{"id":406,"date":"2019-02-15T18:31:07","date_gmt":"2019-02-15T18:31:07","guid":{"rendered":"https:\/\/nakedcapitalgroup.com\/?page_id=406"},"modified":"2022-11-14T21:21:18","modified_gmt":"2022-11-14T21:21:18","slug":"strategy","status":"publish","type":"page","link":"https:\/\/nakedcapitalgroup.com\/strategy\/","title":{"rendered":"Our Strategy: Predictable Returns in an Unpredictable Market"},"content":{"rendered":"

Current state of real estate<\/h3>\n<\/div>
It\u2019s been an incredibly fortunate decade for real estate investors. However, our research suggests that most real estate assets have been speculatively priced above their underlying risk and return drivers.\u00a0 Additionally, given that incomes are fundamentally limited, so too are outsized asset price appreciations.<\/h5>\n
To address this, Naked Capital employs an operationally focused approach, driving excellent risk-adjusted returns without relying on continued market appreciation.<\/span>\u00a0 This model allows sophisticated investors to add minimally market correlated returns to their portfolio while still achieving exceptional returns.<\/h5>\n
A key element of our strategy is to focus on assets too small for institutions and with too sophisticated of a management need for a non-vertically real estate management group.<\/h5>\n<\/div>
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Our guiding principles<\/h3>\n<\/div>
Non-Speculative, Day 1 Cash Flow<\/strong><\/h6>\n

Rental income is demonstrably far more stable than Single Family Homes. During economic downturns, potential single family home buyers elect to continue renting \u2014 thereby stabilizing rental rates.<\/p>\n

We purchase assets with substantial, sustainable rental income on day 1. This substantial cash flow allows us to underwrite our investments to a market softening vs speculative market appreciation. While the upside to a highly-leveraged and speculative investment may be higher, our goal is to provide consistency and confidence in performance.<\/p>\n<\/div>

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Affordability Driven Rental Rates<\/strong><\/h6>\n

Although the Multi-family, Value-Add, and Development markets have seen tremendous growth over the past 5 years, most markets are experiencing an oversupply of high-end rental stock relative to demand. Evidence strongly suggests this demand is diminishing. Young professionals are increasingly burdened by student loan costs, stagnant wages, and higher rental prices, while at the same time, the gig economy (think Uber and Amazon) continues to grow further exacerbating the affordability crisis.<\/p>\n

We therefore purchase with the following:<\/p>\n