At RealVantage, our deals are categorised into three segments; Core, Value-Add and Opportunistic, in accordance to the risk and return profile of the project. Core deals are catered to conservative investors looking to generate stable income with very low risk. Core assets typically require very little asset management and are typically occupied by tenants with strong credit and on long-term leases.
Value-Add deals are associated with moderate risk. Examples of such deals include acquiring under-performing assets, value-adding to them before divesting. These buildings often have occupancy issues, management problems, deferred maintenance or a combination of all three. These investments require substantial asset management to extract the value.
Opportunistic deals are the riskiest of all real estate investment strategies. Opportunistic deal investors take on relatively complicated projects and the returns tend to be back-end loaded. Some examples of opportunistic investment include ground-up developments, acquiring an empty building, land development and repositioning a building from one use to another. Opportunistic properties often have little to no cash flow at acquisition but have the potential to produce a tremendous amount of cash flow when the value-added activities have been completed.