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Financial

Advisors

Institutional-quality real estate solutions to help you reach your goals
How we work together

Experience a simple, focused, and proven multifamily investment strategy for your clients.

Minimize portfolio volatility and reduce correlation to the broader stock market.

Amplify your clients’ diversification with the same strategies used by leading institutional investors.

Strengthen your clients passive income streams with quarterly distributions.

about us

We have a niche focus on multifamily complexes with 20 - 150 units. This means we don't compete with other large institutions who consistently out bid each other on the larger assets. We prefer to be the big fish in the small pond which in turn delivers higher quality returns to your clients.

Secure & Efficient

Our online advisor portal provides ease of access to our due diligence center, streamlined subscription processing, and on-demand performance reporting. Our team is here tosupport you and your clients.

We're All About Educating Investors

We spend a lot of time creating material to help educate investors on this increasingly important part of any portfolio. Our material is yours to use and we are here to support you as you continue to bring value to your clients.

Building Lasting Partnerships

We foster partnerships that stand the test of time. We are looking to consistently create new offerings that can serve several different generations of clients.

Experienced. Focused. Disciplined.

Bringing institutional quality management to middle market assets

It seems like all real estate operators preach the same things these days. They make improvements, increase income, and decrease expenses. At our core, we do the same, but our team and the way we buy our assets set us apart from the rest. Over 20+ years of operating in the Gulf Coast region of Florida, we have figured out exactly who we are as a company and who we don't want to be.
It can be more labor intensive to tackle the nuances of the lower middle market multifamily sector and as a result, many large institutions stay away. They prefer to focus on larger equity checks, than putting in the rigorous work to underwrite a large number of deals that may never happen. In our opinion, the deals that make it through underwriting make all the extra effort worth it. The results speak for themselves.

Product Comparison

Description
Direct Deal
Private Equity Fund
Similar to choosing a stock to invest in
Similar to investing in a mutual fund

Geographic Diversification

In a Fund structure you own a piece of many assets in different geographic regions. In a direct deal there is only one property.

Asset Level Diversification

In a Fund structure, returns are based on the performance of the entire portfolio. If one asset is underperforming, other assets may be overperforming.

Passive Asset Selection

Some investors prefer to pick and choose deals to invest in. Some investors like to defer this process to managers who select assets on based on defined risk and return profiles outlined in the offering memorandum.

Passive Investment

Both the Fund structure and Direct Deals offered through Freedom Venture enable investors to gain passive exposure to multifamily real estate & all the benefits that come with property ownership.

Questions

Q.

Why wouldn’t I have my clients invest in a REIT where there is liquidity?

A.

The value of a private real estate fund is based on the actual value of property held by the fund. Conversely, in a public REIT, the share price value is determined by daily market forces, which means the share price of a public REIT may not reflect the actual value of the underlying real estate. In some cases, the share price can value the REIT 30% higher or lower than the actual value of the underlying real estate. Private real estate values don’t move much on a daily basis but rather appreciate slowly over time, which is why private investments are less volatile than their public counterparts. Both vehicles have pros and cons and the optimal portfolio has a combination of both. Public markets offer liquidity, but that comes at the expense of volatility and private investments offer investors low volatility, but with that comes illiquidity.

Please read this article here that takes a closer look at the pros and cons of each.

Q.

Should I advise my clients to invest in a Fund or Individual Deal?

A.

It goes without saying that each client will have a different scenario, however here are the high level points to note.

Investors who select individual deals have the freedom to pick and choose what deals they invest in, but this also requires a large amount of time and may not result in the most diversified portfolio. Investing in a real estate fund means giving up control of selecting individual deals to a disciplined manager, but also means saving substantial time and, ideally, receiving a well-diversified group of real estate investments.

Considerations:

1.      Time Commitment

With a deal-by-deal approach, an investor would have to source a large number of deals and evaluate every opportunity. Finding a good, trustworthy manager is not easy and the investor only has to find one if investing in a fund.

2.      Reporting

In a fund, investors receive consolidated quarterly performance reports on their entire portfolio, rather than dozens of individual reports. Each update will follow the same format and illustrate how the individual deals within the portfolio are performing and the overall investment performance at the fund level. Additionally, year-end tax reporting is much easier in a fund structure because K-1’s, a tax document sent to partners that lists out their share of income and loss for the year, are consolidated into a single document for tax reporting purposes. But an investor in 20individual deals will likely have to manage 20 K-1’s and the costs associated with filing them.

3.      Diversification

Diversification is one of the easiest ways to reduce risk. In real estate, investors need to make sure they are not overexposed to any one deal or geographic region. Our funds have minimums of$100,000, but that capital could be spread across 15 to 20 deals. Investing$100,000 on a deal-by-deal basis could easily lead to a portfolio of four to six deals and a single property could easily make up 30% or more of the portfolio. Real estate downturns can often be isolated to a single city or region and having too much concentration in one area can lead to unnecessary risk. Our funds target multiple markets for diversification.

4.      Incentives

In a fund, the performance fee is paid based on the overall performance at the fund level. In contrast, managers of individual deals get paid based on the performance of each and every deal. This is important because if one deal generates a 20% annualized return and another deal generates a 20% annualized loss, the manager is entitled to an incentive fee on the deal that did well and knows they won’t make money on the underperforming deal. The manager operating in a deal-by-deal structure may be more incentivized to focus on the deals doing well and ignore those doing poorly where they are least likely to earn a fee. The fund manager, in contrast, is highly incentivized to revive underperforming deals.

Q.

What if my client doesn't want his investment to include management fees?

A.

Unlike the public markets, real estate is not a business where you want to base a decision on fees alone. There is a big difference between price and value and low fee real estate deals can end up being very expensive. The quality of a business plan and the asset manager who runs it make the most impact on the success of a real estate investment. Fees are a function of the complexity of a business plan and should be correlated to the value the manager is able to create. Someone must find the property, negotiate the price, create marketing materials and legal documents, raise equity, manage the day-to-day operations of the property, formulate and execute the business plan, report to investors, provide K-1’s, sell the asset and distribute the proceeds. A great team does not come cheap, but the overall return far outweighs the cost.

tech support

You are in Good Hands

We have the team to give you the help you need

At no point will you be alone when working with Freedom Venture. Our team is dedicated to the success of your clients and will be ready when you need us. Whether it is a report, tax documents, or simply a question about the performance of the assets, our team is more than qualified to get you the answers you need when you need them.

Dave Seymour Talks One-on-One with Tom Kennedy, CFP at Global Wealth Advisors