WHAT IS VERTICAL INTEGRATION
Vertical integration is a business strategy where a company takes control of multiple stages in the production or distribution process of their product or service. In the context of real estate, this means managing every step of the property investment and management process, from acquisition and asset management to property management and maintenance.
HOW WE ARE VERTICALLY INTEGRATED
At Black Swan, we embody the concept of vertical integration from head to toe. We manage every aspect of the real estate process in-house. This means work directly with our investors and handling our own asset management. We have our own real estate brokerage to acquire deals, and we conduct our own renovations and property management. Our commitment to this approach is so deep that we even handle our own snow and lawn care (and we’re planning to have our own garbage truck to service our properties in the near future)! This level of integration allows us to maintain quality, control, and consistency across all our operations.
WHY THIS IS GOOD FOR YOU
Our vertically integrated approach is designed to maximize profitability for you, our investors. We cut out nearly all third-party operators and keep all operations in-house to eliminate the need for external profit centers that would typically decrease investors’ bottom line. This means that every dollar we save by managing services in-house translates directly into increased asset value. Because real estate is valued by Net Operating Income, and we’re generally in a 5% cap market (which means a 20x multiple): for every dollar we keep at the asset level, we generate $20 of asset value. This strategy ensures that we’re incentivized to keep capital generated at the asset level, leading to extremely profitable buildings – and more dollars on the bottom line for our investors. It’s a win-win approach that aligns our goals with those of our investors – and ensures everyone is rowing in the same direction.
