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Klaraos offers new investment vehicles outside of the stock, bond market



Initial results for KNR inspires expansion of new KDS venture

(INCLINE VILLAGE, Nev.) — Individuals who seek an alternative option for investing outside of the stock market are finding  the new funds now available through Klaraos viable new alternatives.  “The first new opportunity, Klaraos Neighborhood Redevelopment (KNR), emerged during the recent real estate and financial crisis that swept across Wall Street and Main Street,” said J.J. Mueller, President of Klaraos, an investment and venture management firm based in Incline Village, Nev. and Carmel, Ca.  “We were so pleased with the results of KNR that we are now launching a similar venture with lower risk parameters named Klaraos Deal Support (KDS)”.

As of July, 2011, KNR, an evergreen fund, reached its capital investment cap and is only taking on new investors based on current attrition of existing investors and opened the new KDS platform.

KNR Focuses on Trust Sales and Quick Turns

Klaraos is always actively searching for opportunities and private ventures that fit into the current cycle of the economy. The management team of Klaraos spent much of 2009 evaluating different entry vehicles into distressed residential real estate for its clients and investors.  A client introduced the management team to an individual in the Sacramento, Ca., area that was already investing in distressed real estate, through Trustee Sales; after various meetings over several months, KNR was born. With the success of KNR, it now covers more than the Sacramento area and now reaches down into the central valley of California.

According to Klaraos, the first venture ran parallel with the company’s passion and commitment to look for investments that yield returns that are in sync with the current cycle of the economy. In this case, that in sync portion allows KNR to rely on asset destruction for the critical component of its return generation. KNR purchases homes out of trustee sales that fit into a discipline that returns profits and capital to investors while it minimizes potential downside volatility.

Klaraos Launches KDS Concept, Targets Investors Purchasing Distressed Real Estate

Although similar to its strategy within KNR to make a profit and quickly return capital to the fund, the Klaraos Deal Support (KDS) fund is an entity that is in the business of providing working capital and the KDS group is looking for opportunities to do so. Essentially, they will be pursuing a similar end methodology as to what they were doing in KNR, except with KNR, they were the operators. According to Klaraos, with KDS they will have some operational oversight yet will primarily be the providers of liquidity – relying on others to provide the operational know-how while they reduce risk to their investors through loan to purchase ratios of around 70%.

To date, Klaraos has purchased over 100 homes and will have sold over 75 homes within a couple of months. They feel that these results give them a good leg to stand on as far as providing a track record and trust for the company’s current methodology.  Lastly, and what was noted as the most important point:  in the process of putting this fund together, Klaraos has structured the KDS fund so that if there are any losses taken on the house that the loss will be taken out of the equity before it touches their investors’ capital.

As a rule, Klaraos likes to carry more cash in their clients’ portfolios than most shops do so they built this fund to allow for short term and long term placement of capital.  “The market is too volatile for our discipline right now to allow us to enter into short or long term investments,” noted Mueller.  Because they already have equity built into the homes, this will add a layer of protection against risk, both physically and mentally. 

Is This The Wave of the Future?

When asked if the financial strategies of KNR and KDS are new trends in the investment industry, the staff at Klaraos shared their personal insight.  They feel savvy investors will always exploit profit opportunities where they exist especially in American Capitalism which is much more akin to the circle of life.  What is unique about these investments is the approach Klaraos uses to actively cycle through funds. They provide options that are in sync with the business cycle and don’t like to operate with the wind at their back … pursuing the same old trend or the newest fad.  The company follows a discipline that ingrains business cycle methodology in investment placement.

As individuals continue to watch Wall Street, which is an integral component of Kalaros’ investment and venture management services, the company is comfortable with the KNR and KDS fund options today. In a final recap, team members at Klaraos noted that some investors understand real estate and how it works and can see a tangible asset at work.

In addition, outside of the investing platform, KNR seems to be providing a good service to the communities where they are purchasing and selling these homes.  Many homes are in disrepair and become an eye sore on the community prior to the company taking ownership. Klaraos, through their KNR program, is selling homes to families and non-investors thus creating new homeowners in communities.

For more information about Klaraos, visit www.klaraos.com or call 775-831-5546.


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