Answers to three questions investors are currently asking us:


Brian D. Milovich

Managing Principal, Calvera Partners

1) Will Calvera’s ratio of debt/equity for acquisitions change in 2024?

I’m starting to see some acquisitions pencil to 70% loan-to-value (LTV) which is a big improvement from 9 months ago when it was closer to 55% LTV. Our fund has a LTV limit of 75% for any single asset and 65% for the portfolio. We find it promising to be within those ranges as we seek acquisitions in 2024. That means more properties for the Calvera Income and Growth Fund.

2) How are skyrocketing insurance costs, effecting your evaluations of markets and properties?

This is having a large impact on potential acquisitions. With property tax estimates in markets with potential weather events (wind/hail/tornadoes) of more than $1,000/unit, it negatively impacts cash flow and lowers values. Many insurance carriers have simply left certain markets. Once they come back in the market, I believe insurance premiums will begin to decrease.

3) What are the pros and cons of using IRR (internal rate of return) to assess a sponsor and/or fund’s performance?

IRR can be a very useful measure of performance if you also take into consideration the amount of equity used and the time horizon. Short deals (i.e., 1-3 years) and those with high leverage (i.e., low equity) will have huge IRRs. If they don’t, then something is wrong and a lot of risk was taken for an inadequate return. What’s more impressive is seeing a high IRR with modest leverage and a normal investment period (i.e., 4-6 years).


Click here for more information on the Calvera Income and Growth Fund.

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Performance data listed in this website or is otherwise provided by Calvera Partners, LLC, or its affiliates (“Calvera”) with respect to a particular property or project represents past performance calculated for the relevant project and does not purport to reflect the overall performance of any private funds managed by Calvera, which may include other projects, as well as charge additional fees or carried interest, or have additional expenses, which would reduce the overall performance of the project from the perspective of a fund investor. Past performance does not guarantee future results; Current performance may be lower or higher than performance data presented. Calvera is not required by law to follow any standard methodology when calculating and representing performance data; the performance of any of Calvera’s projects may not be directly comparable to the performance of other investment vehicles or funds; and qualified potential investors can contact Calvera Partners for more current performance data of any private funds managed by Calvera. 

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