​The Southern Methodist University (SMU) Cox Real Estate Impact Investment Fund was launched by the school's Folsom Institute for Real Estate in early 2023. It provides students with an immersive way of learning about and creating lasting connections within the expanding Dallas real estate market. It also encourages innovative investment opportunities that have a positive, measurable impact on underserved communities.

The fund was initially underwritten by several major donors, the most prominent being Mimi B. and William "Bill" H. Vanderstraaten '82, who contributed more than $1 million as a lead gift. The Phillips Foundation subsequently contributed capital to the fund and to the SMU Impact Lab, which focuses on broader investments that generate financial and social returns for the "greater good." The fund presently maintains in excess of $4 million under student management. 

The Real Estate Impact Investment Fund's mission starts with providing real estate students with scholarship support. This enables them to participate in a one-year joint BBA/MBA course that provides hands-on, experiential learning with an emphasis on investment management and private equity investing strategies. Students oversee a discretionary, open-ended investment vehicle that focuses on preferred equity and LP direct real estate holdings. These combine demonstrable social impact with profit-driven mandates at an appropriate level of risk.

Participants in the student-led fund are limited to 20 each year, with 10 BBA and 10 MBA students pairing up to form teams that work with SMU associates and analysts. SMU Cox - Folsom Institute for Real Estate director Joseph Cahoon teaches the curriculum in tandem with investment committee member Maria Stamolism, who also co-heads global investment firm Canyon Partners' real estate division. 

As Cahoon describes it, participating students are set up as "owners" in the sense that they do not passively receive information but use tools from class in undertaking investigations into social impacts and revenue prospects of existing projects. They engage directly with property investors and owners, creating case studies spanning existing developments such as strip malls and apartment complexes. This "ownership mentality" translates to pursuing real-world transactions that are likely to generate positive long-term results in overlooked and underserved neighborhoods. The social impact of investments undertaken is measured by SMU George W. Bush Institute researchers. 

The ultimate aim of the practicum, described as a work in development, is reaching a $10 million capital-raising goal while staying true to the mandate of generating maximum social benefit alongside financial returns. As investments deliver capital infusions, the plan is for the fund to maintain an evergreen structure minimally reliant on outside contributions. 

In July 2024, the fund successfully closed its second-ever transaction. Partnering with Price Realty Corporation, the fund acquired the 116-unit Fort Worth Monticello Apartments community for $250,000. Built in the 1970s, the complex is a stabilized property that delivers quality attainable housing to members of the Crestwood and Monticello neighborhoods. Housing here is increasingly expensive and unaffordable to local workforce participants. 

Under the arrangement, Price Realty is responsible for leasing and managing in-house property. Profits generated from this and other holdings are divided equally between the scholarship program for SMU's real estate-focused students and pursuing new and ongoing investments.

In the competitive world of real estate investment, securing adequate funding can be a dealbreaker for the success of your projects. Whether you're a seasoned developer or a newcomer to the field, understanding the intricacies of real estate financing can make the difference between a project that flourishes and one that underperforms.

Real estate financing typically involves two primary avenues: debt and equity financing. Debt financing entails borrowing capital from financial institutions or private lenders, which must be repaid with interest over time. On the other hand, equity financing involves raising funds by selling ownership stakes in the project to individual investors.

Each approach has its merits and risks. Debt financing allows developers to maintain full ownership but comes with the obligation of regular payments. Equity financing can provide more flexible capital without immediate repayment pressures, but it dilutes ownership and potential profits.

The structure of a real estate investment can vary widely depending on the project's needs and investor preferences. Individual ownership is where a single investor or entity holds full control and responsibility. Joint ventures pool resources from multiple investors. Choosing the right structure depends on factors such as the project's scale, risk profile, and the developer's experience and resources.

In today's digital age, technology can streamline the fundraising process. Implementing a robust customer relationship management (CRM) system can significantly enhance investor outreach and relationship management. These tools allow developers to track interactions, tailor communications, and manage the fundraising pipeline more effectively.

Your pitch is the critical step to attract investors. It should clarify the project's value proposition, market opportunity, and potential returns. Avoid coming across as overly optimistic, because potential investors are always wary about investment risks. Be prepared to discuss the risks associated with your project. Investors appreciate an open discussion of potential risks and mitigation strategies instead of a pitch that comes across as a foolproof plan.

Showcasing early momentum can significantly boost your fundraising efforts. Inform potential investors of other interested parties early in the process. This strategy generates confidence and creates momentum toward your fundraising goal.

Diversifying capital sources can also strengthen a project's financial foundation. This might involve combining different types of debt (e.g., senior loans, mezzanine financing) with various equity sources (e.g., private investors, institutional funds). Each capital source will have different return expectations and risk tolerances, so balancing these interests requires careful planning.

