Medical real estate - Dialysis Centres
- The 65+ population, accounts for the highest per-capita health care spending by far, will nearly double by 2055. 10,000 people turning 65 per day in the USA!
- Cost containment is driving health care industry consolidation and fueling demand for less expensive delivery settings, such as medical office buildings and urgent-care facilities.
- Absorption of medical office space has outpaced new supply for the past seven years, lowering the segment’s national vacancy rate to 8% as of Q1 2017.
- Rising investor confidence in medical office space has resulted in increased transaction volume in the segment, which reached nearly $10 billion for the year ending Q1 2017.
- Doctors seldom move their practices for a multitude of reasons
- There has not been enough medical real estate development to feed the rising demand, causing cap rates to trend downwards, driving capital growth and rental demand in this sector.
Why renal care centres?
- Ageing population and growing rates of kidney disease results in more and more customers.
- If you don't get your dialysis, there is a high probability of death. This sounds harsh, but it's true. We buy these centres because it makes such a huge impact on the patients life by keeping them alive!
- In 1972 the United States Congress passed legislation authorizing the End Stage Renal Disease Program (ESRD) under Medicare. Therefore we know the business will have an extremely high probability of getting paid by their customers, providing the business with an unassailable security moat of cashflow.
Long term leases, dependable monthly cashflow with great quality tenants!
Multifamily apartment complexes
Diversified dependable USD cashflow!
- When you buy 100+ units in one complex at a time, you create a situation where you immediately have diversified income from multiple tenants that is much easier to manage than a large portfolio of single family homes. If 10 people don't pay their rent, you can still afford to pay the mortgage! This means you create stability in the portfolio. This is the primary reason multifamily has been the number 1 most resilient asset class in the USA for over 50 years and was only recently pushed off the no. 1 post by Medical Real Estate!
- You can create even more cashflow with some creativity - laundry service, car cleaning area, bicycle storage, wine cellar, fitness centres, big-boy-toy storage etc.
- Cap rates for quality multifamily complexes are trending down, creating upward momentum in capital growth over the long term.
- There are great tax breaks in some multifamily deals. We've had state tax credits issued to us in the capital stack in the past, negotiated property tax relief for over 20 years in 2 projects we own already and we use depreciation as an incredible tool to create tax-neutral cashflow distributions for our investors.
- Create spaces where people live and play and they can thrive! Happy tenants are the lifeblood of a multifamily portfolio.
- This is where the ultra-wealthy invest their money for long term income stability and wealth preservation. Why shouldn't you be doing the same thing?