We invest in high-quality, recession-proof A and B Class apartment communities with 12 or more units. Investments in this asset class tend to be lower risk with than a 1% default rate and it’s Canada Mortgage Housing Corporation (CMHC) insured.
We invest in real estate assets that generate immediate cash flow, allowing us to mitigate the overall risk for us and our investors in order to cover the debt service and expenses from Day One!
We focus primarily on growing markets in the Greater Toronto Area. We invest in growing markets with strong job and population growth indicators and rising job diversity. These factors allow us to benefit from increased rental demand and market appreciation.
The projected returns will vary from deal to deal and are never guaranteed. That being said, Spark typically looks for deals that can provide a 7-8% annual return along with a 13-15% Internal Rate of Return (IRR).
The minimum investment is $50,000.
The hold period is typically anywhere between 4-5 years. During the first 2-3 years, we get to work renovating the units/exteriors and adding value to the property. The property is re-branded to attract higher quality tenants and higher rent while you receive regular cash flow returns.
That being said, we know that 5 years can be a long time, and life happens. If a major life event happens and you need out, we will do everything in our power to help you get out of the investment, including buying out your shares ourselves if need be.
Commercial real estate assets like apartment buildings operate independently of the stock market. In fact, they tend to fare better in recessions, because more people tend to downsize. They also tend to be safer investments than single family homes because if one tenant moves out, you still have the others to pay down the mortgage along with any operational expenses the property will incur.
Some deals begin distributions within the first quarter, others in 6 to 9 months. Distributions can occur monthly or quarterly depending on the deal.
A private fund allows you to diversify your portfolio. You have access to larger asset classes across different geographic markets that you wouldn’t be able to do otherwise on your own.
Our investors have the opportunity to leverage our specialized knowledge, and experience as real estate landlords, owners and operators.
Purchasing larger multifamily properties have economies of scale with multiple units on the property. Expenses are spread out keeping the cost down and the value driven up by value-add strategies to force the appreciation.
In a Real Estate Investment Trust (REIT), you’re investing in a company that holds a portfolio of properties. Each REIT specializes in a specific asset class, i.e. apartments, office space, or shopping malls. Investors in REITS generally only have the opportunity to participate in properties that are already producing stabilized income. They receive quarterly income distributions from the rent that is generated and realize minimal growth over time as the value of the properties naturally appreciate. Not to mention, an investor in a REIT, does not have direct ownership in the underlying asset.
When you invest in a private fund such as ours, you become our partners and will have direct ownership of the asset! You will have full access to our teams specialized knowledge and expertise. Unlike a REIT, you will have the opportunity to invest much earlier into the process.
By getting involved right from the very start, from the acquisition stage, you will have the potential to experience the full appreciation of the real estate asset as they are transformed from underperforming to highly desirable rental properties.
Investors will receive a quarterly report that provides property updates, updates to the business plan, details on net operating income and expenses.
We’re sometimes asked why we don’t consider other investing strategies. The answer is that we have – however, we’ve built our experience around the two investing strategies above, as we believe they are the best way to help us achieve our collective financial goals. A few of the reasons we don’t consider other strategies include:
Flipping – this is a high effort and tax inefficient investing strategy that misses the potential for long term value
Turnkey Properties – while buying turn-key rental properties is easy, returns are typically not very attractive. Low cash flow puts us at risk of losing cash during market fluctuations.
Rent-to-own (RTO)- this can be attractive in some markets (e.g. flat to low growth), but we believe that RTO runs a risk of missing out on appreciation. Plus, it takes considerable effort to identify potential RTO tenants, which still frequently don’t work out.
Wholesale – higher effort and lower reward technique that doesn’t work well for partnerships. There are many excellent wholesalers with strong businesses and excellent deals – we prefer to work with them vs. build out own wholesale business.
We look forward to partnering with you to build true wealth for your family so you can spend more time with your kids and live a meaningful and intentional life by design.
To start, please complete the form below so we can learn more about you and your investing goals.