Anthem Investing

Always Be Renting-

Having assets that generate rental income is core to my overall investing strategy. Impervious to the stock market, providing cash flow, equity growth, and tax advantages.

I just sold one of my first assets—a three-unit property that I self-managed. I learned a lot in the last ten years, but it was time to access the equity and move on/up.
My Investments are almost entirely Multifamily. I went from managing 30 units myself to investing via syndication in more than 1100 units across the Midwest and the Sunbelt.

Along with Multifamily, I am considering Light Industrial, Self-Storage, and other assets to round out my portfolio. These provide a unique window into a different renter mix, and via syndication, they are hands-off.

Why manage myself when I can leverage the expertise of others to provide cash flow and equity growth.
If this resonates with you, reach out.

Excited for our investors who joined the Mid-Michigan 8 Fund that closed and is performing well. This Fund acquired assets throughout the Michigan region near Lansing and within 4 miles of each other. The operators niche is in small, highly profitable, off-market multifamily assets in areas of low competition. With few other quality property management companies in the region, the opportunity to create tremendous value by responsibly managing the assets, respecting the tenant base, and providing
exceptional value at a fair price point. Rather than a significant renovation strategy this was focused toward expense management. To learn more about passive investments in multi-family syndications, please reach out.

Excited for our investors who joined the Rise Highland Meadows project which has closed. Rise Highland Meadows is 328 units built in 1983. The property is located in the Dallas MSA. It offers immense upside with the opportunity to renovate 100% of classic interiors. Rise sourced this deal at a very low basis from a truly distressed Seller which gives them unique position to grow this assets value. Looking forward to a successful investment with our operating partner Rise. To learn more about passive investments in multi-family syndications, please reach out.

There is a very interesting trend in the dental space, following most general practice medicine, to join larger groups these are called DSO's- I will have a link below. Some DSOs only buy and aggregate up the practices; others buy the practice, add operational expertise, and own the real estate. Most DSOs use traditional lending to acquire the assets but with rates this high many are on the sidelines. Yet there are others that are teaming up with the retail investor to acquire assets.

So where does this make sense? If 500,000 sets of teeth moved to the sunbelt and need new dentists well, maybe that's interesting.
If this train of thought makes sense to you as an investor, please reach out.
What is a DSO-

What are the main types of DSOs? More commonly known as DSOs, dental support organizations are entities that dental practice owners contract with to manage the administrative, marketing and/or business sides of that dental practice.

Want to create an additional income stream? Side hustle without hustle? How the wealthy create more wealth- Passive real estate investing-
https://www.antheminvesting.com/passive-real-estate-short-cut

Passive Real Estate Investing provides significant advantages in putting your money to work. — Chicago Investing in passive real estate can provide a significant tax advantage return without any demand on your time. Selecting the right operator to work with can be a very time consuming endeavor that will delay your decisions further. Working with Anthem Investing the due diligence and analysis for ev

Reducing Market Risk and Alternative Investment Options

So the market has provided a fantastic YoY return for many investors. However, based on when you read this, the market is ripping in one direction or the other. And for some, they have started to put money on the sidelines to reduce downside risks.

If you take off risk, where do you put it?

It seems, out-of-the-market looks like capital preservation, capital preservation gives up significant potential returns and focuses on security and stability. Capital preservation securities are associated with minimal risk. These investments include— savings accounts, CDs, federal bonds, and treasury bills as they are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. Other options include various types of annuities or insurance products. The biggest drawback of capital preservation is its ability to maintain or surpass inflation, and capital preservation assets usually rely on much-lower interest rates averaging less than 2 percent. If you're not close to retirement age, this may not provide the kind of return to keep your money working for you.

So then what?

What if you could invest in an asset-backed, risk-adjusted product that provided options for an 8-10% annual return or a choice to make 7% annually and target a 20% IRR at the asset's sale (more to follow).

Recession-fighting, Income-generating Real Estate- During a recession, people will save cash and cut spending. Retail and Office sectors are often impacted as spending slows and contraction starts. People will travel less and unfortunately some companies shutter. But people will continue to need a place to live. When people feel the pressure to conserve cash, some will refrain from capital expenditures like cars or planning a new home purchase. This compounds as liquidy tightens, so does lending from banks. Therefore, it's likely that the share of renters will increase during these uncertain times.

The advantage of large Multifamily Real Estate- Due to its size, at 200-400 units, the individual vacancies have little material impact on revenue. Although it is vital to manage vacancies, they are much more impactful to retail and office properties. Focusing on Rent stabilized assets ( greater than 85% occupancy) provides positive cash flow via rents allowing the operator to concentrate on the business plan.

Tax-Advantaged- As a partial owner of the asset, the investors will receive a K1 at year-end for tax purposes. As the operator depreciates the asset through cost segregation they can accelerate this loss on certain items. This will create a passive loss that will reduce the amount of overall tax on m monthly distributions. This loss can accumulate as well to further reduce tax liability at assets sale. A further advantage at the sale of the asset is to use a 1031 and roll into another project without tas penalty.

Strong asset class- Working in the Value-add space is a strong area for success. Taking a Class B Asset (more than 15 years old, in a good neighborhood) and improving the building through updates and renovation can bring it to B+ or A equivalent. This improvement will make the asset desirable to new tenants at higher rents and future buyers like major institutions for a healthy exit.

Wrapping it up- An alternative investing approach has become more available to investors. Large Value-Add, Multifamily Real Estate investments will fight a recession and provide robust investment returns.

Here is some common language for returns.

Class A units: 10% preferred return

Class B units: 7% preferred return + share of profits 70/30 LP/GP profit split to 2x multiple Greater than 2x multiple, then 50/50 split on every dollar over the 2x hurdle.

Hold Period: 3 to 5 years

Distributions and Reporting monthly

minimum investment of $ 50,000

Class A will receive a 10% return annualized and distributed monthly until the asset's sale (preferred means subordinate only to creditors).

Class B will receive a 7% return annualized and distributed monthly until the sale of the asset (Subordinate to creditors and Class A). They will also participate in profits on the sale of the asset at 70%. Based on the hold period, this will generally create a 2X return on investment in 3-5 years.

At Anthem Investing, we are focused on Value-Add commercial real estate.

To learn more or preview upcoming opportunities contact me.

Joe Archbold

[email protected]

Anthem Investing updated their phone number.