During this phase we use various tools to determine which markets suit Selarom Properties’ Business model. We look for markets with increased population growth, increased demand for rental units, stable or increased work force demands and low crime rate.

Once a market has been selected, we will look for properties that meet our return criteria of 7% cash-on-cash, 14% IRR and 15% ARR. We focus on B-C class properties in B-A neighborhoods with a value add component. The value add comes by way of increasing rents, improving management, and lowering expenses all which increase the net operating income which increases the value of the property.

Our analysis involves entering both historic and anticipated information into our model. The historic information will help us see how the marketed property value lines up with the rest of the market in the surrounding area. We will then put in some of our anticipated expenses and income to determine what we can actually pay for the property. Property Managers, Contractors, Insurance Brokers, and Lenders will provide the necessary information to determine how much value we can add to the property.

While we are performing our analysis we are also creating the business plan for the property. We create the business plan by leveraging established relationships with Property Managers, Contractors, Banks, Insurance Brokers and with our Partners. Each individual will all play a part in putting the business plan together. The business plan will entail determining the best financing options, exit strategy, how to raise rents, lower expenses and put the best management approach into play for the specific property.

Once the business plan is complete and we have determined that a property will generate the desired returns we will submit a Letter of Intent. Once agreed to the purchase of the property, we will begin arranging visits to the site with contractors and our property manager to perform inspections. We will continue to capital raise if needed. After inspections we will move into purchase and begin the discovery and due diligence phase, create the LLC, and finally purchase the property.

At this point the property is now in our care and we begin acting upon our business plan. Which involves getting new property management in place, performing necessary maintenance, repairs and renovations. Working to lower overall expenses. We will communicate with the investors along the way keeping them updated on the monthly income and expenses, provide updates on any repairs or renovations, and issue quarterly rent collections.

During the business plan, we will decide how long of a hold period is needed to provide the necessary returns. This is on average 4-6 years. Once the business plan has matured, we will then move sell the property and provide all investors a final distribution check.