Join the Real Estate Access Fund Deal Announcement
Join Shaun Jones, CFA, CSP, and Doug Motley, CFA for an informal discussion about an enticing new commercial real estate investment opportunity.
Register now to discover why investing in commercial real estate could be a great move for you right now, AND
get a chance to ask Doug all your burning questions about this opportunity.
2:00 pm EDT
You’ll have a chance to ask all your questions about this deal, including:
DOUG MOTLEY, CFA
About the Presenter
DOUG MOTLEY, CFA
Doug brings more than 18 years of experience in real estate and finance to Jack Lingo Asset Management. He leads the acquisitions and investment, capital markets, and investor relations activities of the firm. Mr. Motley is the founding principal of Rockford Capital Partners, a real estate investment firm that acquires and manages commercial real estate assets in the eastern US. Prior to founding Rockford in 2008, he served as Chief Financial Officer of a diversified real estate development firm. Previously, Doug held various management positions in corporate finance and business unit strategy as a Vice President at MBNA Corp (Bank of America).
A native of Delaware, Doug graduated magna cum laude from the University of Delaware with a Bachelor of Science in Economics, is a member of the Private Equity CFO Association, and is currently a Governor-appointed member of the State of Delaware Council on Housing. He also holds the Chartered Financial Analyst designation.
Why I'm starting a fund:
It has become clear to me that many of my clients are heavily weighted in the stock and bond markets. Last year I helped some of my wealthiest clients seek out direct real estate investments in order to compliment what they already had invested under my aegis. We sought and found several different types of deals including those projecting 5-8% annual cash flow plus another 4-6% of annual appreciation for a total expected return somewhere around 10%. A very tax friendly 10% for those in the highest income brackets.
I ended up helping my clients invest directly in a deal that was offering net 5% cash flow starting in year one with a projection of another 5% annualized appreciation with the conservative assumption that the property sells for current market value. If it sells for more 6 years from now the realized return will be greater than 10%. As you know this projected cash flow of 5% represents a yield on cash that is very difficult to find across all asset types, and the projected total return of 9-12% exceeds the long term expected return of a balanced stock/bond portfolio. In addition to these attractive projected yields, all tax benefits will be passed through to each individual owner allowing for deferral of all or most of the taxable income until such time that it is recaptured at a flat tax rate of 25%!
I realized that this type of direct investment was superior to what is available in the public real estate fund environment. Additionally, In a challenging bond market with very low yields and a headwind of rising interest rates applying downward pressure on the value of bonds, it is desirable to diversify away from traditional market income producing instruments. Furthermore, the interest rate environment that is creating such a challenge in the bond market is creating an opportunity in the real estate market.
So, I realize that this type of diversification is desirable, but the challenge is that these types of direct investments typically require a minimum investment of between $500k-$1MM, therefore precluding most of the investors who could benefit from such diversification from actually being able to participate. Furthermore, creating a fund allows clients the additional option of investing from inside their retirement fund without needing to make a withdraw, which would create a taxable event.
For all the reasons above I decided to start a series of real estate access funds. My transition to my new firm into the independent registered investment advisor arena allows me the ability to create such a fund so that almost all my clients can afford to participate in with the added benefit of having an advisor help them access the actual risk of such and investment.
Although I have directly owned real estate personally and consulted many clients through real estate deals including helping my own family work through the financials of developing our family property, I do not pretend to be the ultimate expert in this type of investment. However, I am in a very unique scenario in regard to garnering the expertise needed in these types of deals.
I have solicited the advice and guidance of my childhood friend and college roommate who is a founding Principal of the well-known Delaware real estate conglomerate Jack Lingo Asset Management (JLAM). JLAM’s principals have a demonstrated track record across multiple property types beginning in 1976 with more than $5 billion in aggregate real estate transaction volume. Furthermore, JLAM shares the conservative investment values that make them the ideal resource for my client base.
While the final details of the first deal are not completely known right now, below are the range of specifications that are likely to be offered: