What is a Real Estate Fund?

A real estate fund is an effective way for a sponsor and a group of investors to pool their financial and intellectual resources together to invest in assets much larger than they could afford or manage on their own. Over 90% of large commercial real estate is purchased in groups of investors together. This process allows the everyday person access to the real estate returns and benefits that they would not be able to achieve individually.

The group of investors and the sponsor will put equity into the fund, and as a result own a percentage of the total fund. The fund manager will then deploy that equity into several different deals and over time provide the returns back to the investors.

The fund manager or “sponsor” initiates the project. In this case, Hukam Capital Group is the sponsor. We underwrite hundreds of deals a year, find the right market, secure financing, oversee the repositioning of the assets as well as the daily activities of the property management. The sponsor also provides quarterly reports, returns, and manages the disposition of the assets.

Role of the Fund Manager

The investor, also known as the “limited partner”, provides the equity required to fund the deals. The role of the investor is very simple, they invest their money in a deal that is run and managed by the sponsor, and then they earn a percentage of the project’s profits based on the equity they invested, and a pre-determined split between the investor and the fund manager.

Role of an Investor

The Value Creation Process:

We recognize you are busy, let us do the hard work!

  • Hukam Capital Group performs comprehensive due diligence and sensitivity analyses of every asset during the acquisition process. We target value-add multifamily investments in growth markets where we have the opportunity to increase income and long term valuation.

  • After closing on an asset with value-add opportunity, we will push to increase our cash flow and valuation by rebranding the property, bringing rents up to market, rehabbing interiors & exteriors, and bringing in higher quality tenants.

  • Once we have increased the value of the asset, we refinance and provide our investors with a significant portion of their originally invested capital back.

  • Hold onto the property in steady state and provide our investors with returns from our cash flow quarterly. Continuously ensure our investment remains competitive and well-maintained.

  • After our value-add efforts and market appreciation, we sell the asset for a profit and return the proceeds to our investors!