Success in Economic Cycles

Education

Why Now is a Great Time to Invest, Even During the Pandemic:

Many investors are asking about our thoughts on raising a fund and investing during the covid pandemic and risks associated with investing now.

First, the real estate market was getting overheated in many markets over the past year or two.  Cap rates on Multi Family assets were reaching all time lows.   The only area that already had significant challenges was retail due to the Amazon effect.

When Covid took hold in March the real estate market was largely frozen.  Many institutional investors and mortgage banks had margin calls due to their mark to market financing.   Bond Investors including both residential and commercial bond holders were selling their bonds at deep discounts to par value which trickled down to affect the lending markets.

Six months later, despite many unanswered questions in the economy, things have been surprisingly stable for most of the investment partnerships we are involved in.

Multi Family Resilience:

One key surprise I’ve had so far in the 6 months since Covid is how the residential property sector both single family and multi family apartments have responded.   Deals I am personally invested in in South Carolina and Texas have all maintained mid 90s collection rates for rent and only 5% of tenants have reported a covid related job loss.

Residential housing supply is extremely low and vacant/foreclosed homes are selling in a matter of days in many markets with multiple offers.

The fact is there is limited housing supply in most markets and this has meant increased demand for available units.

There is still some concern over what happens when PPP Stimulus money runs out.  This is certainly a concern we analyze and it is part of our due diligence on any new project we invest in.

Post Covid Investment Thesis:

Multi Family Investment benefits from record low interest rates and very advantageous lending structures supported by Fannie Mae, Freddie Mac and HUD.

Our recent investment in Augusta, Georgia has 2.88 financing in place.

Benefits of Post Covid Investing:

Some larger investment firms/funds had large commercial/retail exposure and are out of the market entirely even though multi family deals continue to perform.

Good Operators Needing New Capital Partners:   A number of operators we work with had great partnerships with Private Equity of Family offices that took a step back due to their hotel/hospitality and office/retail portfolios and simply aren’t making new investments while they review their internal assets.

Buying after underwriting the best stress test:   Investors often ask how much we stress vacancy or collection rates when investing into a property.   Covid provided the best stress test possible when looking at collection and vacancy rates post covid.

Why You Should Invest with JKAM:

JKAM Investments is an alternative asset management firm focusing on assets in the real estate and mortgage market as well as alternative cash flow streams.  The JKAM Partners have 20 years of real estate experience managing nationwide portfolios of debt and distressed property.

The JKAM Diversified Fund allows passive investors to invest alongside our firm into alternative investment opportunities.  The Fund invests in joint ventures and limited partnerships with specific operators with strong experience in a given sector.  Our Fund’s strategy gives investors diversification across multiple markets and operators.

These opportunities are typically off market and difficult to access through traditional wealth management channels.  JKAM invests in middle market real estate and debt opportunities as principal or as part of syndications, often as GP or Co-GP.  Our shared ownership model potentially provides greater returns to investors.

Learn how you may earn 10% fixed or 15%+ equity returns, create a secure account here: