Why We Invest in Necessity-based Retailers

Investors today are navigating a complex landscape shaped by geopolitical events, trade policies, and market volatility. These variables collectively prompt a more cautious investing approach, with resilient assets that offer capital preservation and stable, long-term income taking center stage. That has always been a core focus of BENA Capital’s debt-free investment strategy. While there is no such thing as a 100% guarantee when it comes to investments, there is a next best thing — options like real estate — where there’s intrinsic value in the assets. This allows investors to minimize risk by being extremely selective and adapting their strategy to market demands and economic trends.

Whether you are looking for low-volatility growth or seeking safe haven from market fluctuations, allocating a slice of your investment portfolio to well-managed, quality real estate is a powerful tool for investors to build wealth, generate consistent cash flow and hedge against inflation and vulnerability in the stock market.

Our current active funds at BENA Capital focus on assets with strong tenant credit that offer reliable cash flow and potential value appreciation as market dynamics evolve. With careful due diligence – evaluation of lease terms, location quality, historical performance and growth indicators – we select high-performing assets for our fund portfolios with long-term income stability in mind.

As an example, the BENA Capital Premier Fund portfolio includes necessity-based retailers like Dollar General. Whenever there are concerns about a potential down-turn or ongoing inflation, consumers tend to shift their spending habits towards discount buying and essentials, making Dollar General’s business model relatively recession resistant. During the pandemic, when many retailers shuttered their businesses, Dollar General continued their growth trajectory and were able to open new storefronts.

From January through March of this year, the US economy shrank by 0.2%. That is the weakest economic growth for the US since early 2022. Trade wars have caused both businesses and consumers to tighten their purse strings.

While most traditional retailers are downgrading their profit and sales outlooks, for the period ending May 2, Dollar General’s sales actually climbed 5%, beating Wall Street expectations. Dollar General set a quarterly sales record of $10.4 billion as consumers trimmed their budgets and spent more at bargain retailers. Sales at Dollar General stores open at least a year increased 2.4%, with the average transaction amount rising 2.7%.

Even in times of economic uncertainty, there are opportunities to re-balance your portfolio and shift your capital to assets that can continue to provide steady income and stable returns in the long-term. You just have to know where to look.

Real Estate - Your Solution to Stock Market Turbulence

Over the course of just a few short months, 2025 has already been earmarked as a year of volatility in the stock market. Equity prices flip-flopped before taking a nose-dive, reflecting the concerns that investors had around inflationary pressures and the new administration’s tariff policies – the S&P 500 fell 4% and the Nasdaq Composite Index posted a steep 10% decline in Q1 2025. While we may very well see a turn-around later in the year if tariff and international trade tensions were to ease up, investors are right to be concerned about stock market volatility.

BENA Capital’s funds are designed for those seeking low to moderate investment risk, stable income, and opportunity for long-term appreciation gains. With savings yields now significantly lower than what they were before the Fed’s three consecutive rate cuts in the latter half of 2024, and with after-tax yields from bonds and Treasuries barely keeping up with rising inflation rates, real estate can still offer investors the opportunity to capture both income and growth, all the while hedging against inflation and taking cover from stock market turbulence.

At BENA Capital, we have been pleased to distribute cash dividends to our investors every single quarter since inception in 2014. We acquire each property in our portfolio after stringent due-diligence and we continually perform local market analysis to monitor for peak selling opportunities. This data-driven strategy has enabled BENA Capital to consistently produce strong returns across our Funds - both from asset appreciation and dividend yields - for our investors, quarter after quarter, year after year.

How to Reposition your Portfolio Now That Interest Rates Are Lower

Late last year, in December 2024, the Fed made a third consecutive cut to the federal funds rate, lowering the target range to 4.25–4.50% - a full percentage point cut from where the year started. As a result, CDs and Savings accounts across the board have lowered their APY, and average national deposit rates dropped from 0.46% in September 2024 to 0.41% as of January 2025.

