ARIXA FUND II
SINGLE FAMILY HOME RENTAL PROGRAM
Purchase one to four unit residential properties at wholesale prices; renovate cost-effectively; rent for target 7% yield on cost; apply 50-65% leverage; sell upon recovery of U.S. housing market to achieve total returns in the mid to high teens, net of fees. Resell a portion of homes soon after renovation to enhance returns, where possible.
HOW IT WORKS
Arixa purchases a house with a high rental yield and strong appreciation potential, located in a neighborhood with access to transportation, and close to job centers and good school systems.
Arixa performs extensive renovations to create a home with more features, better design aesthetics, and more functionality than comparable rental properties.
The home is rented to a high quality tenant who is willing to pay a premium for a nice place to live.
- Arixa provides a high level of service to each tenant in order to minimize turnover and improve the overall performance of the portfolio.
- Arixa collects rent and passes income onto investors.
- After a period of 5-7 years, Arixa will sell its rental home portfolio and distribute profits from capital gains to investors.
RATIONALE FOR SINGLE FAMILY HOME RENTAL INVESTMENT STRATEGY
Banks need to move hundreds of thousands of single family homes off of their balance sheets over the next few years.
STRONG RENTAL DEMAND
Rental demand is robust as families who lose their homes to foreclosures frequently want to rent a home in the same area for continuity of schools and family ties. In addition, as the economy recovers, household formations are rising from depressed levels, further supporting rental demand.
BENEFITS OF INVESTMENT STRATEGY
Going-in yields (capitalization rates) are frequently 7% or more, which is often higher than yields on apartment buildings in the same markets.
UNCORRELATED RETURNS & INFLATION HEDGE
Returns of this strategy are relatively uncorrelated to public equity markets. In addition, rental housing provides a hedge against inflation.
Many properties are purchased at discounts of 30-50% below peak values and at deep discounts to replacement cost. Even a partial recovery of prices will produce substantial capital gains, especially given moderate leverage which Arixa expects to use
Our strategy features social benefits beyond strong risk-adjusted returns. Each home renovated improves the neighborhood, contributes to a recovery of the housing market, and provides quality housing for families.
Arixa Capital’s funds are only open to accredited investors as the term is defined by the Securities Act of 1933 under Rule 501 of Regulation D. Before accepting an investment in one of Arixa’s Funds, Arixa Capital must verify an investor’s Accredited Investor Status.