A new high-growth fund has just made it much easier for Australians to get a foothold in the lucrative US residential property market.

Unlike any other unlisted options currently available,  the Cornerstone International Property Fund allows investors to profit from American bricks and mortar without the hassle of paying American tax or opening foreign entities.

Cornerstone offers the opportunity to diversify away from what’s often seen as our overheated domestic property market for a minimum of only AU$50,000. The initial focus is on single residential dwellings in Florida, Texas, Michigan and Missouri, states that all offer high growth.

 

Returns on the flip side

The Cornerstone team’s strategy is to judiciously identify suitable properties, renovate or complete short-term property development and sell for profit, with the profit being reinvested in the fund. This provides exposure to a wide range of properties, ensuring robust risk management.

The minimum investment term is 12 months, but the fund encourages a longer-term horizon of at least five years, which allows investors to better benefit from the potential growth and stability.

 

Set and forget

The fund was created by Melbourne-based Lindsay Stewart and Michael Eagar, who have extensive experience in the US property market, funds management and financial planning.

Their experience working with many individuals and families inspired their vision to create a low-dollar-entry-point investment offering diversification, with reduced risk by avoiding borrowing for development, but targeting 13% per annum returns compounded over the long-term.

 

 

Michael Eagar, left, and Lindsay Stewart. Picture: Cornerstone International Property Fund

 

With about 20 years’ experience in property, and 10 of those in the US market, Stewart is a founder and director of Cornerstone and its fund manager Condor International Property Group. He is also the founder and global operations manager of Star Dynamic Property Investments, the leading Australian-based company assisting investors into the US property market.

Co-founder and director of both Condor and Cornerstone Michael Eagar has been working in financial services for more than a decade, and is a Certified Financial Planner and Qualified Property Investment Adviser.

“What we were looking to do is develop a simplified way of getting investors into the US market, without the complications of international taxation and entities, and with a lower dollar value entrance point,” Stewart said.

“We spent an extensive amount of time setting up this fund to ensure it solves the risks and issues commonly associated with property funds. By taking care of the US tax implications and managing the complexities, we provide investors with a hassle-free investment opportunity.”

Eagar added: “We wanted to create a set-and-forget strategy for investors, where they can participate in the US property market for the long term and build their wealth without being burdened by interest rate risks or complicated tax procedures. We believe in providing investors with the opportunity to build substantial wealth over time and this fund is designed to target excellent investment returns and capitalize on the lucrative US residential property market.”

 

Boots and suits on the ground

Stewart and Eagar’s knowledge of the market is complemented by handpicked and experienced property professionals in the US including licensed real estate agents, licensed and experienced building contractors, plus operations and acquisitions managers.

 

Supersized market

The attraction of the US residential housing market is that it’s approximately 12 times the size, in volume, of the Australian market but it’s much more affordable in most areas.

The widely used Zillow Home Value Index reported that the mean home price in the US is approximately US$348,853 (roughly equivalent to AU$505,837) – almost half the mean price of Australian homes at AU$912.70.

Stewart and Eagar plan to expand the fund offering in the future to cover other investor types and needs.

 

This article was developed in collaboration with Condor, a Stockhead advertiser at the time of publishing.  

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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