As a partner in the LLC that purchases the properties, you will receive a K-1. A K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income. Partnerships are generally not subject to federal or state income tax, but instead issue a K-1 to each investor to report his or her share of the partnership’s income, gains, losses, deductions and credits. The K-1s are provided to investors on an annual basis so that each investor can include K-1 amounts on his or her tax return.

An accredited investor, in the context of a natural person, includes anyone who:

• Earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR

• Has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:

• Any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or

• Any entity in which all of the equity owners are accredited investors.

In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.

Distributions are planned quarterly.

A Sophisticated Investor doesn’t meet the requirements of an Accredited Investor but they have investor experience. This could mean the person believes they have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.

Investor funds are used for the total acquisition cost of the property. This includes, but is not limited to, the down payment for the actual purchase of the property, acquisition fees, legal and transaction costs, capital improvements, and reserves.

Absolutely! Investors are allowed to visit the property before investing and during the life of the project. If you provide sufficient notice, we will personally be there to show you around and answer any questions.

We use a syndication model for raising capital with a typical GP (General Partner) and LP (Limited Partner) structure of 30/70. We use our team of GPs to find and structure deals, manage the property and implement our business plan. We communicate with investors, and handle the disposition of the property at the end of our business cycle.

Our Limited Partners are passive investors in our deals. Accredited Investors are individuals that make $200,000 individually or $300,000 married with $1,000,000 in assets not including their home. Sophisticated Investors that do not meet the accredited level of income or assets but do have investment experience and have the means to invest. We typically have investors that contribute a minimum of $100,000 to our deals.

Our GP team identifies the property and completes the underwriting and due diligence. We set up the acquisition and structure the debt, as well as setup all of the SEC filings and paperwork. We manage the asset and implement the business plan throughout the hold, we manage the investor relations which includes payments and reports to our investors. We also handle to disposition of the property upon completion of our business plan.

We focus on value add opportunities in emerging markets that allow for on site property management and maintenance staff. Those opportunities typically involve 50-500 units, with properties in the C- to B- asset class in B areas. We focus on improving the property to a B+ for our tenants and the communities that we invest in.

We look for emerging markets with 2% YoY job growth, favorable market indicators like rental demand/occupancy rates, household formations of 2% YoY, positive trends of population growth for the previous 5 years and expected population growth for the following 5 years, and safe area. Attractive emerging markets with stable job growth, population growth, and high rental demand/low vacancy rates will lower or risk and allow us to elevate an asset and improve the tenant experience and add to the community it is located in.

We characterize emerging markets as desirable areas with steady new household formations and population growth. Jobs are being created, property values for single family homes are increasing and rents are rising. Local governments are dedicated to attracting companies and the job market is expanding. The market is starting to absorb the supply of multifamily housing in that area.  

Through extensive research, we analyze multiple indicators to identify emerging markets in the U.S. We begin by conduction an analysis of job growth, population growth, and economic indicators of growth. We utilize “Path of Progress” reports, information from local governments, Chamber Of Commerce reports and reports from Multifamily Research Groups dedicated to providing industry insights for builders, owners and investment groups like us.

We target emerging markets with C- to B- assets in B, B+, A areas while avoiding D area, we feel this allows us to mitigate risk for investors but still provide profitable opportunities. This strategy of C- to B- assets in emerging markets within B, B+ to A areas allows us to appreciate properties and provide our investors with cash flow via value adds through out the deal. It gives us the opportunity to return the initial investment at the end of our business plan and move our investors into future deals allowing them to multiply, scale and grow a wealth portfolio along side us.

Value add opportunities of C- to B- assets that we feel can maximize cash flow and generate equity upon disposition of our deals are typically in the 1980’s-2000’s vintage. We look for garden style, mid rise, with pitched roofs. We target properties with 85%-90% occupancy. This allows us to renovate units and bring them up to our new standards and stabilize the property for maximum profitability.

Our investment goals consist of cash flow for our investors as well as appreciation/equity payout upon the disposition of the deal. We target assets that can produce a cash on cash return of 9%, an IRR of 15%-20%, with a DSCR of 1.5% and Cap rate of 6%. Our goal is to return your investment at the end of our deal and help you reinvest with us into future deals to help multiply and grow your wealth.

Our underwriting and due diligence with clear parameters and thorough research of each market allows us to make the best decisions and pick the best assets to execute our business plan. We utilize our knowledge and experience coupled with verifiable conservative underwriting to mitigate investor risk. We identify opportunities in emerging markets and execute a business plan to bring our asset up to market rents for that market. We accomplish this with unit renovations, common area improvements, additions like dog parks or playgrounds, we add covered parking, we reduce expenses, implement RUBS programs, and tenant retention programs. All allowing us to improve the tenant experience and increase the value of our investment.