Preserving Investor Capital
Mitigating risk and preserving capital is our sole focus as a sponsor and fiduciary of our investor’s capital.
Real estate investing is not overly complicated, but like any other investing endeavor, it relies heavily on sticking to sound investment principles and emotional control.
We have seen deal after deal get bid up to levels way above a price that we think any rational, logical sponsor should pay. We are often left shaking our heads at the stratospheric prices that these assets are trading and curious as to the groups buying them.
It’s easy to get a deal by overpaying, what’s hard, almost downright impossible, is hitting your return projections by overpaying. Like I said, emotional control.
Our partners have extensive backgrounds in capital markets, finance, private equity, and financial modeling. Essentially, we all have been deeply entrenched in sticking to sound investment decisions during irrational markets.
Let’s say after much internal discussion, we come to an overall consense that we are willing to pay $15.7M for an asset. We are shocked (well, not really) when we hear that there are 5 groups offering between $17-17.5MM to get the deal.
Maybe these operators know the secret sauce and are going to make a killing or ……maybe not.
What happens if rent growth slows? A recession rears its ugly head? How many groups are speculating with investor capital vs investing?
We are grateful and appreciate the confidence you have placed in Cloud Capital as sponsors and stewards of your capital. You, our investor-partners, are our most important competitive advantage.