Our Tools for Success in Rural Markets

July 8, 2020
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Rural Markets

Investing in major metropolitan markets is a well understood, efficient process. Urban areas with consistently stable and growing populations attract the majority of investment capital. Meanwhile, many opportunities lie in traditionally overlooked and rural markets that can offer investors even stronger returns than their urban counterparts. Investing in these rural markets requires a distinct set of skills that a grand majority of investment firms are unable to provide.

Trust Brings Deal Flow 

Four Points Funding has spent years living and investing in the very communities where we are now deploying our OZ Funds. Strong results and integrity in building value has earned our team a trusted position with community stakeholders, which provides us unmatched access to prospective projects and opportunities. We are working closely with communities to help organize investments which support their long term vision, which in turn earns the best financial outcome for everyone involved.

Bridge Capital Secures Value

Four Points Funding secured $20M of recyclable bridge capital before launching any of our OZ funds. This capital enables us to move quickly on securing properties and ensures we never miss the highest quality projects. By securing projects up front, we offer a pre-committed and transparent portfolio to investors, instead of a typical blind pool fund.

Detailed and Conservative Underwriting

At Four Points Funding, we are highly conservative with our underwriting approach. We utilize a formalized, systematic approach to build out pro-formas and risk assessments. We turn this data into scorecards that are easily understood by investors which helps us attract capital at scale to rural markets. The items measured in each scorecard are market feasibility, financial returns, manageable systemic risk, path to exit, strong sponsor, finance eligibility, community desire, and land/construction basis. Only projects with a Minimum Pursuit Score are pursued.

Finding the “Tailwind”

It would be extremely difficult to pursue investment in rural markets without the kind of deep community knowledge we have spent years developing. As with any broad region, not all areas are poised for the same kind of growth. Part of our investment strategy is to identify areas of high potential and focus on the regional “tailwind.” For example, Glenwood Springs and Carbondale, Colorado are now thriving in the tailwind caused by decades of successful growth in Aspen. These tailwinds exist throughout Colorado. At Four Points Funding, we closely monitor regions to predict where the tailwind will rise as we seek OZ investment opportunities.