our strategy

Sapient Capital LLC A privately held investment firm seeks to acquire multifamily assets in emerging markets that have a value-add opportunity due to inefficiencies in property management, typically owned by Out of state and/or Mom-and-Pop investors

WHY MULTIFAMILY

Demand-Supply

  • US needs 6 Million apartment units by 2030 to support new households formations and replenish aging inventory
  •  Since 2008-2009 housing bubble fallout and home equity destruction – a rental lifestyle is favored
  •  Millennials seeking more mobility and often saddled with student loans, postpone home ownership or choose to have the flexibility of renting

Diversification & Returns 

  • Multifamily real estate offers portfolio diversification to stocks; since the turn of the century multifamily has performed the S&P 500 2:1
  •  It is relatively less volatile and performs relatively well (less decline) in recessionary environments – in last recession single family homes experienced 4% delinquencies whereas multifamily were at 0.4%
  • Multifamily offers a hybrid return – cash-flow return from the rents (Fixed Income) and appreciation of the property (Equity) due to value-adds we perform;
  • A Freddie/Fannie agency-debt (leverage) increases return

Tax Benefits

  • Passive investors – can offset their taxable income through depreciation, accelerated depreciation, bonus depreciation – tax strategies we deploy on our projects

MULTIFAMILY RISKS

Like any other asset class multifamily has risks associated with it and returns are not guaranteed; investors need to understand these clearly

  • Illiquidity
  • Inexperienced operators and property managers
  • Poor choice of location – Poor demographics, excess supply, overbuilding, legislative changes etc.
  • Buying properties at top of the cycle, appreciation play instead of cash-flow