Virtu Investments: Will Flemming's Visionary Ventures

Will Flemming Virtu Investments is a leading multifamily real estate investment firm, primarily operating in the western United States. With a focus on tax-efficient solutions, the company has acquired and managed over 130 properties since its founding in 1997, totalling more than $3.7 billion in real estate value. Will Flemming Virtu Investments has a highly selective acquisitions practice, with a vertically integrated structure that includes in-house property management, finance, due diligence and asset management services. The company's flagship fund, the Virtú Evergreen Fund, LP, is designed for long-term, generational ownership, offering tax efficiency and flexible liquidity.

Multifamily real estate investment

Will Flemming's Virtú Investments is a private equity firm specialising in multifamily real estate investments. Multifamily real estate is a type of residential property that contains more than one housing unit, such as duplexes, townhomes, apartment complexes, and condominiums.

Cash Flow and Cap Rate:

Calculating cash flow and capitalization rate (cap rate) is crucial for multifamily real estate investments. Cash flow is estimated by subtracting the monthly mortgage from the property's net operating income (NOI), which is the difference between expected income (rent, storage and parking fees) and expenses (repairs, maintenance, etc.). The cap rate indicates the expected return on investment and is calculated by dividing the annual NOI by the property's current market value. A higher cap rate generally denotes higher risk and higher returns.

Location and Number of Units:

Location is critical for multifamily properties as they need to appeal to a larger number of renters. Investors should target high-growth, high-yield areas with well-maintained neighbourhoods. The total number of units in the property is also important, with duplexes, triplexes, and four-plexes offering the most upside with the least risk for beginners.

Income and Expenses:

Determining the potential income a property can generate is essential. Sites like Rentometer.com or Craigslist can help verify rental prices. The 50% rule is a conservative guideline, suggesting that 50% of an investment's income should be spent on expenses rather than the mortgage.

Financing:

Multifamily properties with five or more units typically require a commercial property loan. Lenders will consider factors such as credit score, debt-to-income ratio, and cash reserves. Owner-occupied properties, where the investor lives in one of the units, may qualify for more favourable financing options and lower interest rates.

Portfolio Growth:

Multifamily real estate allows investors to acquire multiple rental units in one purchase, making it faster and more efficient to grow a portfolio compared to buying multiple single-family homes.

Property Management:

Multifamily properties can benefit from hiring a property management company to handle day-to-day operations, including tenant screening, rent collection, maintenance, and compliance issues. This option may be more financially viable for investors with larger portfolios.

Overall, multifamily real estate investments offer a great opportunity to generate multiple streams of income, build a diverse portfolio, and take advantage of economies of scale.

Tax-efficient solutions

Virtú Investments is a multifamily real estate investment firm that provides tax-efficient solutions for its clients. The company was founded in 1997 and has since acquired and managed over 130 properties, totalling more than $3.7 billion in real estate value.

Virtú Investments offers a range of tax-efficient solutions to its clients, including:

• Tax-efficient real estate investment opportunities: Virtú Investments specialises in providing tax-efficient real estate investment opportunities for its clients. The company researches over 400 property investments per year and selects only 6 to 8 that meet its unique criteria. This selective approach allows Virtú to offer its clients carefully curated investment opportunities that maximise tax efficiency.
• IRS Section 721 tax deferral: Through the Virtú Evergreen Fund, asset owners can defer capital gains taxes by utilising IRS Section 721. This allows investors to contribute multifamily properties valued between $10 million and $150 million to the fund, instantly diversifying their holdings into a professionally managed, institutional-quality portfolio.
• Long-term tax-efficient capital preservation: The Virtú Evergreen Fund is designed for generational ownership, offering compounded growth and hyper tax-efficient capital preservation. Pre-tax gains are continually reinvested through 1031 exchanges within the fund, and depreciation-protected cash flow is distributed quarterly.
• Integrated tax preparation services: Virtú Investments provides in-house tax preparation services, ensuring that tax compliance and reporting are seamlessly integrated into their investment management process. This allows for a more efficient and coordinated approach to tax-efficient investing.
• Tax-efficient contribution program: Virtú's contribution program offers a unique structure for asset owners to join the Virtú Evergreen Fund. By contributing their multifamily properties, investors can benefit from tax efficiency, diversification, and long-term benefits such as generational ownership and flexible liquidity.

