At New Street, we specialize in single-family real estate investments. We believe this type of investment property yields strong returns relative to the risk involved. Single family rental properties offer investors the opportunity to generate passive income, benefit from appreciation in property values, and diversify their investment portfolio. Our process is simple. We source properties which we can strategically and efficiently add value, then hold for the long-term, allowing our investors to benefit.
Our investment process is designed to maximize our investors returns and minimize risk over the long-term. Let’s explore our end-to-end investment process a bit more.
Identify Target Market
The first step in our process is identifying target markets for investment. We see significant opportunities for strong cash flow and long-term value appreciation in single-family properties along the coastline. Some of the factors involved in identifying target markets is population growth, job growth, economic development, and affordability. We target communities which has generally seen a growth of population and commercial business as large portions of our population are moving away from the large cities. The coastal suburbs provide greater affordability than the waterfront communities with less seasonality. These neighborhoods are also generally outside of the flood zone which assists in the risk mitigation and profit margin.
Identify Target Neighborhood
Once the target market is identified, the next step is to narrow down the top neighborhood in the market. We select neighborhoods that have good schools, low crime, fast commutes to the central business district, beach, and strong appreciation projections.
Define Asset Purchase Criteria
Within the target neighborhood, there are a wide range of properties available, all with vastly different characteristics that impact the attractiveness and potential profitability of a rental property. To address this, we have built a screening tool which filters for ideal investment properties. This screener includes price range, bed/bath combination, square footage, renovation required, year built, and taxes. We also utilize a proprietary scoring model which is applied to the neighborhood, street, distance to downtown, school, crime, and overall home.
Sourcing
We strive to identify and acquire distressed assets which have the highest potential for investor return. The majority of these deals will be transacted ‘off-market’. Deal flow is generated through various channels. We source new properties through partnerships with local agencies, property wholesalers, and direct from sellers.
Investment Plan
Correctly underwriting the property and best execution of purchase are crucial to our investment model. After identifying a property which meets our ideal investment criteria, we build a detailed investment plan, which is presented to our investment team for review. The investment plan includes details of the purchase proposal, renovation required, and pro-forma for the duration of the targeted hold period. If the proposal is approved, we move forward with the acquisition negotiation.
Strategic Renovation
Renovation is a key input in our investment model. The required renovation would need to first fit within our investment criteria. Our goal is to invest in renovation which focuses on low cost, high value which will increase the estimated return, while also minimizing maintenance expenses over the duration of the investment period.
Ongoing Management
Efficient management of each investment property is critical to our success. Our team works to manage operations focusing on effective property and tenant management. We leverage an internal management team which helps keep our fees low compared to third party property managers. We also aim to place the most qualified tenants in each property for long-term leases, which reduces vacancy risk.