The Pax Properties Investment Strategy
Pax Properties highlights this vintage 2014 video because it demonstrates the durability and effectiveness of Justin Ford’s CAP strategy of focusing on the things we can control: Cash Flow, Amortization, and Positive Leverage. A strategy that avoids speculation and has fueled our
outperformance during the financial and housing crash of 2008-2009 as well as through the current Covid-19 pandemic.
Why Real Estate Investments?
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Real Estate as an Asset Class is Supported by Long-Term Fundamental Demographics
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Properly Structured, Real Estate Offers Double-Digit Returns Independent of Inflation
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Historic Low Interest Rates Creates Opportunities for Superior Returns for the Conservative Investor
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Strong Macroeconomic, Demographic and Migration Patterns Support Long-Term Demand for Multifamily
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Apartments and other Select Income-Producing Properties
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Unprecedented Money Creation Places Real Estate in a Strong Position as an Asset Class for Protection Against Inflation
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Tremendous Tax Advantages Not Available With other Asset Classes
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The CAP Factors
Why A Real Estate Fund?
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Diversification Across Geographies and Property Types
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Ability to Invest in Multiple Property Types and Opportunities: Value-Add, Conversion, and Turnkey Strategies
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Minimizing the risk associated with a single asset
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Multiple Streams of Income From a Single Investment
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Spreading risk across different geographies, economies, and regulatory atmospheres
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Not tied to or related to changes in the public markets (like REITs)
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Fund Portfolio Can Provide Economies of Scale to Streamline Expenses and Enhance Returns
Why Invest with
Pax Properties?
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The CAP Strategy – Proven Real-World Business Approach to Real Estate Investing
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Vertically Integrated to Maximize Efficiencies and Quality
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20-Year Track Record of Outperformance Through Booms and Busts
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Focus On Capital Preservation
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Diversification to Mitigate Risk
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Strategies to Maximize Real Estate Tax Benefits
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Strives to Deliver the Right Kind of Appreciation
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Strongly Favors the Interests of the Investor Over Fund Management
Investment Philosophy
For 20 years, Pax Properties has bought, renovated, strategically financed and improved the operations of dozens of income-producing properties in over ten cities spanning four states. In the process, our proprietary CAP Strategy approach to investing, has helped us maintain a perfect track record of preserving capital while also delivering high cash yields and competitive total returns.
During that time, Pax has developed in-house property management, asset management, materials-sourcing, and construction teams. This enables us to operate with an “ownership mentality” at the property level, significantly reduce maintenance and renovations costs (especially on major CapEx items such as roofs and AC’s), and create and maintain quality places to live and work.
Acquisitions Criteria
Pax Properties targets properties:
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In growth and value markets
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Primarily in the Southeast and lower Midwest including Florida, Georgia, Oklahoma, Texas and the Carolinas
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Class B/C properties with significant potential for value creation through improvements to the property and operations
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Underperforming properties where our award-winning management team can increase income and minimize expenses
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100+ multifamily units is our focus but we will also look at other undervalued commercial income-producing properties
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Our typical projects range from $5 million to $25 million each in total deal cost (acquisition price + capital improvements)
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To further reduce risk, we focus on properties selling below or close to replacement value
Pax Properties offers sellers, fellow syndicators, and strategic equity partners a history of and commitment to professional due diligence and a successful closing. Our roster of over 250 repeat accredited investors as well as local, regional and national lenders enables us to move quickly on each transaction. If you have a property that meets our criteria, please contact us.
Investment Approach & Structure
Acquisitions
Construction
Management
Property
Management
Asset
Management
Marketing &
Outreach
Investor Relations
At Pax Properties, we’re not price chasers or “hot market” speculators. We treat real estate like the business it is. Fundamentally we put roofs over people’s heads so, we need to do it in a sustainable way. That’s what the CAP Strategy is all about. Its discipline makes us focus on the things we can control so we can be successful over the long term, through all sorts of markets.
This means buying at cash-flow prices and only using fixed-rate amortizing loans for our long-term debt. Then, we combine the two in a way to produce positive leverage, increasing total returns without dramatically increasing risk. Those are the “CAP” Factors (Cash Flow, Amortization and Positive Leverage). Then there are the “Plus” Factors: we also target markets with short and long-term population and job growth, and we seek to buy below or close to replacement cost.
But that’s not all we do.
Once we buy a property, now we bring it up to its full potential. So, we strive to consistently improve as operators. We also remain committed to honoring our obligations, especially in tough times. And all key decisions are guided by the idea that we must deliver value to receive value.
That means making money for and with our investors, not off of them; building a valuable company for and with our employees; and adding value to the communities where we take on the responsibilities of ownership.
The collaboration of Pax Properties fully integrated platform enables us to successfully implement the property’s business plan, laid out above, immediately upon acquisition. Pax Properties process in real estate investing is a company-wide effort that has shown to maximize investor returns while carefully focusing on preserving investors’ capital.
Get a Free Copy of the CAP Strategy Explained
Bubble Proof Real Estate Investing for Life-Long Cash Flow
