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| Additional information |
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| Legacy Capital Partners |
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Overview:
Legacy Capital Partners, Inc. (“LCP”) focuses on opportunistically investing capital in real estate markets with a value-investor orientation and a conservative, margin-of-safety approach. We acquire real-estate-backed notes and traditional real estate interests to capitalize on investment opportunities, which we believe have strong potential upside while protecting against loss of capital. We also make real-estate-backed loans where we feel confident we are well protected against the risk of loss while giving us excellent prospective returns.
LCP specializes in the acquisition and value-add turn-around of distressed real-estate-backed debt and real estate assets. In an ideal opportunity, we add value multiple ways: by opportunistically acquiring distressed real estate debt at a healthy discount, working through the necessary legal process to obtain direct ownership of the real estate, and then stabilizing the property. We commit the needed time, expertise, and capital towards improving occupancy rates, undertaking deferred maintenance, and professionally marketing the property. By removing distress from the property, we increase the asset’s value, while also maintaining a margin-of-safety.
We are continually scouring the market for excellent opportunities. We investigate and pursue many deals and, even with our conservative approach; we usually find one or two deals we cherry-pick every few months.
Typically, we buy real-estate-backed mortgages at a healthy discount to their fair market value, take those mortgages through the foreclosure process, and quickly liquidate the underlying collateral property. This process usually takes one to two years, unless we believe that additional time and stabilization efforts are worthwhile and will create appreciably higher profits. Because the process of buying real-estate-backed loans is more complicated than a direct purchase of real estate, it is less competitive and therefore provides us with an extra margin of safety and potentially higher return.
In our typical deal structure, we pay an agreed-upon return on invested funds and then split the profits with investors above that threshold. We are unique in the real estate market because we charge no fixed acquisition, disposition, or management fees and only get paid after investors. What this means to you is that in a typical deal:
• We won’t make a dime of profit, until you get 100% of your investment back, AND
• A strong rate of return on your money, which builds each year from the preferred return until all of your capital is returned.
• Above that threshold, we split the remaining profits with you (the split varies based on the specific deal).
Therefore, even though we do all the work to find great quality investments and take all the needed steps to stabilize and add value to the deal, we only make money after you have made an agreed-upon return on your investment. Because we do not make a profit, even with all our time and effort, until you have received your return, your investment is well protected. We have never lost investor money throughout numerous successful projects and also invest some of our own funds in each deal alongside yours. Since we do not receive any profits until your capital is returned, it gives us incentive to carefully choose our projects and return your capital to you as quickly as possible. Our track record speaks for itself. |
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