Smart Investments
Boutique Apartments raises capital through wealthy individuals.
Boutique Apartments is quickly catching the eye of investors throughout Denver. More than 100 wealthy individuals invest in the company, which acquires and manages its properties on behalf of investor clients. “The company offers a unique investment strategy that provides accredited investors with an opportunity to invest in properties well below their replacement value with the potential to receive a substantial return on their investment,” says Grant Barnhill, Boutique’s president.
The company has launched three equity funds for accredited investors, who must earn at least $250,000 a year and have a net worth of $1 million. The typical investor is someone who wants to build passive cash flow, but doesn’t have time to manage his own investment and is willing to tie up money for several years, says Barnhill. The minimum investment is $50,000 per individual. The company’s latest fund even allows individuals to invest their retirement accounts–such as IRAs and 401(k) plans–through Boutique.
“I am always very skeptical about investing with other people, but in this case, Grant’s knowledge of the boutique apartment market really was compelling,” says Alan Wyngarden, an investor in Boutique Apartments and senior vice president at mortgage banker MegaStar Financial. “[The funds] are really a great fit. I really didn’t need cash flow from these; I just wanted to build up equity.”
Other investors must be just as confident in Boutique’s ability. The company raised $4.5 million in fewer than 15 months for Fund I, which includes four buildings. Barnhill expects investors to receive substantial rewards for placing their money with his company: Boutique offers investors a targeted annual rate of return of 16 to 21 percent during a 10- to 12-year period. But the opportunities for small investors to earn such returns with the company may be more limited in the future. Going forward, the company would like to streamline its capital-raising process and connect with even higher net-worth investors and small institutions.