RiverOak is investing in Redbrick Partners Fund 2, a fund developed by Washington, DC-investment management firm Redbrick Partners LP. The investment, which will be funded equally by RiverOak Fund II and RiverOak Fund III, will support the Redbrick fund's acquisition of homes valued at approximately $70,000 that rent for approximately $1,000 per month.
"This is an investment opportunity that requires an intense level of hands-on local market research and individual, personal inspection of each property," RiverOak Investment managing director George Yerrall says. "This is congruent with our own philosophy of capitalizing on local market knowledge and experience, while choosing assets that institutional investors avoid."
He adds that to his knowledge there is no other investment fund in the US that allows individual investors to buy shares in a diversified portfolio of single-family rental homes. Yerrall says that the concept is popular in Great Britain.
Company officials say the RiverOak will be an "unpromoted" investor, receiving a straight percentage return on its investment in Redbrick. "We only make wholesale priced investments regardless of the investment vehicle," Yerrall notes.
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