The Geneva Group – Strategy

The company aims to maintain a balanced investment strategy that uses a reasonable level of built-in and purchased equity to protect against decreases in property values and down markets.  At the same time the company will use moderate leverage made available through traditional real estate lending practices, in addition to our capital raises by our Investors and/or lenders to maximize the asset acquisition and cash on cash returns.

 Equity Strategy

In order to maintain a relatively low-risk profile across our holdings, it is the goal of the company to maintain at least 45% equity in all property holdings at all times (some exceptions may be made for value play opportunities where highly-leveraged bridge loans are used strategically for short periods of time).

Additionally, for fundamental investments, the company will operate with the long-term goal of owning each investment outright, and will therefore only remove equity from a property when the company decides it is in the best interest for all partners involved.

We will attempt to accomplish these goals using the following core investing principles around equity management:

All new asset purchases will be made with a maximum loan to value of 75%, based on both appraisals and bank assumed values of the property (assuming both are available).  This will be accomplished by either purchasing a property at below market value and/or ensuring that at least a 25% down-payment is made on the property at acquisition.

Once a property is acquired, it will be the goal of the company to ensure that at least 45% equity is retained in the property at all times.

The company will, whenever possible, borrow from our Investors and/or lenders at higher than average rates of return to purchase assets. Specifically, the following guidelines will be used when financing properties:

Traditional financing options such as mortgage brokers or banks will be used to acquire funding after the company has forced appreciation into  previously acquired properties.  Except in special situations, all acquired financing will be in the form of fixed-rate loans with an amortization period of between 15 and 30 years.

Situations that might warrant non-fixed rate loans would include: financing intended to cover short-term holding of “value play” and/or distressed properties that will be refinanced or sold or non-traditional financing necessary to satisfy seller requirements.

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