Properties acquired by Trinity are typically in some phase of foreclosure. Acquisitions are three-tiered and divesture, or exit strategies, are layered to protect invested capital in the event one exit falls through.
Market Opportunity
Proliferation of poor underwriting (NINA, 105% LTV, option arms, “sub-prime” borrowers, stated income loans, exotic loan products) fueled a bubble with unsustainable appreciation. The delinking of asset ownership (originators selling loans to secondary market and then securitizing loan packages and partial loan packages to be sold to institutional investors) combined with this unfounded asset price acceleration, a turbulent global economy, and lack of growth planning in many areas has created an incredible opportunity for cash buyers with known outlets or resources to acquire in volume.
Acquisition
Properties are acquired through all-cash purchases. This adds strength to the lower offers made by Trinity and by acquiring real estate in bulk, acquisition basis is lowered further. Acquisitions are typically in some stage of foreclosure with a bank/lender or municipality.
Exit Strategy
Trinity has acces to an incredible opportunity in today’s marketplace – a strong host of acquisition firms. Trinity expects to implement a three-tiered exit strategy on each property – sell as-is (smallest markup), renovate and sell to a firm looking to hold and rent, renovate and sell to an owner-occupant through a traditional sale or hold a note (highest markup). For select properties that meet management’s stringent criteria, some units may be held in Trinity’s portfolio or sold to a sister company comprised of investors looking for the residual income and tax advantages offered by residential rental real estate.
Profit Targets
Trinity is targeting a minimum profit margin of 15% on as-is sales and a minimum profit margin of 25% on properties that are renovated. For properties held in the company portfolio or in a sister entity portfolio, the annual rate of return on rental properties is a 40% gross annual return before taxes.
Please note that any return estimations defined herein are estimates and are subject to various assumptions and risks and that targets may not be met. Please see a Prospectus for full details on anticipated investment performance and risks associated with this type of investment. This is for information only and is not an offering of securities of any kind.