By leveraging these tax-efficient solutions, Virtú Investments aims to maximise returns for its clients while minimising tax obligations, ultimately preserving and growing generational wealth.

Long-term capital appreciation

Virtú Investments is a multifamily real estate investment firm that acquires and manages apartment properties in the western United States. The company has a strong focus on long-term capital appreciation, aiming to create value and generate wealth for its clients over the long term.

Since its founding in 1997, Virtú has acquired and operated 130+ properties, totalling over $3.7 billion in real estate value. This includes the acquisition of over 70 assets, valued at $850 million, comprising 12,000 apartment units. Virtú's long-term approach is evident in its highly selective acquisitions practice, as it researches over 400 property investments per year to find six to eight that meet its unique criteria.

The company's flagship investment vehicle, the Virtú Evergreen Fund, LP, exemplifies its commitment to long-term capital appreciation. Launched in 2015, the Evergreen Fund is designed for generational ownership, compounding returns, extreme tax efficiency, and flexible liquidity. By reinvesting pre-tax gains through 1031 exchanges and distributing depreciation-protected cash flow quarterly, the fund aims to maximise long-term capital appreciation while minimising tax obligations.

Virtú's investment philosophy is centred on creating alpha with tax-efficiency. The company employs highly tax-efficient strategies to benefit its taxable clients and preserve generational wealth. This approach is particularly advantageous for investors in the multifamily real estate market, where tax implications can significantly impact overall returns.

By combining long-term capital appreciation with tax-efficient strategies, Virtú Investments offers its clients the potential for sustained wealth creation and the ability to preserve and compound their investments over generations. This approach positions Virtú as a leading multifamily real estate investment firm, committed to maximising returns and minimising tax obligations for its clients.

Real estate investment management

Key Responsibilities

A real estate investment manager's primary role is to increase the value of the properties in their portfolio, both through the selection and subsequent management of those properties. This includes:

• Finding properties with the highest and most consistent revenue sources, such as rental properties.
• Reducing costs associated with owning and maintaining properties, such as operational costs, maintenance, closing costs and taxes.
• Identifying and mitigating risks associated with property investments.
• Strategically expanding and diversifying their property portfolio.
• Managing cash flow, including finding ways to cut costs and increase rental profits.
• Assisting with property transactions, including purchases and sales.
• Negotiating property agreements and leases that balance tenant appeal with profitability.
• Marketing properties for sale or rent, including creating listings and working with realtors.
• Conducting market research to identify trends and inform investment decisions.
• Making financial projections and developing budgets and financial strategies.

Differences from Traditional Money Management

Specialisations

Real estate investment managers often specialise in specific regions or property types, such as retail, office, industrial or multi-family residential properties. This specialisation allows them to quickly identify and assess investment opportunities within their area of expertise.

Challenges and Opportunities

Property acquisition and management

Virtú Investments is a multifamily real estate investment firm that acquires and manages apartment properties in the western United States. Since its founding in 1997, Virtú has acquired and operated 130+ properties, totalling over $3.7 billion in real estate value.

Virtú maintains a highly selective acquisitions practice, researching over 400 property investments per year to find six to eight that meet their unique criteria. Their acquisitions team forms part of a fully integrated, in-house property management firm, which also includes finance, due diligence, asset management, information technology, and accounting/tax preparation.

Virtú's vertically integrated private equity capabilities span all key disciplines of multifamily value creation. Their focus is on providing investors with innovative, tax-efficient solutions within the multifamily investment space.

Some of Virtú's notable acquisitions include:

• Kearney Plaza in Portland, Oregon
• A 50-unit multifamily property in Oakland, CA
• Sierra Vista in South Lake Tahoe
• Liberty Square Townhomes in Las Vegas

Frequently asked questions