What Do Real Estate Private Equity Firms Look For? | Forrest Jinks, Altus Equity Group

Joshua Wilson: 0:00

All right. So Forrest, for the private equity community here, why don't you tell us a little bit about who you are and maybe what kind of deals you guys like to focus on?

Forrest Jinks: 0:08

So my name is Forrest Jinks, as you alluded to, and I'm the CEO of Altus Equity Group. We're a real estate private equity company. And I would say we're a little bit different than many private real estate private equity companies in that we're generally focused on long term. We want every deal to be able to be in our portfolio forever. Doesn't mean that it will be. We certainly will sell if the price is right, but we want to be able to not ever have to sell. And second thing is we're very focused on risk-adjusted returns. So while a 20% return is better than a 12% return, if you get it, if you're looking at pro formas, you have to take in risk and what are the likelihoods of those returns and how much risk do we want to take on. So we're we're always trying to outperform the risk that we're taking on in any one particular investment. The third thing is we look at net returns, not gross returns. Gross returns are great, but if I just get crushed in taxes and end up with not enough money to buy Top Ramen, it doesn't do nearly as much for me as a lower return, but more money in my pocket at the end of the day. And then I think the last thing is, and this is actually our our hedgehog, to to quote Jim Collins, we want to provide the best investor experience in the world. Returns are a part of that, no question. Risk-adjusted returns are certainly a part of that. But the amount of stress it takes as an investor is a big part of that. Like, we invest to make better lives for ourselves, not to add a bunch of stress, right? Like, some people can handle stress more than others. They're better having a more volatile portfolio, maybe doing options and different things. But for the most part, we're trying to look forward and say, how do we build a better life? So we want to be really communicative. We want to be transparent. We want to... it's never fun to provide bad news, but we want to do it early and directly. And then good news, want to share good news and just make that experience better than any place else they'll invest. And you know, that's gonna look different depending on the type of real estate that we're doing. It could be a private note. Well, you know, there's not a lot to to talk about there. It's like, yep, we got paid again. Or let's say we're doing a ground-up lease-up. Things are changing daily, right? We're negotiating with tenants, or if it's multifamily, hopefully we're doing leases almost every day. So each one's a little bit customized, and, you know, to use the term everyone uses now, bespoke. And we do that from an investment perspective too. We're not necessarily tied to a specific type of real estate. We certainly have our favorite food groups, but as as markets turn and shift and morph, we want to make sure we are avoiding chasing the hot topic and doing, really trying to to get the best value for the investment.