In this case, instead of buying one asset, we’re buying multiple assets. This gives us the diversification of a fund, and an overall higher probability of a return, by “spreading our bets.”
- Raised capital doesn’t burn a hole in our pocket: We’re not raising $50 million and then running around, desperately searching for deals. Instead, we’re raising capital in tranches, as we identify assets. We have two years, and we can close the fund at $20 million, $30 million, or our max of $50 million – but we have to identify the assets first. We’re doing it this way to prevent misalignment with investors by being backed into having to find deals to get returns.
- Our fund pays an annualized coupon of 7% monthly: Within two-three months of deploying the investors’ capital, you’ll receive monthly cash flow. In this market, we’re still successfully finding deals that we’re highly confident will return overall 14-18% in annualized returns as we exit the deals, hopefully between years 5-7.
These top three reasons answer things I tend to hear often regarding how the fund works, and are the reasons why we believe our hybrid fund is superior!
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