© 2017 K Bennett Development Group.
Private Equity Investing
Who is K Bennett Development Group?
In short, we're a real estate investment and development company based in Pittsburgh. We acquire dilapidated properties at deep discounts and transform them into livable, completely renovated homes that are both appealing and affordable to local buyers. We believe that the city's diverse neighborhoods should be restored — not destroyed.
We love this city — and we know we're not alone. The decision to focus our energy on this market was a simple one. Pittsburgh has routinely been named one of the top real estate markets in the country. As recently as April 2017, the Pittsburgh Post-Gazette analyzed national real estate findings released by The Associated Press, suggesting, "While home listings have dropped dramatically across the nation over the past five years, making it harder for prospective buyers to find a house, Pittsburgh has actually seen a slight increase ... people looking to buy a home in Pittsburgh should have an easier time than people in other major metropolitan areas."
Our buying process
Our purchases are conservative. So conservative, in fact, that we routinely achieve instant equity the day we close on a property. A successful real estate investor understands that you've either failed or succeeded the moment you make your initial purchase. If a property's numbers don't fit into our specific guidelines, we'll pass. There are plenty of viable investment opportunities out there — and our job is to find them.
We work exclusively with personal and private equity, which gives us leverage throughout the buying process. Most of the properties we pursue are in need of extensive repair, making it nearly impossible for a buyer to acquire bank financing. Sellers know this — and they're typically willing to discount their asking price in exchange for the speed and ease of purchase that cash buyers can offer.
Our rehab process
Our renovations range from full-gut rehabs to more streamlined, primarily cosmetic projects. We rely heavily on our team of carefully selected designers, construction consultants, and trusted contractors to configure specific plans for every project. In the end, though, all decisions are made with the final buyer in mind.
What are the risks involved?
Overpayment of initial purchase. This is the primary reason unsuccessful real estate investments fail. To eliminate overpayment, we've structured our methods for calculating purchases using strict, tested-and-proven guidelines.
Renovation underestimations. We perform meticulous inspections of all potential investment properties to avoid underestimating. To eliminate this risk altogether, we ensure that a project fits comfortably into our guidelines after a generous overage figure has been factored into the renovation budget.
Shortfall of project funding. Real estate investments often fail because they don't have the proper funding to accommodate for unforeseen problems. This potentially leaves investors exposed to market decline. By factoring overages into our budgets, we avoid this risk completely. This step is imperative — it prevents projects from being severely prolonged, or worse: coming to complete standstills.
Market decline. Impactful market crashes — the most common concern for real estate investors — happen over a substantial period of time. Obviously, not all market swings can be predicted in advance. However, knowledgeable investors are typically able to project market behavior from a short-term standpoint. Efficiently completing projects within a strict timeline allows us to avoid any impact of a significant market downturn.
Fires, floods, personal injury, fraudulent sales, and vadalism. Each of these risks is heavily minimized by ensuring that proper insurance policies are budgeted for and in place.
Why invest with us?
The main advantage to investing with K Bennett Development Group? Our return rate. Compared with most investment options available today, our returns are virtually unmatched, allowing you to earn an annualized percentage rate between six and 12 percent. Obviously, rates and time frames will vary depending on the needs and commitment levels of individual investors.
When purchasing properties, we use a strict, custom formula that allows us to generate a healthy profit — while also offering the high return rates we're known for. We'll never commit to more than 65% of the after-repair value to a property. That is to say, if a property will be worth $100,000 upon completion, no more than $65,000 will be committed to its purchase and rehab. After-repair values are determined by real estate agents, market research, and comparable sales in the respective area from the past three to six months. We always use conservative comparisons on the low end of the market to determine after-repair values.
Investor commitments can range from a single six-month property investment to a multiple-year commitment at a fixed annual percentage rate. However, long-term commitments still share the same security as short-term commitments. Here's why: Returns on long-term investments are paid from the profits of multiple short-term projects. This eliminates the risk of any unforeseen market shifts affecting investments over the years.