Investment strategy
Buy well, build well, hold long enough.
Our approach is deliberately unexciting: durable residential product in a growing market, financed conservatively and held through a full cycle.
The thesis
Housing demand in the Triangle is structural, not cyclical.
People keep moving here for work, and the region keeps under-building the housing they need. Employment is anchored by research, healthcare, technology, and public universities — sectors that do not evaporate in a downturn the way single-industry markets do.
At the same time, for-sale housing costs have risen faster than incomes. Households that would historically have bought are renting longer, and they want the space and privacy of a house rather than a walk-up apartment. That is the demand we build for.
We are not trying to time the market. We are trying to own well-located, well-built residential assets in a region where the population is going up, and to finance them so that a slow year does not force a sale.
Acquisition criteria
| Asset types | Multifamily, build-to-rent, value-add |
|---|---|
| Markets | Wake, Durham, Johnston, Chatham |
| Project size | 80–300 units |
| Total capitalization | $20M–$75M |
| Target investor IRR | 14–18% |
| Target equity multiple | 1.7×–2.0× |
| Preferred return | 7% cumulative |
| Hold period | 4–7 years |
| Leverage | Up to 65% loan to cost |
All criteria to be confirmed by client
Our process
Five stages, in order, every time.
Source
Most of our sites never reach a listing. We track municipal pipelines, maintain standing relationships with land brokers and family landowners, and keep a running list of parcels we would buy if they became available. When one does, we already know the utility capacity, the zoning path, and roughly what it is worth.
Underwrite & entitle
We model to in-place market rents with no growth assumed in year one, order a third-party market study, and complete environmental, geotechnical, and survey diligence during the study period. We stress the model against slower absorption and a higher exit cap rate. If it does not survive that, we release the contract.
Capitalize
Debt is placed first, then the offering opens to our investor list. You receive the private placement memorandum, operating agreement, subscription documents, and full financial model. Subscriptions are completed electronically and funds are held until closing conditions are met.
Build & operate
We manage the general contractor directly, administer construction draws, and inspect the work. Once units deliver, we oversee lease-up and then ongoing operations. Investors receive quarterly financials, site photographs, and a written project update.
Distribute & realize
Cash flow is distributed quarterly per the operating agreement, with limited partners receiving their preferred return before any promote is paid to the sponsor. At the end of the hold we sell or refinance, return capital, and distribute the profit split.
Risk management
How we try not to lose money.
Return targets get the attention. Downside protection is what determines whether you keep the return.
Moderate debt, fixed where possible
We cap loan-to-cost and prefer fixed-rate or rate-capped construction debt with extension options, so a rate move does not force a distressed sale.
Funded contingency and operating reserves
Every capitalization includes a hard-cost contingency and an operating reserve sized to carry the asset through a slower-than-modelled lease-up.
More than one way out
We underwrite each project so it works as a hold-and-refinance as well as a sale. Being able to wait is the most reliable protection there is.
Guaranteed maximum price contracts
Where the market allows, we contract on a GMP basis with a contractor whose work we have inspected, and we hold retainage until punch list completion.
Staggered deliveries
We phase project starts so that our pipeline is not all delivering into the same twelve-month leasing window.
We buy conditioned on approvals
Wherever possible, land is acquired subject to obtaining zoning and site plan approval, so entitlement risk sits before closing rather than after.
Structure & tax
How the deal is put together.
Each project is held in its own limited liability company. Investors subscribe for limited partner units and Nexus serves as manager. Your liability is limited to the amount you invest.
Limited partners receive a cumulative preferred return before the sponsor participates in profits. After the preferred return and return of capital, remaining profit is split between limited partners and the sponsor on the schedule set out in the operating agreement.
Because you hold a direct interest in the property-owning entity, depreciation flows through to you on a Schedule K-1 and can shelter a portion of the cash you receive. Cost segregation studies are commissioned where the numbers justify them.
Nexus does not provide tax or legal advice. Every investor's situation differs and you should review any offering with your own advisors.
Waterfall example
| First | 7% cumulative preferred return to limited partners |
|---|---|
| Second | Return of limited partner capital |
| Then | 70 / 30 split, LP / sponsor |
| Above 18% IRR | 60 / 40 split, LP / sponsor |
| Reporting | Quarterly statements, annual K-1 |
Illustrative only — actual terms vary by offering
Next step
See how the strategy looks in a live deal.
Our current offering documents show the underwriting, the debt terms, and the full waterfall in detail.