Investment Strategy
Angels For Builders invests in residential real estate around the Greater Boston area. We match investors with investment opportunities, and provide mezzanine debt and preferred equity financing for residential real estate development and redevelopment projects, generally at between 65% and 90% of total cost in the capital stack. AFB finances development partners who have achieved long records of success in the Boston metro market. We fund residential projects of 1-50 units in size located in infill supermarkets inside of the Route 128 loop. We are locating a regular flow of high-yield residential development investment opportunities in the geographic areas in and around the city that are proven areas for creating residential housing of appreciating value, including cities and towns such as Boston, Cambridge, Somerville, Medford, Belmont, Arlington, Brookline, Newton, Bedford, and Lexington. We then match investors with investment opopr
The Market for DevelopmentThe Boston-area residential real estate market is experiencing low inventory levels and record high prices, according to MLS data and a recent article in The Boston Globe. With Boston’s diversified, knowledge-based economy and strong demographic trends expected to continue to drive demand for residential real estate in and around the city, AFB believes the medium-term and long-term outlook for Boston’s residential real estate market is strong. In addition to the higher end of the market in established towns and communities, the outlook for more moderately priced properties is also strong. Boston’s mayor Martin Walsh recently announced plans to rapidly expand development opportunities for funders and developers, so that middle-class professionals and families can afford to live in the city. Currently, at the median city salary of $80,000, only 1.7% of the available housing stock is affordable to a population fundamental to the city’s success. This is an example of the kind of favorable
economic conditions that exist for real estate development in the metro Boston
area.
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Our ApproachAFB investors include angel investors, family offices, and professional funds. We provide a unique opportunity to participate in high-return residential real estate investing around metro Boston without having to commit to the time and risk-intensive process of finding, mining, and developing renovation and new build sales opportunities.
AFB matches investors with real estate investment opportunities and, therefore, brings efficiency to an imperfect, inefficient market. AFB's combination of its web-based fund raising and investment management tools, strong local real estate market knowledge, and efficient underwriting and structuring expertise is unique, and allows us to deliver superior, risk-adjusted returns to our investors. |
Inefficient Market for CapitalThe market for capital in this market is inefficient as development deals of the scale that we are specializing in are harder to locate and source. We believe that a uniform structure for funding these development deals with a unique network of successful builders will sustain our competitive advantage. Our extensive network in the local developer community built over many years brings with it a breadth of developer talent and opportunity.
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Our InvestmentsAFB invests between $350,000 and $1,250,000 per project with 12-18 month target hold periods. We take either a mezzanine position or a preferred equity position, subordinate to the bank construction lender.
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