When interest rates are cut, savers see diminishing returns. Investors should consider assessing and rebalancing their portfolios by adjusting their financial strategies towards more growth-oriented options such as stocks and real estate to keep pace with inflation and maximize yield.

While it may be tempting for some to take advantage of the lower cost of financing and increase borrowing at this time, it can be easy to take on excessive debt, which can risk financial strain if income or cash flow is interrupted. If you take on a variable-rate loan or if you need to refinance at higher rates later on, for example, your debt payments could skyrocket. The risk of default increases with overleveraging, so we always advise our investors to exercise caution in ensuring that their financial decisions remain in alignment with their short and long-term goals.

Lower interest rates can also fuel speculative investment behavior, but if asset prices decline or market conditions change, those who are highly leveraged face significant financial loss. Overleveraged investors risk losing their properties, and in some cases, their personal assets.

Investing in a debt-free fund like BENA Capital protects your portfolio from downside risk. It is a solution for investors looking to diversify their risk profiles, and it offers a better alternative to low-yield savings accounts and bonds. Debt-free funds can provide stable income and a safe haven when the economy contracts unpredictably.

At BENA Capital, we were pleased to distribute cash dividends to our investors every single quarter since the Fund’s inception in 2014. We purchase each of our properties with careful analysis of proximity to demand generators, strong tenant demand, and robust investment activity in the immediate vicinity, and we continually monitor each market to capitalize on peak selling opportunities. This disciplined due-diligence and management process ensures a data-driven approach and has enabled BENA Capital to consistently produce strong returns across our portfolio of properties - both from asset appreciation and dividend yields - for our investors, quarter after quarter.

When is it a Good Time to Invest in Real Estate?

We have been investing in both residential and commercial real estate for over 17 years now. Over the years, a lot has changed, but there is one unfailing constant. One of the questions we get asked most by our investors is – How do I know this is a good time to invest?

Well, the answer is – it depends. In every single lead conversation we have with our investors, our question for them is – what is your goal? What are you trying to achieve?

Responses range from investors who want to want financial freedom via a passive income source, to those who are trying to escape stock market volatility and diversify their portfolio, to those wanting a quick win because they’ve heard some success story from their neighbor’s friend, to those looking for potential long-term appreciation with stable cash flow in the interim.

But the majority of these investors tend to see markets in one of two states: climbing or falling. This view leads people to invest at market tops and sell at market bottoms. What we try to explain to them is that the real estate market is actually a cycle, in which there are technically five phases – working up from market recovery, down to recession. Each phase may last a few months to a few years, depending on the market.  What's more, each phase rewards very different investment strategies.

People may regret short-term investments when they see lower interest rates or fluctuations in certain markets. But every market is different, and requires a knowledge of which phase that market is in and what factors are driving it from one phase to the next. Rigorous analysis and due diligence, combined with a targeted strategy, can preserve wealth, generate stable, passive cash flow, and grow your investment portfolio.  

In our experience, it is not “when” is it a good time, rather, it’s about “where” to look and “what” your goals are. There are always opportunities out there – we look for areas that are growing, that have stable or growing economies. We avoid over-saturated markets; we run the analysis and ensure that there is sustainable demand. We look for distressed properties that have suffered from deferred maintenance or poor management, but are in prime locations that are well-positioned.

If you’re able to correctly identify the phase each market is currently in, good investments can be found whether the market is in a recession or expansion period, by adapting your investment criteria and exit strategy.

BENA Capital's funds provide investors with ease of entry, reliable quarterly cash flow, and portfolio diversification. Our proven strategies emphasize sound investing in carefully researched, quality properties that have steady, long-term capital appreciation potential.

Contact Us now to be placed on the waiting list and to receive BENA Capital Insights.

Two States Where Property Prices are Falling

According to Freddie Mac economists, the US is still facing a housing shortage crisis — an additional 1.5 million units would need to be added before we reach a “balanced market.” This shortage of homes has pushed the median US sale price up 5%, year on year.

But there are two states that are dealing with the opposite problem — too much supply. In Florida and Texas, properties are stagnating on the market. 

