Our approach
Meaning
Warren Buffett once said, “If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes.”
At Gibson Capital, we don’t buy stocks, but nonetheless, the first and most important principle in our investment strategy is to fully understand the opportunity at hand. There are numerous profitable real estate strategies out there, however, we choose to focus only on what is within our circle of competence; our wheelhouse of expertise.
For us, this means opportunities within the multifamily, self-storage, mobile home park/RV campground, and short-term rental space. With our focused strategy, we feel we give ourselves and investors the greatest chance of success to prevent permanent loss of capital and obtain a satisfactory risk-adjusted rate of return.
Moat
Investing in properties that are able to generate predictable, high levels of cash flow over a long period of time is absolutely essential to our strategy. And such opportunities typically exist where other positive demographic trends are also present in the given area: population growth, job growth, income growth, and businesses moving to the area, to name a few.
These are all key indicators that a property is within a location that has a durable competitive advantage, because once these established trends are in motion, it is very difficult to reverse their course.
Management
We require an operating team that has a long-term track record of honesty, integrity, conservative underwriting, and overachieving for investors in both the asset class and ideally the geographic region we are investing in.
Since the majority of our investment opportunities involve implementing value-add business strategies, our investment thesis heavily relies on the operating team we are partnered with successfully executing their business plan to increase the cash flow of the property and force appreciation.
Margin of Safety
Assuming all other criteria have been met, there is not an infinite price we are willing to pay for any investment opportunity no matter how great it is.
Lastly, we evaluate whether the purchase price of the property supports a large enough margin of safety such that if the business plan carried out by the operating team does not go according to plan, then we are still earning a satisfactory return in the form of cash distributions while we wait for a profitable exit. Insisting on a margin of safety in our purchase price provides us the greatest opportunity to own a truly low-risk/high-reward asset over the long term.
Our Investors Build Wealth 4 ways
Cash Distributions
Positive cash flows generated by the rental property are typically distributed to investors on a monthly or quarterly basis, and lump sum payouts are typically paid out either at disposition and/or refinancing.
Amortization
Rental income collected will not only pay down the debt owed on the property, but any amount applied toward the principal would grow your overall equity stake (ownership percentage) as well.
Appreciation
By implementing operational and/or physical improvements to a multi-unit property, the Net Operating Income may be increased which can lead to a higher market value. This is called forced appreciation.
Depreciation
Our investors enjoy several tax benefits, including cost segregation, accelerated depreciation, as well as possible 1031 exchanges into new projects to further defer taxes.
Questions before getting started? Get in touch.
Join Our Investor Club, today.
FAQ
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We provide various investment opportunities for both accredited investors as well as non-accredited/sophisticated investors.
Who qualifies as an accredited investor?
Per the Securities and Exchange Commission (SEC) regulations, to be an accredited investor, you must satisfy at least one of the following:
Have an annual income of $200,000, or $300,000 for joint income, for each of the last two years, with expectations of earning the same or higher income this year.
Have a net worth exceeding $1 million, not counting your primary home
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Once we identify a top-tier investment opportunity led by an elite sponsor team, we share it with our Investor Club.
You evaluate the sponsor, market, and deal that you are investing in
Submit a soft commitment to the deal with the amount that you would like to invest
Login/signup for the investor portal
Sign your subscription documents
Fund your investment via wire transfer
Set up ACH to receive distributions within the investor portal
From here, you are entirely hands-off. Each month or quarter you should receive both distributions and reporting to show the performance of the deal in comparison to the budget for that given time period.
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While the most common minimum investment is $50,000, most operators will allow $25,000 investments if $50,000 is the advertised minimum.
It is always worth asking if you are doing your first investment or just want to be able to have your capital diversified across a larger amount of deals.
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We have investment opportunities in the following asset classes:
Multifamily (apartment buildings)
Self Storage facilities
Mobile Home Parks/RV Campgrounds
Short Term Rentals
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SEC guidelines prohibit publicly advertising syndicated offerings so we only share potential investments with investors who are on our mailing list. Please join our Investor Club today!
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While exact percentages will vary from one investment to the next, our goal is to only target deals with the potential to deliver a 15% annual compound rate of return, between both cash distributions and realized profits upon disposition or refinancing of the property.
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As a Limited Partner in these investments, you actually own a percentage of the property, which allows for several tax advantages.
The IRS allows investors in a real estate investment property to expense a portion of the purchase price and capital improvements made to the property through depreciation expense.
Additional advanced depreciation strategies such as cost segregation and accelerated depreciation are typically implemented to maximize profits in the initial years of ownership and beyond.
Also, when an investment property ultimately is sold, investors can often take advantage of another tax benefit called a 1031 Exchange, and further defer taxes.
Please consult your tax advisor or CPA for specific benefits of these investment types.
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No, access to our investment opportunities is absolutely free to our Investor Club
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Join our Investor Club to get exclusive access to upcoming deals.
We look forward to our long-term partnership!