As Ark7 diligently expands its curated pool with new properties, we uphold strict selection criteria to maximize returns for investors. Our rigorous process evaluates factors such as location, property condition, rental potential, and the best places to invest. By maintaining these high standards, each property offers opportunities for passive income and portfolio diversification. In this blog post, we’ll discuss how Ark7 selects properties, our unique approach, and the substantial benefits it provides to our investors.
Here are some intriguing facts you might not know:
- Our acquisition team screens over 1000 potential properties each month to find the best deals possible for investors. We focus on Single-Family and Multi-Family rental properties in high-growth but not overly heated cities for optimal returns. Less than 0.02% of the properties reviewed will pass our due diligence evaluation.
- Behind the scenes, extensive preparation takes place before an open offering. Ark7 acquires each pre-vetted property and then proceeds to undergo SEC Reg A+ qualification to offer it to every investor in fractional shares. Typically, we retain between 1% to 20% ownership of each property, sharing in operational profit and loss proportionally, just like any other investor.
- We take a hands-on approach to property management, either handling it ourselves or through trusted long-term partners. This ensures properties are well-maintained and achieve optimal occupancy and rent rates. Tenants communicate with managers via the Ark7 Renter App. Leasing, property management, accounting, and tax filing benefit from automation using our internal tools. This commitment to efficiency and transparency aligns our interests with those of our investors and enables us to serve the community with confidence.
We understand the importance of every investment decision made by our investors, and we mirror this importance in our approach.
Property Sourcing: A Strategic Blend of Art and Science for Investors
Property acquisition at Ark7 is powered by big data and local expertise. Our comprehensive models evaluate over 100 indicators, spanning socio-economic factors, real estate market zoning conditions, and property-specific micro factors. This data-driven approach enables us to pinpoint properties poised for stable or increasing growth over time.
The Significance of Location
Experienced Investors predict a location’s potential using the “Law of Supply and Demand.” Three primary factors drive long-term demand: significant socio-economic development, population influx, and favorable domestic policies. In regions where housing demand outstrips supply, prices inevitably rise until equilibrium is restored. This principle applies equally to rental and house prices.
Consider two recent Ark7 cases as illustrations: we listed three properties in the burgeoning life Science Innovation Hub of University City, Philadelphia, and three more near the Phoenix-Mesa-Casa Grande area, strategically located within 20 minutes of the upcoming Silicon Valley, or Silicon Desert, to be precise. These areas are central to master city development plans, attracting major employers and innovative start-ups. Consequently, a highly skilled workforce and increased income draw young families, renters, and homeowners alike.
These developments gradually manifest in the housing market. For instance, the year-over-year (YoY) Median Home Value in Casa Grande surged by 40.6% as of May 2022 following the announcement of new construction plans by the semiconductor giant TSMC and its suppliers. With a 5-year Compound Annual Growth Rate (CAGR) of 13.4%, this trend is projected to continue. We analyze this metric across various time frames to capture both short-term impacts and long-term market trends.
The good news is that Ark7 handles all due diligence to score and find the right investment rental homes, so our investors don’t have to spend valuable time on this task. We consistently share market insights with investors, while our expert acquisition team pre-vets each property and discloses its key financial data and operational details on the Ark7 website and mobile app, empowering investors to make confident decisions.
Other factors evaluated during acquisition are related to real estate market conditions and the surrounding communities. A well-maintained home in a community with excellent accessibility, appealing aesthetics, and amenities like top-rated public schools, parks, and essential services is more likely to offer greater appreciation potential. Analyzing “Days on Market” and “Sale-to-List Price” helps project the popularity of a potential property to acquire. Additionally, we consider rental rates, rent-to-sale ratio, local rental or zoning policies, natural factors impacting insurance and maintenance costs, property tax, and rent sales tax. These factors reflect a property’s ability to generate stable monthly income compared to its market value.
Every Home Is Unique
When we zoom in on a specific property, the evaluation score can vary significantly, even among neighbors on the same street. Ark7 may prefer a 10-bedroom Duplex near a university campus for student housing, like Philadelphia-D2, or a one-story open floor plan Single Family House catering to tech company employees in Chandler, in the Greater Phoenix Area.
In addition, factors such as the building’s age, appearance, floor plan, and infrastructure conditions—taking into account local topography—are all crucial considerations before proceeding with an acquisition. Ark7 collaborates with professional inspectors to examine each property, ensuring it aligns with the intended rental strategy and meets our high standards.”
Our Curated Marketplace
Downloading the Ark7 real estate investing app and investing smart with Ark7 is easy. Our curated marketplace serves as your gateway to purchasing premium real estate in fractional shares.
Ark7 believes in modernizing real estate investment through technology and data insights. We take the knowledge gained about each property and transform it into easily digestible information for investors. It’s time to bid farewell to the mysterious black box and embrace a new era of transparency and empowerment.
We also strive to make real estate investing more accessible by breaking ownership into shares that our investors can purchase and trade, with each share priced from a few bucks to a few hundred. Investors sell their shares on the trading market to liquidate and realize potential appreciation.
Ark7 evolves alongside our investor community, and our acquisition strategy may adapt accordingly. We have placed an even higher priority on consistent rental income in light of market dynamics this year. In 2024, we are focusing on evaluating Single Family Homes in Georgia, Texas, and California, aiming for annualized returns of 5% or more. Additionally, we are closely monitoring the North Carolina and Florida markets. We continue to seek short to mid-term rental and student housing opportunities, with higher annualized returns targeted at 6% or more. Visit the Marketplace to explore our full selection of current listings and stay tuned for future releases.
