Hidden treasure in the Nevada desert? A surprising real estate investment opportunity.

Dear White Coat Investors,

Is it still possible to find undervalued real estate investments?

We believe it is, but stumbling into these deals while we manage our medical practices, lives, and families is extremely rare.

That's why White Coat Investors partners with sponsors who do the heavy lifting for us and our investors.

For example: What if you could acquire a house with below-market rent of $350…on a street where similar homes currently rent for $2,000? That would be quite unlikely, agreed?

Yet these are the types of deals our professional real estate partners seek out on behalf of our investors. This email outlines a story like this.

One of our marketing partners, Wellings Capital, manages a diversified fund of recession-resistant commercial real estate assets. This includes self-storage, RV parks, mobile home parks, and more. I (Jim) invested in their Wellings Real Estate Income Fund last year.

By way of disclosure, we have an advertising relationship with Wellings Capital, meaning we get paid for making this introduction and sharing this content. 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. Past performance is no guarantee of future returns.

Their founder, Paul Moore, published a popular book on self-storage investing a few years ago that outlines a profitable strategy to acquire struggling facilities from mom-and-pop owners, upgrade them, and eventually sell them to an institutional buyer.

Here is the story of a surprising self-storage investment they recently made.

This self-storage facility is in Henderson, Nevada, adjacent to Las Vegas. It was owned by the original 1982 builder for over four decades. The facility came with over 40 years of handwritten records and no online marketing presence or management technology.

The manager collected rent in person, cash only, and that's if the tenants paid at all. And when they didn't pay, the manager rarely evicted any of them.

The owner provided quite a few free units to family and friends, which included some homeless tenants in violation of the law. So it's no surprise that the facility was in need of deferred maintenance, fresh curb appeal, and enhanced security.

But here's what was so surprising…

The previous owner was charging $60 monthly rent on 10' x 10' units. The going market rate for similar units in Henderson is $148. Here's what that means:

The facility's rents can be increased about 2.5-fold and still be competitive.

The new asset manager has also identified a variety of other value-adds that may enhance income and property value. These include selling retail items (like locks, boxes, tape, and bubble wrap), and adding more storage units on the vacant land acquired with the property.

While residential real estate values are based on nearby comps, commercial real estate values are directly proportional to income.

All other factors equal, doubling the Net Operating Income of a commercial real estate asset doubles its appraised value. And this effect is magnified on properties that are leveraged.

So imagine just how much the increased income from this facility could drive value and investor returns.

This may sound like a once-in-a-lifetime deal. But from what Paul and the Wellings team tell us, it's certainly not. Similar "diamond-in-the-rough" properties are hidden all over the U.S. Of course, you probably don't have time or interest in searching out these properties, so that's where Wellings Capital comes in.

The Wellings Real Estate Income Fund serves as a due diligence partner for investors. They are on a continual search for operators who are experts at finding deals like these, turning them around, and providing profits to investors through enhanced operation and eventual asset sale. Many assets in their prior funds have provided a 100% to 200% cumulative return on equity to investors, and they expect this one to perform similarly.

One last note on safety. Everyone is and should be concerned about the safety of their principal. This is something that should always be foremost in our decision-making. Most of investors' trouble these days stems from investing in assets with risky debt. The underperforming asset described above was acquired for cash. The new managers are hard at work attempting to stabilize operations and cash flow. The plan is to add financing to this investment once performance is improved.

This approach is structured to maintain safety, provide additional ROI to investors, and return some equity to be redeployed into other profitable investments. This is one of the benefits of investing in a diversified fund.

This acquisition is part of The Wellings Real Estate Income Fund. This fund is currently raising capital. They project ongoing annual cash flow from operations averaging 5% to 8%, plus appreciation to bring total net investor returns to 12% to 15% annually.*

Please note that Wellings Capital isn't a fit for every investor. For example, if you like to hand-pick individual investments and stay involved in asset management, this fund is not for you. And if you like short-term holds, you should probably look elsewhere since Wellings Capital believes longer hold times drive superior results.

Click on the link below if you'd like to learn more about the Wellings Real Estate Income Fund:

Check out the Wellings Real Estate Income Fund today!

Thanks for your time. As always, your feedback is welcome and appreciated.

Jim and Brett

James M. Dahle, MD, FACEP
Founder, The White Coat Investor

Brett Stevens, MBA
COO, The White Coat Investor

* All investments are subject to risks, including the loss of all principal invested. Past performance is no guarantee of future returns, and the investment objectives of WREIF may not be achieved. Diversification does not ensure a profit or protect against a loss. Please read the offering memorandum before investing so that you fully understand the risks. Wellings Capital and White Coat Investors are not affiliated. Consult your tax or investment adviser before investing.

We only want to send you emails that you actually want.

Unsubscribe from these Real Estate Opportunities emails

Subscribe to our monthly newsletter
Subscribe to the weekly blog post summaries
Subscribe to our daily blog post emails
Find out about real estate opportunities
Stay informed about events and conferences
Hear about real estate webinars

If you NEVER want ANY emails from us again, you can unsubscribe from EVERYTHING | Update your email address by clicking here
White Coat Investor | P.O. Box 520421, Salt Lake City, Utah 84152