Frequently Asked Questions

Historically, real estate and stocks have been the cornerstones of wealth creation. Certainly, balance and diversification are generally a good strategy. However, over the past several years the stock and bond markets have become less predictable. Investments in single home flips and rentals have seen competition from institutional investors making it more difficult for individual investors to find viable single family investment properties. Increases in construction costs and higher interest rates are having the effect of reducing the demand for single family homes, driving people toward rentals which in turn, is driving multi-family properties toward higher occupancy and higher rents which translates into higher investor returns on multi-family investments. Higher construction costs and supply constraints are also contributing to supply shortages in the housing industry. On the other hand, the Dallas area continues to experience a tremendous amount of in-migration from other areas of the country, therefore increasing the demand for housing. Higher interest rates have had the effect of driving potential home buyers into the rental market. As prices and interest rates rise on single family homes and people contend with higher food prices people are increasingly seeking housing in less expensive homes or seeking rentals as opposed to purchasing. Passive investment in the Multi-family property market typically provide consistent cash flow as well as appreciation and tax shelter and they have the advantage of being a good inflation hedge since people always need housing. Sapient’s projects typically provide much higher rates of return that the stock or bond markets as all Sapient projects much have the potential to provide the investor with a 15% (non-leveraged) to 20% IRR (leveraged).

Project capitalization, financing, organization and development, extensive due diligence on each project, feasibility analysis, rent comp surveys, market analysis, competitive bidding, operational management supervision, construction supervision, development design, quarterly operational and financial reporting, investor liaison and functions as the tax partner.

The Fund projects that it will produce an annual average return over five years of 5.1 times (5.01X) the investor’s original investment or roughly a 100.12% annualized rate of return for the investors. These exceptional rates of return are generated as a function of the leverage created by utilizing the municipal bond financing which replaces the capital invested by the Fund for land acquisition and predevelopment expenses. In this manner the Fund’s capital is only utilized for a short period of time (typically 60 to 120 days) until such time as the municipal bond funds are deployed and replace the Fund’s money advanced for land acquisition and pre-development expenses.