HOW WE INVEST MONEY
Real estate was once considered an “alternative investment,” but in recent years, it has become a more mainstream and even highly desired investment vehicle.
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Due to the high costs associated with developing a project, most individuals are limited on what they are able to buy.
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Real estate investment projects like we offer at Panama Capital Partners provide another entry point for those looking to invest in real estate. These opportunities are particularly appealing to those who want income generating property, but would rather take a hands-off approach to management activities.
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Our approach to real estate investment pools capital from multiple investors, and then we as the management oversee all the investments activities, including management of project and the investors just focus on the ROI
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The majority of our projects at this time involve development and sale of Speculation Built Fast Sale properties.
Investing in the real estate funds we offer is a great way to generate passive income if you are interested in owning real estate, but who do not want the responsibilities of direct ownership.
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Each opportunity we create is formed as a unique financial entity that then pools investor funds and allocates shares. These financial entities then participate in investments to generate income and profit for the entity.
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Here are our current opportunities to invest in
WHAT IS A REAL ESTATE INVESTMENT PROJECT
An investment project is a pool of capital that has been aggregated on behalf of multiple investors. In the investment world there are many types of investment funds, such as mutual funds, money market funds, and hedge funds. A real estate investment project is a specific set of funds that is focused exclusively on investing in income-generating property.
Our real estate investment oportunities are spearheaded by a sponsor who has years of experience in the real estate industry. Our oportunity managers will carefully analyze individual opportunities, and then these opportunities are executed on using capital from the project.
Some of our projects are open to the retail investor, whereas others are only available to accredited investors. Panama Capital Partners can focus on specific geographies, asset classes, asset types and more. Most of our real estate investment funds are closed-ended and target risk-adjusted passive returns for our investors.
BENEFITS OF REAL ESTATE OPORTUNITIES
Flexibility
It is a common misconception that investing in a real estate fund requires an investor to sacrifice flexibility. In fact, the opposite is true. If you were to invest in a single asset, for example, you’ve put all your eggs in that basket – you’d better hope that the investment pays off the way you expected it to! However, investing in funds provides more control and flexibility.
For example, an investor who has $1 million to invest can choose to invest that in $250,000 tranches across four different oportunities and projects. There are many oportunities focused on different geographies and asset classes, which allows the investor to choose which types of properties they want to purchase and where. This allows investors to truly customize their portfolios without having to buy individual assets directly.
Profitability
Our real estate investment projects are typically structured to return profits to investors before any profit is earned by the projects management. As a result, the management is highly motivated to ensure the investments achieve their intended profit threshold. Projectects and oportunities are structured in this way as a means of keeping interests aligned between the management and the investors.
Diversification
Panama Capital Partners sets a wide variety of investment parameters, broadening the reach of potential investments. For example, a project may focus specifically on a single asset type but be open to different geographies (say, multifamily investments in core markets across the country). Alternatively, a fund might invest in a range of product types in a single market geographic market.
Another oportunity might only invest in opportunistic real estate investments that need moderate to heavy rehab on mid- to long-term time frames. By investing in a real estate project, individuals can diversify their portfolios, thereby mitigating the risk of having “all eggs in one basket.” This is one-way investors protect themselves in the event of an economic downturn.
Preferred Returns
Many of our private real estate oportunities offer investors a preferred return in addition to their pro rata share of the projects overall net profits. While no oportunity can ever guarantee payment of a preferred return, those who invest in one of our real estate projects are assured that they will receive the initial profits from the projects investment activities before the projects management receives their share. This structure ensures that the project's management is motivated to achieve their targeted returns; otherwise, the project's manager will not earn their share of the profits as anticipated.
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Correlation to Other Asset Classes
Real estate, typically, has a low correlation to other asset classes such as stocks and bonds. This is because of the highly illiquid nature of real estate, which cannot be purchased and sold on a moment’s notice. This appeals to many people causing them to invest in real estate investment funds as a way to diversify their portfolios.
For example, if the stock market were to plummet overnight it would immediately lose tremendous value, in contrast real estate portfolios tend to continue marching on. Rents continue to be paid and profits returned to investors. While the real estate portfolio may eventually take a hit, there is not the same correlation to other asset classes which can experience more drastic, momentary highs and lows.
Qualifications
When investing in real estate projects, individual investors benefit from the experience and qualifications of the projects management. The project's management is a professional industry team that is highly qualified to oversee a fund that will be deployed in various real estate projects.
A high quality management team is able to provide detailed financials for investors to review, and will be happy to answer any questions about their strategy, assumptions, and how and why the fund structure they are building will prove to be successful.
Moreover, the project manager oversees all day-to-day activities associated with the oportunity. This allows individuals to invest without being distracted by the nuances of each individual transaction carried out through the project.