Investor Focus on Major Cities Creates Opportunity in Smaller Markets

June 24, 2020
Rural Opportunity

The smaller markets that harbor unlocked value in the United States, and especially in Colorado, are being overlooked due to inefficiencies of current investment approaches. Capital traditionally follows obvious demand, and in this case, demand is driven by a community’s ability to grow and retain a resident population. This creates a pattern in which more obvious metropolitan populations repeatedly attract large scale capital investments, while smaller markets fail to appear on investor’s radars even if they demonstrate stronger population growth and healthier risk adjusted returns. By having an intimate understanding of Colorado’s emerging communities and creating efficiencies in capital deployment, Four Points Funding provides the translation between today’s capital markets and the opportunities in, and needs of, these communities.

Small Markets Poised for Period of Extended Prosperity

The greatest long-term investment opportunity in our state exists in places such as Grand Junction, Glenwood Springs, Durango and similar communities. Historically, market inefficiencies outside of the few main cities in Colorado have limited capital investment, while demand in these communities continues to increase. Small markets that receive adequate investment into amenities and housing are especially well situated to attract and retain residents. The pandemic is accelerating an existing net migration trend to rural markets in Colorado, supporting the potential for these areas to enjoy an extended period of prosperity. At Four Points Funding, we see this transition as an opportunity to support healthy growth while capturing strong economic gains.

Addressing the Challenges of Investing in Small Markets

Placing capital investments in rural areas is not without its own unique set of challenges. Rural investments, though typically smaller than their urban counterparts, require the same amount of diligence and require even more intimate community knowledge and understanding. This becomes prohibitive for larger firms despite the potential for larger returns. Four Points Funding is uniquely positioned to overcome these addressable challenges. Our “boots on the ground” philosophy allows us to gain an understanding of the key players and communities in which we work and have been investing in for years. Our funds bring together multiple investment opportunities, offering investors an already diversified portfolio, while bringing capital at scale to communities in need. This boots on the ground approach to portfolio creation with systematic diligence is a critical component for redirecting capital to these smaller, high opportunity markets.

Our Theory of Change: Capital Efficiency

Our intent to change the flow of capital to, and thus the economic vitality of, rural communities is based upon a new investment model that provides efficient investor access to small markets. We believe that while individual investments can achieve this, the most powerful and lasting change will come through a systematic approach to investing across communities. Using our unique knowledge of our region, our relationships with key stakeholders in each of these markets, and our history of successful investing, we are creating efficiency in typically inefficient, high value markets.

Interactive Opportunity Zone Map