How it Works

Blue Bison Capital invests in multifamily properties that are primed for cash flow and exceptional returns. This type of asset is not speculative like development projects and yields consistent returns. Investing in multifamily assets is one of the safest strategies to build wealth over the long term while preserving capital. Key investment characteristics include cashflow, depreciation, equity, appreciation and leverage.

Multifamily Investing provides Equity that grows during the investment hold period. The loan principal is paid down by the tenants while the loan is amortized.

Multifamily Investing with a “value-add” business plan will deliver Appreciation. Typically we think of appreciation in real estate as organic appreciation, meaning the value of my investment will tend to increase over time. Organic appreciation may happen but this depends on market conditions. Forced appreciation will happen, and this is fundamental to a “value-add” business plan. Capital improvements to a property, when executed systematically, will allow rents to be increased. Additional value can be created by making operational improvements. Partnering with professional property management, rather than mom-and-pop management, is critical to the successful operation of the asset. This professional management can reduce expenses with better management practices. By increasing rents and/or decreasing expenses, the net operating income (NOI) is increased. Unlike single family homes that are valued by property comps, multifamily assets are valued by the NOI. Therefore, an increase in the NOI directly results in an increase in the value of the asset and investors’ equity.

One of the best attributes of investing in large multifamily assets is the debt financing or Leverage. The assets that Blue Bison targets have debt financing typically secured by Fannie Mae or Freddie Mac. This debt provides for fixed interest rates, long loan terms, long amortization periods and no personal guarantees (non-recourse). This financing is difficult to get and requires the right asset combined with the right sponsorship team. This strategy mitigates interest-rate risk during an investment hold period while the business plan to add value is executed.