Here are some common questions from Investors.
About North Peak
What does North Peak invest in?
North Peak Investments offers a variety of investment options including single-family turnkey real estate, multi-family purchases and asset based investment funds.
North Peak also works with investors to help them develop investment action plans to meet their real estate investment goals.
What is your qualifying criteria for accepting Developers?
Our qualifying criteria for Developers are as follows:
- Must manage all properties themselves. They cannot outsource management of investor properties to a third party. This is the single most effective way to protect investor ROI and keep the investment property maintained.
- Must be referred to us through a reputable source. Many of our developers have been referred to us through one of our Advisory Board members, Jay Hinrichs who has been working with most of them for well over a decade. Jay is on BiggerPockets and I would invite you to speak with him about our group if it would make you more comfortable. We interview new developers on a regular basis.Developers do call us for consideration at which time we will find others who must back them as a referral. As with any industry, its a small world and bad developers can’t hide.
- We don’t work with developers who do low volume. Most of our developers do over 10 projects a month, with several of them doing as many as 50 or 60 per month. High performing developers typically have competencies, efficiencies and wholesale pricing built into their process.A Developer in Indianapolis, for example, personally owns companies for each stage of the rehab process allowing them to buy at wholesale rates, control their quality and maintain strict timelines. This model keeps pricing lower for investors, ensures a quality product and keeps performance predictable.
- Finally, we interview each developer to assess customer service, warranty offerings and other items that we would want to be included as if we were investing ourselves (which we eventually do). At the end of the day, if we won’t invest with them we won’t recommend it to you either.
How many Developers has North Peak vetted?
Currently, North Peak has worked with most our Developers for a minimum of two years with each Developer actively receiving funds from one of our funding solutions. Those that have a proven track record stay in our portfolio, those who do not are removed quickly. This has only happened one time do to our thorough vetting process.
Those that are in the portfolio are Developers whom we trust with our own investment portfolios. We personally qualify Developers ourselves meaning we fly out, met them in person and observe their operation. All of the Developers we work with will eventually be interviewed on our North Peak TV “Featured Developer” series for investors to review. We make individual videos available to investors at the referral stage of the process.
How are deals structured so we all win in the transaction?
North peak acts as a marketing company for all of the Developers. The Developers specialize in finding great homes, rehabbing them, finding tenants and preparing them to sell. Since their knowledge is in the development world, they don’t have much interest in marketing as it’s not what they do best. They hire groups like North Peak to help them find the right buyers for their properties. North Peak is a preferred group by Developers for several reasons:
- Our “commission” is MUCH less than our competitors. Typically, we are at least half the cost of other referral companies. We are paid directly from the developer and the commission is paid out of the developer’s profits, so the investor does not pay a higher price for the investment property. We keep our overhead low and don’t need to charge much for the next reason…
- We invest with our developers. North Peak’s main purpose is to operate as a fund. We use investor funds to buy, rehab and sell properties using the same developers we refer retail and BRRRR investors to. We are protective of our own money, so working with proven developers is a “must” to ensure the safety of our own interests and that of our investors.
- We help to educate investors. Most referral companies like ours are simply referral companies. They field calls and forward info to any developer willing to sign a contract and pay the highest price. North Peak is willing to take the time to speak with, learn from and help investors be successful. We won’t refer anyone to someone we also would not work with. Since our fees are low and at a flat rate, we can offer solutions to investors in an unbiased fashion as we are not incentivized by higher commissions to send you somewhere you shouldn’t belong.
What is North Peak's involvement before, during and after the transaction?
North Peak works with investors at all stages during the transaction. We work with investors to help them learn more about real estate investing by referring them to our Learning Center and spending time with them using our Phone Meeting App. You can get more information on how we do things by visiting our Process Page.
We stay by your side during the referral process as well. Aside from introductions with the Developers, we check in with you to ensure meetings are set and your questions are answered.
After the transaction, we remain with you to ensure your new investment is going as planned and to assist if any issues arise.
Does North Peak have any skin in the game?
North Peak invests with the same Developers we refer to investors. So, it is not uncommon that the very home we’ve funded is the home an investor may purchase. I say “may” because we typically rely on the developers to decide which opportunity is best for the investor.
In the BRRRR situation, North Peak’s money is not involved as you are acting as the “bank” in this scenario. Since we have good working relationships with our developers, they are incentivized to provide you with great service to ensure you and North Peak are both happy with them to ensure continued business in the future. North Peak will continue to do business with preferred Developers indefinitely as long as they take good care of our fund dollars and the investors we refer.
Do you have Developers who specialize in the BRRRR method?
Yes, we have other developers that specialize in the BRRRR method. Those that do specialize are accustomed to performing dozens of BRRRRs a month, serving repeat investors from as far away as Israel and China.
Nearly all of our developers can provider a BRRRR as part of their portfolio however, with very few exceptions.
What is the "ballpark" pricing on these properties (all in)?
Most BRRRR properties fall within a $72,000 – $120,000 price range. This includes all cost from the initial purchase to the complete cost of the rehab.
How long would I have to wait before I can refinance?
This is commonly known as the “seasoning” time. The seasoning time changes from state to state, but typically you can expect most seasoning times to be about 6 months before you can initiate the refinancing process. This seasoning time includes the time you own the house during the rehab process. So you’ll want to make sure you include that in your total time calculation.
How long, on average, does a typical rehab take?
On average, a complete BRRRR rehab takes about 4 months. This means you would be cashflowing the home for roughly two months before your “seasoning” time matures at 6 months and you can refinance the property.
What is the average term for the refinance? 15 or 30 year loan?
A 30 year term is standard for most BRRRR refinances. Although, depending on the cost and goals your are trying to achieve, a 15 year term may make sense.
Does North Peak recommend any banks to refinance with?
North Peak relies on the Developers who specialize in the BRRRR Method to recommend banks to investors. Developers typically use their local banks who understand the BRRRR method, thus making the refinance process less cumbersome for the investor. We recommend this.
What is the minimum I can invest with North Peak?
North Peak currently allows investors to participate in our fund for as little as $20,000.
Do you accept non-accredited investors?
North Peak’s fund is a 506(c) classified fund. As such, we only accept accredited investors at this time.
How long is my money tied up for?
North Peak holds your money only for as long as it takes to recapture your investment dollars. We believe that life happens and investors should have access to your money. Typically, we recapture investment dollars in 90 days or less but depending on where your money is invested will determine your actual timeline.
How do you invest my money?
North Peak is an asset based investment fund, meaning we own and control the assets within the fund.
What fees can I expect to incur?
North Peak is paid purely on performance. There are no upfront fees or other junk fees associated with the handling of your investment dollars. North Peak Fund Managers are paid on the performance of the investments only and are only paid after the investor.
What kind of returns can I expect?
While projecting approximate returns on any investment
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