Coming out of the pandemic, both states built more homes to attract out of state buyers - new developments jumped in Florida and Texas more than in any other part the US. 

Now, demand is shifting away from these areas as local blue-collar workers have been priced out of homeownership and investors are starting to look elsewhere for better deals. In the last month, price growth in Florida and Texas has flattened, and listing prices for some metros are starting to come down. 

Both markets are also exposed to the same pressures as the wider housing environment. High mortgage rates, still hovering around 7%, are keeping many from buying new homes.

Real estate cycles can vary depending on geography and property type; the key is to be vigilant and to understand the nuances of each market and the best strategy to implement in each given situation. The opportunities are still out there if you know where to look. Knowing real estate markets intimately and being able to correctly identify the phase each market is currently in, is the key to recognizing what is a good investment vs. what to pass on. In doing so, you can build a diversified real estate investment portfolio robust enough to weather any storm.

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.

For example, the Mosaic Fund (our stable income fund) made 18 consecutive quarters of distributions, paid out over $210,000 in cash flow to our investors over the term of the fund, and successfully returned all of the original capital invested with us. In addition to quarterly dividends, we were pleased to have surpassed the projected appreciation targets for the Mosaic Fund, resulting in a remarkable final distribution of profits to each of our valued investors. Through the course of the fund, we achieved a 37.44% Total ROI for our Tier I investors and a 41.02% Total ROI for our Tier II investors.

The BENA Capital Premier Fund was formed in November 2020 to acquire investment real estate properties to deliver cash flow and asset appreciation. The fund had a solid Q2 2024, delivering a 7.2% annualized return on capital deployed into real estate.

BENA Capital's funds provide investors with ease of entry, reliable quarterly cash flow, and portfolio diversification. Our proven strategies emphasize sound investing in carefully researched, quality properties that have steady, long-term capital appreciation potential.

Contact Us now to be placed on the waiting list and to receive BENA Capital Insights.

Depreciation in Real Estate - Q&A

We had so much interest from our “Depreciation in Real Estate & Why You Should Care” article last month that we wanted to use this issue of BENA Capital Insights to address some commonly asked questions that we received! 

As we mentioned in our last issue, one of the many advantages to having real estate as part of your investment portfolio is the use of depreciation to lower tax burdens. Depreciation recognizes that buildings and other improvements have a limited useful life. When you do your taxes, the IRS permits property owners to write off the value of an asset and claim tax savings through depreciation deductions. 

Here are some great questions we received:

Q: Can you depreciate land?

No. Land cannot be depreciated for tax purposes. When you purchase real estate, the cost is typically allocated between the land and any improvements (ie. buildings).  Depreciation only applies to tangible property such as buildings, machinery, equipment, vehicles, furniture, etc. Land is considered a non-depreciable asset because it is not subject to wear and tear over time.

Q: You mentioned that buildings and other improvements have a limited “useful life” - what does that mean?

The useful life of a building, in the context of depreciation, refers to the period over which the cost of the building can be deducted as an expense for tax purposes. It is an estimate of how long the building is expected to remain economically viable or useful for generating income. The IRS sets guidelines for the useful life of different types of property, including buildings. Typically, residential rental properties are depreciated over 27.5 years, while commercial buildings are depreciated over 39 years. These periods are used to calculate annual depreciation deductions. An asset can be depreciated only over this period of time.

Q: What happens when you sell?

One important thing to remember about depreciation is that the IRS taxes that depreciation upon the sale of a property through what is known as depreciation recapture. When you sell the property, any profit from the sale is generally subject to capital gains tax. Capital gains are calculated as the difference between the sale price and the property's adjusted basis (typically the original purchase price plus any improvements).

Depreciation recapture comes into play if the property is sold at a gain and you have previously taken depreciation deductions on it. The IRS requires that a portion of the gain attributable to the depreciation deductions must be "recaptured" and taxed as ordinary income rather than as capital gains.

Depreciation recapture ensures that taxpayers do not indefinitely defer taxes on the income generated by depreciation deductions.

