Over the past several years, Three Arch Investors has funded and completed a number of successful Flip and Residential Rental Programs.
Our Flip programs have made an average of 10% on each home, flipping the homes about every 120 days. Even if housing prices fall while we own a foreclosed house, this will result in maybe a 2% reduction in profits on that transaction. However, since we then buy our next house in the same market environment, we hopefully also can purchase the next property at 2% less as well.
Therefore, we are still making money, because the fall in values in a small percentage of the profits due to the limited time period we own the houses. For example, let’s assume we initially expect a 10% profit at the end of one flipping cycle, but the house falls two percent in value before we sell in 120 days. We still make eight percent on the transaction, and if we flip 2.5 times per year, then the annualized return is 20%. Read more about Our Flip Programs.
Residential Income Fund
Our 2012 Residential Income Fund was specially designed to safely pay quarterly dividends to our shareholders of between 5-7% from the renting of executive homes throughout the West Coast. Today, with the new Federal Reserve policy of zero interest rates now projected to continue into 2015, we strongly believe that accredited investors need to consider alternative income sources to boost their passive incomes.
Only in the last 18 months have we seen the first real evidence of home price stability and even improvement, which provides us with the confidence that the bottom of the house market was achieved in 2012. Now we can clearly see an improving residential market. Read more about our Residential Income Fund.
Multi-Family Apartment Development Program
Accurately predicting the housing meltdown in 2007, Three Arch Investors shifted our development focus by scaling back on new construction projects while looking for new opportunities. Our patience paid off when we identified a prime market for purchasing distressed real estate and re-selling these properties in a relatively short time period. Beginning in 2010, we acquired more than 100 foreclosed homes which were rehabbed and sold in a series of six partnerships.
During June 2013, as the single family home market recovered, we came full circle. We once again believe in the building of new multi-family communities in solid core markets with good job growth and strong rental demand. We found these conditions in areas such as Denver, CO; Seattle, WA; Portland, OR; Las Vegas, NV; and Orlando, FL, to name a few. To support our efforts to reach a larger cross section of markets and opportunities, Three Arch Investors has teamed up with a leading development company which has organized, acquired or developed over $4 billion of residential projects throughout North America.
Our initial project, with closed funding in September 2013, was the Somerset Hills Apartments that is being built in a strong area known as Southern Highlands, an upscale neighborhood in the Southwest area of Las Vegas. This 360-unit development is financed by Wells Fargo Bank. Read more about our Multi-Family Apartment Development Program.