Our core focus is capital preservation. We invest in the Midwest because this market offers superior downside protection combined with attractive current cash flow and stability. Our conservative approach toward investing in the Midwest has consistently generated meaningful capital appreciation as well.
We align interests by co-investing meaningfully in every asset we purchase, by minimizing fees, and by subordinating our economic interests to those of our partners. In addition, we are vertically integrated. This means that we operate a fully developed asset management and property management platfom, and we commit our platform to optimize the value each asset. By aligning our capital and management platform with the goals of our investment partners, we are able to provide superior opportunities to achieve attractive financial returns.
Successful value-add investing requires the ability to identify assets that are under performing due to inexperienced ownership, poorly capitalized ownership, management fatigue and/or deferred cosmetic maintenance. Any of these conditions can create opportunities to acquire assets at prices not reflective of their true, intrinsic value. Most important, we employ intensive physical due diligence efforts alongside conservative underwriting and valuation techniques when acquiring and financing these assets, because we know that our purchase price is the one thing we cannot fix after closing.
BUILD ENDURING CASH FLOWS
After closing, we invest carefully in accretive interior and exterior upgrades to grow durable, tax-efficient cash flows over time. Growing durable, repetitive cash flows over time helps to preserve wealth and create the potential for meaningful capital appreciation.
When we are successful, we prefer to return capital and profits with cash-out refinancing proceeds. From a tax perspecive, returning capital and profits from refinancing proceeds is generally fully tax-deferred, whereas income from sales proceeds is not. This approach also allows us to hold long term and experience the magic of long-term compounding cash flows without the execution risk of a 1031 exchange.
We invest in the communities we serve. We do this by implementing extensive, multi-year capital improvement programs in each property, thereby improving the quality of local housing opportunities. We also make local investments in support of the following three key themes:
- Health & Well-being
We support these three key themes at the property level by organizing and leading local initiatives such as annual back-to-school supply drives and annual holiday toy drives for families in need. At the corporate level we provide support through annual investments in local community organizations like Cincinnati Works and GeneroCity 513 in Cincinnati, Junior Achievement in Southwest Ohio, and the Foundation for Youth in Columbus, Indiana.