Syndication is an investment vehicle where individual accredited investors are able to pool their money to buy a much larger asset than they would on their own. The investors are passive limited partners in the investment with no liability beyond their initial investment. The investment is run by a professional general partner who has broad experience in the particular asset class. In addition, the general partner handles all financing, property operations and tax reporting. This is a great way for individual investors to achieve higher risk adjusted returns, with no property management headaches.

Yes, our offerings are available to accredited investors only. The SEC defines an accredited investor as:

  • A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.
  • A natural person who has an individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person.

We only present opportunities that we believe will achieve an internal rate of return (IRR) of at least 15% during the hold period.
In simple terms, the IRR is an annual return metric that takes into account all cash flows including profit on sale over the life of the investment.

The short, easy answer is no. Your investment will be tied up until there is a capital event – either a sale or refinancing. In most cases, the average hold period is 5 years although that will depend on the particular asset and market conditions at the time of disposition.

The Private Placement Memorandum is required by the SEC and describes the offering, risks, includes the partnership agreement, investment summary and subscription agreement. It is a lengthy legal document prepared by a syndication attorney. The subscription agreement section includes basic information as to amounts being purchased and percent ownership. The risk section highlights just about every possible risk that could happen.

We model each investment with a 5 year hold period. This provides ample time to execute our value-add plan and then cash flow for a few years while looking for an opportunistic sale. Some investor principal could be returned as early as year 2 from a refinancing event or we may want to continue to cash flow till year 7, if the market is down in year 5.

Generally the minimum is $50,000.

Typically, there is a start up period in an investment of 6-12 months where the focus is repositioning the asset, handling deferred maintenance, upgrading tenants, etc. During this period there may not be any distributions. After that, distributions are typically paid quarterly.

Upon a capital event (sale or refinancing) investors will receive their original investment and share of profits. Finally, after the final accounting is completed (3-4 months post sale), a final distribution will be made.

We’ll provide quarterly email updates on the investment’s progress including a financial status along with any issues/challenges we may be facing. We are also available for status updates via phone or zoom if you prefer.

This is somewhat complicated and dependent upon the individual investor’s situation. As a limited partner, you will benefit from your portion of the investment’s deductions for property taxes, loan interest, depreciation, etc. which will be shown on the K-1 annually.

At the time of sale, the partnership gains are treated as long-term capital gains.

Due to the complexity of taxes, we recommend that you consult with your tax advisor for a more detailed explanation of what the tax ramifications will be for you individually.

Yes – We operate on a core value of treating investors’ money as if it were our own. We invest alongside our clients in every deal.

Yes – you can invest in real estate if your retirement account is self directed.

The returns forecasted are described in the private placement memorandum (PPM) and vary from deal to deal. The most common fee is an acquisition fee based on purchase price and is paid at closing. This covers the general partner’s costs to find the deal and get it under contract. The second most common fee is the asset management fee which is compensation for holding the property manager accountable, to ensure execution of the business plan, bookkeeping, and distribution of checks and K1s. The asset management fee is aligned with the investor’s interest as it is based on the property’s revenues. Industry averages are 1-3 % for both fees.