It varies based on the partner. With our institutional partners who operate cohesively, possess strong track records, and deliver extremely transparent reporting we do not feel the need for active involvement but still maintain close relationships. With our small to midsize operators, we have strong legal agreements in place and watch those investments closely. In some cases, we may take an active role in the general partnership giving us more control.

Risk is managed in many ways. First is our thorough due diligence on both the assets and the operators. Secondly, risk mitigation is embedded in our structure by diversifying across managers, assets, geographies, and strategies. Third, we maintain 3rd party tax and audit, as well as 3rd party fund administration. Lastly, we are active investors in our own funds which aligns our interest with that of our investors. 

Our investment selection criteria follows a top-down and bottom-up approach. We begin by examining macro-economic data and the broader environment to determine which sectors have the greatest opportunity. We then drill down into census data and look at which states and cities are best positioned to capitalize on growth trends for each respective sector. The next step is to identify opportunities in those regions and evaluate the opportunity from the bottom up; the asset, the manager, the deal terms, and then size the position for the portfolio. 

The typical hold period is 5-7 years although some individual assets may be held for up to 10. What that means is the bulk of the portfolio will be unwound and money returned to investors over 5-7 years with the potential for some laggards returned between years 7-10 though that is rare.

Tax benefits are one of the sources of return for real estate, however it will require an added level of reporting to the IRS. Fortune Bridge investors receive a schedule K-1 form which is common for private investments and your tax professional will be able to assist you.

Once assets are acquired and the portfolio is funded, investors can expect quarterly distributions in accordance with the terms detailed in the offering documents for respective funds. Private real estate investment carries no guarantees and distributions are subject to change, but in most cases all net income received is passed through to investors. 

Investors considering exiting their investment prematurely with Fortune Bridge Capital should refer to the fund’s offering documents, which often include provisions for liquidity events like secondary market transactions or asset sales, though availability and timing may differ. We will make our best effort to aid our investors, but it is advised to view these investments as illiquid during the holding period. 

Our interests are aligned in several ways. First, we are investors in our own funds. Second, our waterfall structure ensures that our investors get paid first with no catch-up clauses. And lastly, investors must receive their full return of capital plus a preferred rate of return before the fund can participate in the profits.

Technology plays a pivotal role in Fortune Bridge Capital’s real estate investment strategies, enabling data-driven decision-making for market trends, and enhanced investor reporting and transparency.

Fortune Bridge Capital maintains a proactive approach to regulatory compliance by staying abreast of evolving regulations, engaging legal and compliance experts, conducting thorough legal due diligence, and implementing robust compliance frameworks to ensure adherence to applicable laws and regulations.