There are many benefits to depreciation including its ability to offset your taxable income; however, it’s important to be aware of depreciation recapture, which makes you responsible for paying the taxes on the depreciation taken over the life of your investment.

Depreciation in Real Estate & Why You Should Care

Depreciation in real estate refers to the gradual decrease in the value of a property over time due to wear and tear, aging, etc. Depreciation recognizes that buildings and other improvements have a limited useful life and will eventually need to be replaced or upgraded, and it spreads out the cost of these assets. The most important takeaway for investors is that depreciation is an “expense” that can be deducted from taxable income, allowing real estate owners to offset some of their tax liability.

Here’s why you should care about depreciation in real estate:

1. Tax Benefits: Depreciation allows property owners to deduct a portion of the property's cost from their taxable income each year. This reduces the amount of income that is subject to taxes. Therefore, it can be a powerful tool for preserving wealth.

2. Improves Cash Flow: By reducing taxable income, depreciation can improve cash flow by lowering the amount of taxes you owe each year.

3. Financial Planning: Understanding depreciation is crucial for financial planning and budgeting. It helps property owners estimate future tax liabilities accurately and make informed decisions about investments and property management.

And remember! While depreciation lowers the value of the property on paper for tax purposes, it doesn’t necessarily reflect the market value or potential appreciation of the property over time.

BENA Capital Announces New NNN Retail Acquisition in Missouri

BENA Capital is pleased to announce the Premier Fund’s second acquisition of a single tenant retail site tenanted with Dollar General located in Republic, MO.

Dollar General is one of the most sought after tenants for retail sites such as this. It is publicly traded (NYSE: DG), is a growing business, and provides a corporate guarantee to its lease. Three-quarters of U.S. residents now live within five miles of a Dollar General store. DG also shows strength in weak economic environments, providing downside risk protection during recessions.

This property met our stringent acquisition criteria – possessing both high cap rate and favorable NNN lease terms – to ensure we can balance the fund’s return goals while mitigating portfolio risk. The property’s prime location on US HWY 60 – next to a community college and across the street from a bustling office park - contributes to the Dollar General’s solid, built-in customer base, with over 17,000 vehicles per day. It is located in the growing city of Republic, MO, right outside the thriving Springfield, MO metro area. Springfield's economy and population are both growing rapidly — which is key to the success of long-term prospects. The area's big education and healthcare sectors mean that the local economy is more stable than elsewhere.

We are very excited about the prospects of this property due to its desirable proximity to demand generators and the robust growth in the immediate vicinity.

The BENA Capital Premier Fund was formed in November 2020 to acquire investment real estate properties to deliver cash flow and asset appreciation. The fund had a solid Q4 2023, delivering a 7.2% annualized return on capital deployed into real estate.

Contact Us now to be placed on the waiting list and to receive BENA Capital Insights.

Celebrate With Us - BENA Capital Mosaic Fund News

Celebrate with us today as we announce the successful sale of the final property in our Mosaic Fund portfolio! Over the past five years, our fund strategy for the Mosaic Fund has served us well: acquire value-add properties for below market prices using all-cash offers, operate efficiently, and deliver stable cash flow. We are pleased to have made 18 consecutive quarters of distributions, paying out over $210,000 in cash flow to our investors over this time period and successfully returning all of the original capital invested with us. In addition to the quarterly dividends previously distributed, we are pleased to have surpassed the projected appreciation targets for the Mosaic Fund, resulting in a remarkable final distribution of profits to each of our valued investors. Through the course of the fund, we achieved a 37.44% Total ROI for our Tier I investors and a 41.02% Total ROI for our Tier II investors.

To all our Mosaic Fund Investors — Throughout our partnership, your unwavering support and trust have been the cornerstone of our accomplishments. Again, thank you for being a valued investor and for placing your confidence in us. It has been a pleasure to be able to return all your capital along with a healthy profit!

BENA Capital Mosaic Fund Nearing 5-Year Term

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.