The firm originally operated as Windy City RE and was established in 2003. In 2021, the firm legally reincorporated as Clear Investment Group with an exclusive focus on workforce housing.
Many of the assets CIG acquires require new systems as well as renovations that allow us to focus on green initiatives. These include energy-saving devices such as LED lighting retrofits, occupancy sensors, efficient heating systems and low energy usage elevator cars.
CIG strives to create a workplace governed with transparency, inclusivity and diversity. We are a proud woman-owned firm with a highly diverse workforce.
In an environment where affordable housing is ever more difficult to find, we create safe habitable housing by acquiring distressed assets, and turnkeying properties that the working class can feel proud of – we transform communities. Clear Opportunities Foundation also makes financial gifts to local charities; particularly those that work to break the cycle of poverty. Clear Opportunities Fund I is audited under US GAAP and the firm provides full transparency and reporting to investors down to the asset level financial statements.
CIGs broader mission is to impact communities with each and every project to bring safe, habitable housing for working Americans – homes that tenants and their families can be proud of.
We’re different because we’re laser focused on what we know and do best: opportunistic real estate. Our 20 year+ history of acquiring distressed assets is highly formulaic. From underwriting acquisition costs, capital costs, lease up timetables, to preparing an asset for sale, significant groundwork is done BEFORE we even sign a purchase and sale agreement to buy and asset. Our seasoned management team draws upon their more than 60 years of experience in creating comprehensive, ground- up plans for each asset and spends a significant amount of time walking properties and communicating with stakeholders. CIG determines why an asset is not performing as it should and the course correction occurs prior to ownership of an asset – speaking to the Mayor of a particular city, the Attorney General, Code Enforcement, the municipal police or Sheriff’s department, the firm has a very clear view of how to bring assets back on line in an efficient and effective way, with buy in from all stakeholders all the way down to the tenant.
CIG has been investing in assets for more than 20 years. Our historical performance to external investors (since 2011) is an equity return of 63%+ and a Net IRR of 37.3%.
CIG affiliated companies, principals, employees and family invest approximately 10% of capital in every deal. We believe it is important to align our interests with those of our investors. A significant amount of our personal balance sheet is invested alongside members in our Fund.
CIG has a very investor-friendly waterfall. Investors earn 8% preferred return on their called equity. Once this hurdle is met, the common members are allocated 80% of the next tranche of return and the managing member is allocated 20% up to a 14% return to common members. Thereafter, the return moves to 70% common member and 30% to managing member. There is no catchup to the managing member on the 8% preferred.
CIG typically buys multi-family portfolios in secondary or tertiary cities, with a unit count of 300-1500. These assets usually have a high degree of managerial distress. While there is always some deferred maintenance, and some capital projects that necessitate a capital infusion, primarily we target assets that have been (or continue to be) mismanaged by sellers. These sellers simply don’t have the capital or the knowhow to turn assets around.
Management Fees are 2% on investments <$5MM and 1.5% on investments >$5MM. During the investment period, fees are charged on committed capital and switch to called capital, post the investment period. Many funds charge fees on called capital and switch fees to “value” post investment period. However, we feel that this does not align with investors’ best interest since many funds will try to acquire assets (that may not be ideal), simply to charge fees. Moreover, these funds will also mark assets such that they can ramp these fees (sometimes more than 2-3x cost basis) in order to increase the management fee charge. We do not align with this practice.
Equalization interest is charged to investors who invest in the Fund post the initial closing. Interest is charged to new round investors (and paid to prior round investors, not the Fund) at 8% per annum based on the date of subsequent closings. Equalization interest is calculated based on a per day rate if the new round investor is considered invested from the first closing date. For example, if the fund called 50% of the capital on a $1M investment made by 2 investors, each investor would submit $250,000 for a total of $500,000 or 50% of committed equity. Ninety days later, if the Fund closed an additional $1M of capital, the total committed capital would be $2M and the invested capital would only be $500,000. As such, the new investors would be charged equalization interest as follows:
90 days / 365 days x $500,000 (50% capital call) x 8% = $9,863 in interest payable to first round investors by second round investors.
Preferred return is a minimum rate of return that a common member can expect prior to any participation by the managing member. Preferred return is calculated based on called capital x 8% per annum (simple).
Typically, retirement accounts (Roth IRA, conventional IRA, SEP IRA, etc.) dollars can be invested in the Fund. While theoretically possible, rules around 401(k) and 403(b) account funds are more complex and may require prior approval from the plan sponsor.
Investment performance is calculated by NAV Consulting who is the Fund’s administrator. Information is presented in NAV’s investor portal.
Investment questions can be sent directly to IR@clearinvestgroup.com or we would be happy to schedule a call with one of our management team members.
