critical-question-you-must-ask-about-investing-fund
AtlantaInsight Industry Trends

The Critical Question You Must Ask Before Investing in a Fund

When real estate investors place money with an equity fund or other investment provider, they do so with the expectation that their capital will be used to fuel productive, profitable investments. However, warned GreenZone Properties CEO Pete Asmus during a recent educational breakout session at a Think Realty National Conference & Expo in Atlanta, Georgia, many investors find themselves disappointed in their investment’s performance because they fail in one aspect of their due diligence, determining if an investment manager has the ability to reach the parties necessary to exit the transaction and make a profit. “Without the reach to exit an investment, you don’t get to put anything in your pocket,” he observed. “Before I can sell something, I have to find someone who wants to buy it.”

Asmus, whose company operates in the extremely new, extremely hot cannabis sector by identifying, developing, and leasing via triple net transactions commercial properties that meet the unique needs of a sector flush with cash, is known for his enthusiasm about his company and the burgeoning real estate sector accompanying the legalization of marijuana for both recreational and medicinal purposes in many states. GreenZone does not invest in marijuana production or distribution, but instead focuses on leasing land and buildings to companies who do. “From cultivation to retail, from delivery services to testing labs, the impact of this single product will be so big we cannot truly even quantify it yet,” Asmus said.

Key Question: Who is in the Audience?

Asmus noted, the real key to success in his unique commercial real estate niche lies in the ability to “redistribute the product,” meaning the investment property itself. That ability hinges on reach, Asmus said. “You need people who want to invest in these properties and own or lease them. We reach more than 4 million cash-flow investors who can come in to purchase, lease, or owner-finance. People without that reach can have a similar strategy to ours, but they cannot necessarily execute,” he said.

Case Study: The “Perfect” Investing Situation

Asmus went into detail about one of GreenZone’s current projects, a 10-building “triangle” of properties that offers more than 152,000 square feet of space ideally suited to companies in the cannabis industry. He emphasized, the space is not limited in its potential and could be used for a wide variety of purposes. Furthermore, the investment properties are set up to allow tenants to lease the properties, develop them much as if they owned the properties, and save investors’ money on property insurance as well, which is a big concern for many involved in the marijuana industry because the property insurance requirements are many and varied.

“It can be difficult to get insurance if you are growing cannabis, for example,” said Asmus. “We structure our deals so that the owner of the company leasing the building, who is probably an expert on that type of insurance anyway, deals with getting the insurance on the property. They come in, make repairs, and insure the property just as if they were the owner, but then they pay GreenZone like a bank. If there are issues, we don’t foreclose, though. All we have to do is evict.”


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Carole Van Sickle Ellis is the editor-in-chief for Think Realty Magazine. You can reach her at cellis@thinkrealty.com.