Outperforming Buffett: How These Accredited Investors Achieved Superior Returns

Legendary investor Warren Buffett is probably the most trusted figure in the world of finance.

With his fairly consistent market-beating history, it’s safe to say he’s earned the laurels fair and square. The company has accomplished an 11.14% average annual since 2005 by following an age-old mantra, “Invest in what you know.” 

But real estate does not fall under the Oracle of Omaha’s area of expertise, so he chooses to avoid it entirely. What kind of returns would his company be able to pull in if it specialized in real estate? 

The answer is a 25% IRR on average. That’s how much a group of seasoned real estate experts accomplished in the same time frame Berkshire Hathaway saw its 11.4% IRR. 

And there’s no secret sauce behind it. They specialize in multifamily value-add properties, which is the only real estate class they acquire. They locate discounted units, give them a five-star makeover with expertly sourced materials, often at a fraction of the market price, and upload them to Trion Properties where accredited investors can invest in supreme value-add units.

"I think that we buy well. You make the money on the buy, so that's half the battle. We pick up a lot of properties off-market, so we're starting with a lower basis. We're also buying in great markets," said Trion Properties Managing Partner Max Sharkansky, who has 20 years of real estate experience.

Sharkansky and his colleagues at Trion Properties have acquired 8,600 units over the past 18 years using the tried-and-tested method. But the company handles more than acquisitions. Because it specializes in value-add properties, its staff also oversees its own construction projects and manages the properties when they are finished. Tenancy across all 84 buildings is maintained at relatively impressive levels, providing a consistent cash flow for investors.

Patterson Court in Orlando is among Trion Properties’ offerings. (Photo courtesy of Trion Properties)

The returns are further boosted by the immense cost-cutting that takes place during the remodeling stage.

“Having a national presence gives us opportunities to make improvements that regional operators often can’t make,” says Farhan Mahmood, a partner with Trion who handles West Coast acquisitions. “For instance, we were able to source quartz countertops from a Chinese distributor out of California at about 30% of what you would have to pay in Oregon. So we were able to make this improvement to the units at a fantastic price and significantly raise the asking rents when nobody else in the area was doing anything like that.”

This 230-unit Miami property has a projected equity multiple of 1.95x. (Photo courtesy of Trion Properties)

Because the company’s services are reserved mostly for well-off accredited investors, Trion Properties puts considerable effort into providing unparalleled special treatment to each of its 1,200 investors. Click here to become one of them.