Dear Investor-
We are excited to have the Peak Housing REIT in our list of available investments! By way of disclosure, we have an advertising relationship with this company, meaning we get paid for making this introduction. As always with these types of deals, consider this an introduction and not a recommendation. Every deal is unique and the responsibility to vet any and every deal you invest in still lies with you. This opportunity is available to accredited investors only (income of $200K+ or investable assets of $1M+).
Today's email is part of an effort to keep you up to date on one of the great investment options offered to the White Coat Investor Real Estate Group. You can join our group by subscribing here.
Peak Housing REIT Summary and Update:
The Peak Housing REIT is a privately held, evergreen, investment vehicle that owns 1,750 single-family rental (SFR) homes in Texas, Indianapolis, and Missouri. The REIT's investment thesis is to deliver a blended return based on a composition of 75% scattered existing home aggregation and 25% newly built-for-rent assets developed in-house. The PEAK REIT is supported by The Peak Group, a vertically aligned platform that transacts, manages, repairs, and builds single family rental properties. Their 100 person staff is located in DFW and is well poised to grow 50% in 2022. Their investor community continues to expand and includes over 550 (350 invested in the REIT, 200 in BFR JVs) accredited investors. Those investors (including Jim Dahle) value the SFR sector, where it is headed, and the diversification the Peak Housing REIT offers in 3 states and 6 markets.
- Since the funds inception in early 2020, investors have enjoyed consistent quarterly dividends (2% annualized) and a 21% increase in net-asset-value (NAV) in 2021. To date, the general partners in the REIT have invested over $6M in equity, alongside the current $42M raised from their community of 350 active accredited investors. Your funds will be put to work immediately and LP investors enjoy a 8% preferred return and a 80/20 waterfall structure thereafter.
- The Peak portfolio value has grown since the last report to $246M and the share value has increased to $12.94 from $12.16 last quarter. They added 388 homes for a combined acquisition price of $58M. Capital Appreciation will come from higher rental rates, home appreciation, and ground up development projects with enhanced upside potential. The distribution yield for the REIT now stands at 2% annually and is projected to increase gradually each year based on a maturing portfolio that has reached stabilization and size. The funds operators will add 300 homes in Q4, reaching 1,500 by the end of 2021. The forecasted growth of the portfolio annually from there will range from 1,500 to 2,000 homes, reaching 10,000 homes by 2026.
- The Peak REIT entered into Springfield, Missouri and Indianapolis, Indiana in the 3rd quarter of 2021. Previously the portfolio's homes were all located in Texas: Dallas Ft Worth, Lubbock, and Corpus Christi. Their economic and demographic research highlights up and coming growth markets that are of interest across the sunbelt and Midwest. Peak's research team values population growth, a diversified economy, above-average job growth, and affordability. States that are landlord favorable and are underserved by institutional firms are then selected.
- All of the SFR homes in the REIT are managed by The Peak Group, a vertically stacked operational platform that cover property management, construction, and maintenance. The Peak Group also operates two divisions, brokerage and title, that the PEAK Housing REIT utilize in the acquisition of the home. This vertical alignment enable the firm to compete with other buyers as we avoid delays from 3rd party participants, close faster, and often arrive at smart solutions for the seller
- Tax-Efficiency: Dividends received are taxed as ordinary income. However, any distributions above the PEAK Housing REIT's income is considered return of original equity in which the investor will not be taxed. They estimate at least 50% of dividends will not be taxed. How does this happen? As the PEAK Housing REIT, Inc. assets are all invested in the PH REIT OP, LP. Any income and depreciation produced at the PH REIT OP, LP level will flow through to the PEAK Housing REIT, Inc. The PH REIT OP, LP will utilize depreciation of each home to offset the rental income received by each home. This may result in more distributable cash flow than recognized income which will flow through to the REIT. This in turn will convert some of the investors cash distribution received into return of original capital instead of operating dividends.
- Lower Volatility: The diversified portfolio of stabilized homes provides downside protection. The desired investment hold period is 5 years or greater. You can reinvest your distributions easily and after the second year, quarterly liquidity is available (although you are incentivized to leave the money invested at least 5 years).
- All of PEAK's investors have access to a secure investor portal online. The portal provides easy retrieval of quarterly financial statements, monthly investment updates and annual tax statements (1099 tax form).
- The Peak Housing REIT investors receive monthly information on the performance of the housing portfolio, supported by industry trends and news. Not only is the report frequent, it is highly transparent. Investors get visibility on recent acquisitions and upcoming development projects-showing their investments dollars are being put to work.
- Consolidated REIT Financial Statements are shared via the investor portal 45 days after the end of each quarter
- Stockholders of PEAK Housing REIT, Inc receive a Form 1099-DIV (end of January for prior year activity) which shows their dividends and distributions received.
Invest with the Peak Housing REIT today!
Here are a couple of interviews that we have done with the Peak team:
- Podcast #235 - Pay Off Debt or Invest - featuring an introduction to Joe Ollis
- FB Live - with Ryan Bowers and Joe Ollis
Jim and Brett
James M. Dahle, MD, FACEP
Founder, The White Coat Investor
Brett Stevens, MBA
COO, The White Coat Investor
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