If you are new to real estate and aren’t quite sure what the difference class assets are in commercial real estate, check out our blog on the topic here. For those of you who are familiar with the classes, we want to talk about why we choose to invest in the B & C class assets and give you a little more insight into the vast array of investments.
If you have read the article above, you know that there are A, B, & C class assets and they are about what they seem. A is best, C is much lower on a scale. But to take it a little deeper, you also have Core Assets and Core Plus Assets. Core assets are prime, major markets in downtown areas. These are long term investments that are conservative with consistent cash flow and tenants. They are highly desirable, and they are rarely vacant. There isn’t much you can do to add value to these properties because they are normally already at the top of their game and you are getting prime rents from these kind of multi-family properties.
Core Plus Assets are slightly removed from the downtown area. They may be in historic districts, up and coming industrial districts that are being turned into high end apartment buildings, or they may be older apartment buildings that are made to mimic the charm and character of similar Core Asset properties just around the corner. These properties can usually stand to have a little add value work done, but like Core Assets, their tenants usually have good credit standings and their rate of rent renewal is pretty high.
Next come your add value properties, what we specialize in. These properties are in need of a little TLC, but all in all, they have good bones, great potential, and with the right management and amenities, they can become excellent earning properties. There is some risk in investing here, because they are not perfect from the start, but they are properties for middle class families and individuals who are interested in a good quality of life.
The last type of property is what we call an opportunistic property. This is a property that has the most risk, but also the most return. These could be foreclosed properties, abandon properties, properties that are in “bad” parts of town, etc. This is a fixer upper property; a property that you have to prove is worth living in. This kind of property requires capital, expertise, and a whole lot of patience. It’s not impossible, but it could be a challenge.
So why do we choose B & C class properties? Here at Magnolia Capital Properties, we are committed to the long term protection of your assets. We are committed to properly managing each asset in order to keep you secure and benefiting in all aspects of your multi-family investments. Delivering and managing investments in real property will help investors achieve financial independence and generate a long term passive wealth strategy. We like B & C class assets because they are predictable. They have the ability to add and hold value in the long term. Our goal is to obtain properties and bring them up to a higher class quickly so that they start working for you as quickly as possible. If you are an investor looking to start investing, contact us today! Magnolia Capital Properties is here to build long term relationships with interested investors. So if you are looking to invest in multi-family properties that can grow in value, head to our contact page and fill out the contact form so that we can start investing with you today!