We didn’t set out to build a real estate investment firm. For the first decade, the focus was on investing our own wealth in the field we knew best: real estate. We wanted to align our portfolio with our values. Our goal was to invest responsibly — to protect and grow our capital — with zero debt. As time passed, people started to ask to invest with us. We realized that folks had few alternatives to invest, if not with us, so in 2014 we founded BENA Capital as a private real estate investment firm.
BENA Capital Mosaic Fund LP was formed in October 2018 to acquire real estate properties to deliver stable cash flow and value-add appreciation. The Offering targeted an investment term ending in 2023. Cash flow returns for investors are BENA Capital’s primary driver, and we are pleased that over the past five years, BENA Capital has been able to deliver a consistent quarterly cash dividend meeting our targets at an annualized return of 4.9% for Tier I investors and 5.3% for Tier II investors.
In addition, this month, we have returned 100% of our investors’ initial capital investment with the successful sale of two multifamily properties in Granbury, TX and Fort Worth, TX. Both properties were excellent performers for the Mosaic Fund, in terms of cash flow and appreciation. We purchased the Granbury property for $236,000 and sold it for $503,000, representing an appreciation of 113% over 4.5 years. This is despite the challenges of COVID-19 and the significant rise in interest rates. Being able to quickly identify and purchase below-market properties in growing markets continues to be a winning strategy.
We purchased the Fort Worth property in December 2020 as the final property in our Mosaic Fund portfolio. Our rationale for the acquisition was clear: despite the COVID-19 pandemic being in full swing, the DFW area had outperformed all other Texas Metros, with an average occupancy of 91.2% as of July 2020. Overall, DFW rent collections remained stable and rent growth was expected to stay positive, which they did. We purchased the property for $160,000 and sold it for $219,000, representing an appreciation of 36% over just 2.5 years.
BENA Capital identifies, analyzes, and selects portfolio investments based on strict quantitative and qualitative criteria. This disciplined due-diligence process ensures a data-driven approach and has enabled BENA Capital to consistently produce strong returns for our investors. Sell discipline is one of the core components of BENA Capital’s conservative capital strategy and risk-management framework. Based on our analysis, and as we approached the 5-year maturity date of the Mosaic Fund, we determined that it was a prime opportunity to capitalize on the built-in gains for both of these Texas properties.