Crowdfunding has gained popularity as a new method to raise funds for real estate investments. This approach leverages online platforms to pool smaller investments from a large number of individuals. While it can democratize access to real estate investments, it also comes with challenges related to regulatory complexities and the need for enhanced transparency and communication. Developers considering crowdfunding should carefully evaluate platform options, understand the regulatory landscape, and be prepared for the increased reporting and investor relations responsibilities that come with having numerous small investors.

Factors like market fluctuations, regulatory changes, and economic uncertainties can impact investment security. Successful developers stay informed about market trends, maintain flexibility in their strategies, and prioritize open communication with investors.

Building and maintaining strong investor relationships is perhaps the most crucial aspect of long-term success in funding real estate projects. This involves not just securing initial investments, but delivering on promises, providing regular updates, and consistently demonstrating value and integrity.

Effective real estate fundraising requires a multifaceted approach that combines financial acumen, strategic planning, and relationship-building skills. By understanding the various funding options, leveraging technology, crafting compelling pitches, and staying adaptable to market conditions, developers can succeed in the field of real estate investment.

​Real estate debt funds are investment vehicles that pool money from multiple investors. Then, the funds can finance real estate projects.

The funds offer an alternative to traditional property ownership. Investors earn returns from interest payments on the loans and any additional income generated through fees or profit-sharing agreements. Understanding a real estate debt fund's workings, key metrics, and due diligence process is important to ensure a sound investment.

One issue to consider in evaluating real estate debt funds is loan portfolio diversification. It spreads risk across various properties, locations, and borrowers. A well-diversified portfolio eases the impact of any single loan default, ensuring more stable returns. Diversification across diverse types of real estate and geographic areas helps mitigate market-specific risks, making the fund more resilient to economic fluctuations and enhancing overall investment security.

Interest rates and yield spreads also play a crucial role in evaluating real estate debt funds. The interest rate determines the income generated from the loan. In contrast, the yield spread, the difference between the fund's lending rate and the cost of capital, indicates the potential profit margin. A higher yield spread suggests a more lucrative investment, assuming the associated risks are manageable.

The fund's track record and management team are essential factors to consider. A strong performance history demonstrates the fund's ability to generate steady returns and manage risks effectively. The experience and expertise of the management team are equally important, as skilled managers can navigate market fluctuations and identify profitable opportunities. Therefore, it helps to investigate the team's background, including their past performance, industry experience, and potential conflicts of interest.

Conducting thorough due diligence is vital to evaluating real estate debt funds properly. One can start by reviewing the fund's offering documents, which provide detailed information about its strategy, structure, and terms. These documents should outline the fund's investment objectives, target returns, fee structure, and potential risks. It is best to pay close attention to the fund's risk management strategies, as effective risk mitigation is crucial for protecting your investment.

It is also important to analyze the underlying properties securing the loans by evaluating their location, condition, market demand, and potential for appreciation. Properties in prime locations with high demand and growth prospects are generally safer investments. Also, assess the borrower's business plan and financial stability, as their ability to execute the plan and repay the loan is critical to the fund's success.

Financial statements and performance reports offer insights into the fund's financial health and operational efficiency. Reviewing these documents helps assess the fund's income, expenses, and profitability. Things to look for include consistency in returns and low volatility, which indicate a stable investment. Compare the fund's performance to industry benchmarks to measure its competitiveness.

In addition, investors must consider risk factors and potential red flags, such as economic and market conditions that could impact the fund's performance, such as interest rate changes, regulatory shifts, or economic downturns. Be wary of overly optimistic projections or high leverage levels, as these can increase the fund's vulnerability to market fluctuations.

Finally, one can seek independent third-party assessments and reviews. Ratings from reputable agencies, industry analysts, and investor testimonials can provide valuable perspectives on the fund's credibility and performance. Engaging with financial advisors or consultants specializing in real estate investments can also offer personalized insights and recommendations based on investment goals and risk tolerance.

​The Information Management Network (IMN) was established more than three decades ago to innovate real estate conferences. An executive team with over 15 years of industry experience works to achieve high-quality experiences for the real estate community. The organization hosts conferences for various real estate specialties, from single-family rentals (SFR) to distressed properties.

SFR is the nation’s second-largest rental housing type, with an estimated 14 million households. However, the number of SFR properties in America has decreased in five of the past six years. A decrease in households, however, has not deterred investor activity. A trend of single-family renters living in attached single-family homes has also influenced the market.

The number of American renters has increased in the past five years. Attached single-family homes now account for roughly one in five SFR households. The nation’s SFR market has demonstrated positive growth throughout 2024. March 2024 had a 3.4-percent year-over-year SFR increase, according to the Single-Family Rent Index from CoreLogic, a property data and services provider.

SFR properties should not be confused with multifamily or residential properties with two or more housing units. A duplex, for example, is a standard residential home modified into two independent living areas for two separate families. Apartment complexes are large buildings with many individual units. Townhouses and semi-detached houses are further examples of multifamily housing.

