Is Your Operator Recklessly Boosting IRR?

Many would say IRR is the most important metric in any real estate investment.

Yet, there is always a story behind that number.  Does IRR paint the full picture?

Here’s the thing about internal rate of return:  It doesn’t take into account inflation or market cycles or your personal needs as an investor.

Yet to a syndicator, that number is EVERYTHING.  As we’ve seen in the past, some operators over-leverage projects to boost IRR.  Some will sell a great asset early just to lock-in an IRR that they can add to their track record.

As investors, we have different needs.  Maybe we prefer to hold for cash-flow or hedge against inflation.

Flexibility is the KEY to preserving and growing your family’s wealth over time.

Is your operator aligned with those longterm goals?

Do they consider how their decisions interact with your other investments?

There are many levers you can pull to your advantage.  That’s why it’s important to work with a flexible operator - someone who respects the timing and nuances of your overall strategy.