Investment Sponsor Spotlight: Starting Point Capital
Written By: Daniel Gleich
We recently met with Jeremy Dyer, Founder and Managing Partner of Starting Point Capital.
1. What types of investments does Starting Point Capital bring to their investor base?
We provide investors with an opportunity to invest in multi-family properties, and typically in markets around the country that are growing with diverse populations and occupations. We tend to look into areas where we can drive appreciation to bring investors a good return on their investment. Most of the properties we acquire have 100 units or more.
Typically, there is opportunity in workforce housing markets where properties might have been built in the 1980’s or 1990’s. Starting Point Capital can reposition the asset to increase rent. This increases the investor’s return on investment, which has a direct correlation for what we can sell the asset for in typically a three-to-five-year period.
2. Describe the ideal investor that Starting Point Capital aims to reach.
Our investors are higher net-worth individuals who want to diversify beyond Wall Street and onto Main Street. Starting Point Capital seeks investors who like real estate, who are not looking for the challenges of quintessential tenants or termites and are comfortable with investing capital toward a project with a team that they can trust. This is an opportunity to really get into the real estate game.
3. What are key elements an investor might consider when choosing Staring Point Capital and its investment sponsors?
Starting Point Capital boils it down to three T’s: trust, track record, and transparency.
Fiduciary responsibility and capital preservation are crucial when it comes to trusting a fund where you are investing your capital. At Starting Point Capital, we like to know that the sponsor has a track record where they’ve had deals that have gone full cycle in the past. We ask how those opportunities have gone for their investors, and if there are former case studies of previous investments they have completed. Track records are incredibly important to us.
Starting Point Capital typically likes to raise capital for sponsors that have at least half a billion dollars in assets under management, and at least one dozen deals that have gone full cycle.
The third “t” is transparency: Starting Point Capital values being transparent and communicates with investors when events arise. Quite often in real estate, deals do not always go as expected.
4. What are Starting Point Capital’s views on diversification on investing?
Starting Point Capital supports the diversification of asset classes. We try to bring opportunities to our investors that allow them to diversify beyond Wall Street. Even within multi-family real estate investments, we also encourage diversification of assets: self-storage, assisted living, retail, flex office, marinas, or RV parks. There are a variety of asset classes that people can invest in.
Starting Point Capital is also a perfect proponent of diversification of sponsors. We work with multiple sponsors that are primarily focused on different markets. When it comes to varying markets, we are diversified in the specific market where those assets are located. Starting Point Capital has traditionally favored the South and the Midwest markets in the United States.
5. Does Starting Point Capital invest their money in these deals?
Starting Point Capital does invest our own money into these deals to show alignment of interest. We are also bringing investment opportunities to our investors where the sponsors themselves are investing a significant amount of their capital into those deals as well.
We typically like to see about a five to seven percent sponsor capital investment to show a true alignment of interest among all participants in the opportunity, which primarily includes the general partners and limited partners.
6. How transparent is Starting Point Capital about its business plan and operations?
Starting Point Capital’s goal is always to give investors all the information about our business plan as it becomes available to us. Our typical communication protocol is one time per month. When we communicate to our investor base about how the business plan is going, investors can expect to receive the full financials, the occupancy level, how the renovation efforts are proceeding, and any challenges that have come along.
The last thing that Starting Point Capital wants to do, is to communicate to investors three months too late about a challenge that we were aware of, because that would express to investors that we were not being fully transparent at the time that a particular challenge arose.
7. What opportunities are ahead for Starting Point Capital?
The future is bright for finding new investment opportunities for our investors, primarily because the sponsors that we work with are in strong financial positions to capitalize on opportunities.
These opportunities are a direct result of the interest rate challenge we face. The sponsors we work with are finding deals that are at a 20% discount from where they were twelve months ago, so that is the main opportunity for Starting Point Capital.
Starting Point Capital is bringing on a few new partners to expand the team. We aim to grow our network, find ways to increase our brand and presence within our existing investor base, and are actively looking to bring in new potential investors.
To speak with a Self-Directed IRA Specialist about investing in multifamily real estate with your retirement funds, schedule a call today.
This content is for educational purposes only and is not an endorsement.
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