Multifamily housing is in high demand in the United States due to its various financial advantages. Renters interested in multifamily properties must contend with America’s housing crisis. Years of surging rent and other economic factors have dramatically increased multifamily rental costs. In 2022, half of US renters were cost-burdened, meaning renters spent at least 30 percent of their monthly income on housing costs. The average rent for an apartment in America increased from less than $900 monthly for a one-bedroom in 2017 to $1,149 at the end of 2023. Apartments in residential buildings with five or more units are the largest rental housing type in the country. Close to 40 percent of renters lived in an apartment in a large multifamily building in 2022.

Not all real estate categories are defined by the structure. Distressed property, for example, is about to be foreclosed on or has already come under the control of a financial institution. Mortgage lenders can assume control of a distressed property. Many real estate investors prioritize such properties, which they can acquire at significantly reduced prices. Investors can rehabilitate commercial spaces or renovate distressed single-family homes and sell them for a profit.

Other types of real estate describe how or why the property was developed. Build-to-rent (BTR) is a relatively new trend in the rental housing market. These developments combine the advantages of single-family rentals and gated communities, resulting in a professionally managed community of single-family rental homes outfitted with numerous amenities. Approximately 97,000 BTR residences were completed in 2023, a 45 percent increase from 2023.

These are only a few of the real estate categories at IMN. Real estate professionals can visit imn.org to learn more about real estate funds, family office and capital raising, residential mortgages, and more.

​Environmental, social, and governance (ESG) investing has evolved from a niche strategy to a mainstream approach, merging ethical considerations with financial returns. Often referred to as sustainable investing or socially responsible investing (SRI), ESG investing evaluates companies based on their adherence to certain environmental, social, and governance criteria. This approach aims to foster a more sustainable and ethical business environment, while also potentially enhancing investment returns.

The popularity of ESG investing has surged, with ESG-specific mutual funds and ETFs reaching a record $480 billion in assets under management (AUM) in 2023. Brokerages and mutual funds now offer various financial products that adhere to ESG principles, making it easier for investors to incorporate ESG criteria into their portfolios.

The environmental aspect of ESG evaluates a company's ecological footprint, examining factors such as greenhouse gas emissions, waste production, resource consumption, and impact on biodiversity. Companies demonstrating leadership in these areas are often seen as more resilient to climate-related risks and regulatory changes. For example, investments in renewable energy, clean technology, and sustainable agriculture align with the global focus on addressing climate change and protecting the environment.

The social dimension examines a company’s relationships with its stakeholders, including employees, customers, suppliers, and the broader community. Key considerations encompass labor practices, diversity and inclusion, human rights, and product safety. By investing in companies that prioritize social responsibility, investors can contribute to positive social change while also mitigating reputational risks.

Governance focuses on a company's leadership and oversight, including board structure, executive compensation, and financial reporting. Strong governance practices, such as board diversity and transparency, mitigate risk and build investor trust.

ESG investing has a number of benefits. Companies are increasingly investing in green bonds, sourcing materials responsibly, and reducing their carbon footprints. These efforts not only benefit the environment, but also enhance the companies’ reputations and compliance with evolving environmental regulations. ESG investments contribute significantly to achieving the United Nations’ 17 Sustainable Development Goals (SDGs). By investing in renewable energy, promoting diversity and inclusion, and supporting ethical practices, ESG investors drive progress toward goals like affordable clean energy, gender equality, and reduced inequalities. This collective effort promotes a more sustainable and equitable world.

Studies have shown that ESG investments often outperform traditional investments over the long term. ESG-focused companies typically demonstrate strong financial management, operational efficiency, cost savings, and resilience, which can lead to higher returns and reduced downside risk.

The demand for sustainable products driven by ESG investing encourages companies to innovate and launch eco-friendly options. Businesses that adhere to ESG principles tend to be more adaptable, anticipating and mitigating risks associated with climate change and regulatory changes. Companies like Cisco, Verizon, and Apple have successfully implemented ESG strategies, leading to significant achievements in renewable energy usage and reduced carbon footprints.

Companies with strong ESG practices often create positive working environments that attract and retain top talent. Employees are more engaged and see their roles as meaningful, fostering a culture of respect and commitment. High ethical standards and social responsibility also enhance a company's reputation, making it an attractive employer for skilled professionals.

ESG investing helps companies stay ahead of regulatory changes, avoiding penalties and compliance costs. By focusing on environmental practices, employee welfare, and ethical leadership, businesses can better navigate regulatory landscapes and secure government support. This proactive approach ensures long-term stability and sustainability.

While ESG investing has gained significant traction, it's important to approach it with a critical mindset. Some may engage in "greenwashing," where companies make misleading claims about their sustainability efforts, for the sole purpose of appearing progressive and sustainable. It is crucial to conduct thorough research and consider the underlying investment approach and methodology when selecting ESG investments.