While the team at Ark7 works very hard to add new properties to the curated pool, we never lower our standard of selection criteria in driving optimal returns. Investors use Ark7 to earn passive monthly income, diversify the investment portfolio, and enjoy long-term appreciation at the time to trade or to sell. These are also the founding principles of how we select properties.
Every Investment Decision is Important
Some fun facts that you might not know.
- Our acquisition team screens over 1000 potential properties every month to find the best deals possible for investors. We specifically target Single-Family and Multi-Family rental properties in the high growth but not overly heated cities for best returns.
- Before putting each property on the market for initial offering, Ark7 purchases it with either cash strategy or financing strategy (with leverage) depending on the condition of the market, and then passes on the strategy to investors. We typically hold 1% to 10% shares of each property, and are held accountable proportionally for the operational profit and loss as a shareholder just like any other investors.
- We manage each property ourselves or through our long-term strategic partners to make sure it’s well maintained and reaches maximum occupancy and rent price potential. The tenants communicate with managers through the Ark7 Renter App. The leasing, property management, accounting and tax filing processes are automated or semi-automated through our internal tools to ensure accuracy and further improved efficiency.
Such business practice makes sure Ark7 shares mutual interests with our investors, and allows us to serve the community with confidence and full transparency. We know each investment decision our investors made is important, so do we.
Sourcing Property is Art and Science
Ark7 modernizes the entire process of property acquisition by leveraging big data and local expertise. Our models help evaluate over 100 indicators ranging from the socio-economic factors, real estate market conditions, and property-specific micro factors to identify targets that can drive stable to increasing growth overtime.
Investors rate a location’s potential based on the “Law of Supply and Demand”. Three factors typically drive the demand high in a relatively long term period: massive socio-economic development, population inflow, and friendly domestic policies. When there’s high growth in housing demand but not sufficient housing supply, price will likely rise until the balance is met again. And it stays true for both the rental price and the house price.
Take 2 recent Ark7 cases for example, we listed 3 properties in the heart of Philadelphia, where its future life Science Innovation Hub – University City – is evolving, and 3 more near Phoenix-Mesa-Casa Grande area, all within 20 minutes from the future Silicon Valley, or Silicon Desert to be precise. Both areas are under master city development plans attracting mega employers and creative start-ups to call it home. What’s coming with it is the thrive of the highly skilled workforce and increased income, bringing in young families, renters and owners.
The impact can be gradually reflected in its housing market. The year-over-year (YoY) Median Home Value in Casa Grande has been up by 34.1% since the big announcement on new construction plans of the major semiconductor manufacturer TSMC and its suppliers. 5-year Compound Annual Growth Rate (CAGR) reaches 13.39% and is expected to continue. We do look at this metric at both time frames or even longer to past 10 years to take into account short-term impact and long-term market trend.
Featuring Single-Families near Phoenix – the next Silicon Valley
The good news is that Ark7 did all the due diligence to score and find the right investment rental homes, so our investors don’t have to exercise the time consuming part. While we constantly share market insights with investors, our experts at acquisition team pre-vetted each property and disclosed its key financial data and operation details on Ark7 website and mobile App to help investors make confident decisions.
Other factors evaluated at acquisition are related to real estate market conditions and communities around the property. A nice home in a community with great accessibility, pleasing appearance, and amenities like high rating public schools, parks and other living essentials are more likely to present a bigger appreciation potential. Looking at how long listed home comparables stay on the market, and how much they are sold for compared to listed price, are also helpful in projecting the popularity of a potential property to acquire. We further look into rental rate, rent-to-sale ratio, local policy on renting or zoning, natural factors that can impact insurance and maintenance cost, property tax and rent sales tax, etc, to reflect a property’s ability to make positive and stable monthly income compared to its market value, measured by the CAP rate.
Every home is unique
When we zoom in to a specific property, the evaluation score can be very different even for neighbors in the same street. We may favor a 10 bedroom Duplex near university campus for student housing like our Philadelphia-D2, or a one story (open floor plan) kids friendly Single Family House accessible to tech company employees in Chandler or Arizona City.
In addition, the built year, the appearance of the building (exterior, structure and floor plan), conditions of the infrastructure considering local topography, all matter before placing an order. Ark7 works with professional inspectors to examine each property closely and put it out for the right type of tenants based on our rental strategy.
Our Curated Property List
What you find in the marketplace are our curated high yield rental homes after thousands of hours of hard work invested by the Ark7 teams. We take what we’ve learned about each property and translate it into easily digestible information for investors. We do this because Ark7 believes the “heaviness” of real estate investment decision making and operation can be modernized by technology and data insights, and the history of real estate investing in a black box is gone.
We also make real estate investing more accessible by dividing ownership into shares that our investors can buy and trade, each share priced from a few bucks to a few hundreds. Note the trade secondary market is in its final stage of development and legal review, and will be available for investors very soon.
Ark7 grows with the investor community, and our acquisition strategy may adjust as well. We have been putting even higher priority to stable rental income in the midst of market fluctuation this year so far. Currently we are evaluating Single Family Homes with annualized returns targeting 3%+ in Atlanta, Dallas and continue to watch the Raleigh/Tampa markets and the Austin/Taylor TX markets. We continue to seek high return Multi Family Homes with annualized returns targeting 6%+.
Visit the Marketplace to see the full selection of our current list and keep an eye out for future releases.
Read our Philadelphia Market Deep Dive to find out why it is a great city to invest.