Investing Expertise
Our Investing Strategy
We at QC Capital utilize our expertise in risk/return analysis to identify the best car wash and multifamily investments the market has to offer. Our strategy prioritizes stability which provides the flexibility needed to capitalize on favorable economic and demographic trends with minimal down-side.
Elevate your investment
Access to Distinctive Investment Opportunities
Elevate your investment portfolio with exclusive opportunities alongside us. We take pride in granting clients access to distinctive investment avenues that extend beyond the confines of traditional markets. Our private equity offerings enable you to invest judiciously with high growth potential, often unavailable through public markets. Diversify your investment approach with entry into the innovative and lucrative realms of the car wash and multifamily sectors.
Asset Identification
Our approach begins by identifying assets that possess upside potential located in strategic markets with strong growth fundamentals.
Identify Markets
We start by identifying submarkets that possess strong growth potential. This analysis primarily involves determining projected job growth and population growth as well as identifying supply/demand dynamics, and barriers to entry.
Micro Market Analysis
Once a submarket is selected, we shift our attention to identifying residential pockets with strong demand drivers such as low crime rates, good schools, and access to necessities like hospitals or retail and office centers.
Setting The Criteria
Once a micro market is selected, we employ a comprehensive analysis of external, macro, and micro factors to establish our investment criteria. This involves scrutinizing various metrics from capital markets such as treasury spreads and debt terms, as well as metrics from the real estate markets like evictions, renter affordability, and cap rate trends. Additionally, we incorporate relevant factors specific to the car wash industry, including consumer trends, location viability, operational costs, and market demand dynamics.
Underwriting Process
Our approach begins by identifying assets that possess upside potential located in strategic markets with strong growth fundamentals.
Financial Analysis
One of the most integral elements of locating strong investment opportunities is the ability to analyze, digest and forecast the financial performance of an asset. At QC Capital, we meticulously analyze the financial statements to first understand why a specific asset is performing or under performing, whether there are operational inefficiencies QC Capital can streamline, and if there is additional value QC Capital can add to an asset.
Market Analysis
At QC Capital, we understand that arguably the most important aspect of the deal selection and underwriting processes is conducting a thorough Market Analysis. During this phase, QC Capital conducts extensive market research to understand the demographic composition of a market/submarket, major employers in the area, population growth projections, new developments entering the market, comparable analysis, nearby retail, median household incomes, and more.
Comparable Analysis
Comparables, or "comps" are nearby properties usually within a 3, 5 or 10-mile radius that are similar across a number of categories (ex: vintage, size, accessibility, pricing, etc.) to the Subject Property. By evaluating the comps in a market, QC Capital is able to determine where the Subject Property currently ranks within the comp data set and what adjustments can be made to boost the performance of an asset.
Business Strategy
Once the Financial, Market and Comparable analyses have been completed for a potential acquisition, QC Capital develops their business strategy to improve operations and elevate the overall performance of the asset. It is during this phase of the underwriting process when QC Capital establishes a Cap Ex budget, identifies solutions to streamline operational inefficiencies, and creates the infrastructure to implement our strategy post-closing.
Our Reach
Where We Purchase Properties And How We Select Markets In The USA
Market Growth
The 5 year growth forecast is one of our key indicators. We use a powerful proprietary method to calculate this value.
Employment
We look for metros and submarkets that are adding a significant number of high-paying jobs, resulting in a stable local economy.
Sales Trends
We continuously monitor local sales to compute cap rates and determine whether our cap rates are on target to reach our projections.
Supply & Demand
We monitor supply of local units carefully to ensure it will not spike the vacancy rates and negatively impact rents.
Risk Analysis
Once the underwriting process is complete and a strategy is created, we meticulously review our business plan to identify each of the risks associated with the project
Debt Service
Our team diligently analyzes key metrics associated with our debt service assumptions to ensure we are obtaining positive leverage with minimal default risk.
Stress Tests
Finally, our investment committee will run our projections through stress tests which adjust key variables such as vacancy, rent growth, and stabilization time down to extreme levels which allows our team to accurately visualize all downside scenarios. We then review cash flow metrics to ensure the success of our investment isn't tied to one variable. This step is critical and accounts for a majority of the time spent underwriting potential assts. As mentioned before, this analysis allows our team to visualize returns in best case scenarios, worst case scenarios, and everywhere in between.
Diversify Your Portfolio
Our Primary Asset Classes
INVEST IN
Multifamily
Learn more about our extensive knowledge and expertise in the multifamily investing space. Click to view our portfolio.
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Car Washes
Car Washes are a great investment to help build steady and predictable passive income. Click to learn more about investing.
Return Analysis
Finally, our investment committee uses a list of key metrics to determine the investment's overall return potential. We use this return analysis together with the risk profile created in the previous step to determine the true quality of each investment.
IRR (Internal Rate Of Return)
The Internal Rate of Return (IRR) is a metric used to determine the time adjusted return for the life of the investment. By discounting cash flows received in the future, the IRR metric allows investors to see the quality of their future cash flows compared to alternative investments.
EQM (Equity Multiple)
The Equity Multiple or Equity Multiplier represents the relation between the total cash distributions received from an investment divided by the total equity invested. The Equity Multiple metric gives investors insight on how much they could make on their initial investment. An investment opportunity with an Equity Multiple below 1.0x indicates that an investor should expect to receive less cash from distributions than what they initial invested. Conversely, an investment opportunity with an Equity Multiple above 1.0x indicates that an investor should expect to receive more cash from distributions than what was initially invested.
Cash On Cash
The Cash on Cash metric represents the percentage of a cash flow compared against the capital invested. This metric excludes any significant capital events such as a sale or refinance. A high Cash On Cash percentage represents strong cash flows produced from the property which helps mitigate default risk.
Risk Adjusted Return
Finally, QC Capital uses formulas created internally to determine the overall quality of each asset adjusted for risk, and term length. This metric is essential, and is able to provide investors with a much more accurate representation of the investment quality.
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Learn More About Investing
As the commercial real estate market is consistently growing and changing, we like to provide information and content to keep our investors and the public informed.