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FAQs
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General:
Rule 506(b) appeals to investors interested in more exclusive, private investment opportunities. These aren’t publicly advertised, creating a sort of “insider” feel. While it primarily caters to wealthy, accredited investors, it also opens the door for a select few non-accredited investors, provided they have enough financial savvy. The key here is that these non-accredited investors don’t need to prove their financial health to invest.
Rule 506(c) offerings, on the other hand, are out in the open, advertised through various public means, aiming to attract accredited investors. The catch is that these investors need to officially prove they meet the financial criteria set for accredited investors. This rule taps into the power of public advertising to draw in funds but maintains a high threshold for participation to ensure investors are capable of handling the risk.
In essence, these rules structure how private investments can be made and who can make them, balancing investor protection with access to capital for businesses.
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.
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.
You don’t have to be an accredited investor to register with us. Nonetheless, some investment opportunities will be exclusively available to accredited investors.
Yes, our investment opportunities are passive.
We participate in a diverse range of investment vehicles, but the bulk of our portfolio is concentrated on real assets, notably Multifamily properties and Triple Net Leases.
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.
Investing in alternative assets such as Multifamily properties and Triple Net Leases provides steady income, growth potential, inflation hedge, portfolio diversification, and tax advantages, offering stable and long-term returns. Our opportunities undergo rigorous vetting. to ensure they meet the highest standards of quality and potential for profitability. This meticulous selection process is designed to safeguard your investment and maximize returns by focusing only on premier opportunities in the market.
To tailor an approach that aligns with your unique financial situation and objectives, we recommend starting with a conversation. By booking a call, we’ll have the opportunity to learn more about you and your investment goals. Following this, we’ll share insights on how our strategy might complement yours. Remember, this initial consultation is free and doesn’t obligate you to make any investment.
Each investment opportunity varies. Generally, investors receive payments from the deal’s cash flow on a quarterly or monthly basis.
Investment-Related
Investing in multifamily properties, triple net leases, and corporate participation each offers unique rewards and carries specific risks. Multifamily properties can provide steady rental income and tax benefits but come with the challenges of property management and market variability. Triple net leases offer predictable income, though they risk tenant defaults and fixed rents that may not match market inflation. Corporate investments, such as stocks, bonds, or REITs, provide opportunities for high returns and market liquidity, but they’re subject to market volatility and potential financial distress of the companies. Balancing these investments can diversify a portfolio, spreading out risks while tapping into different sources of potential returns.
It’s important, however, to seek advice from a Certified Public Accountant (CPA) to understand how these factors apply to your unique financial circumstances.
A preferred return, frequently referred to as “pref,” represents a priority claim on profits allocated to preferred investors within a project. These investors are positioned to receive the initial disbursements of returns, typically ranging from 6% to 8%. After reaching this predetermined profit threshold, any additional profits are distributed among the remaining investors according to previously agreed-upon terms. Preferred returns are predominantly utilized in the realm of real estate investments.
The duration of our investment opportunities varies, but most are structured with a 5-year holding period. However, we remain open to selling earlier if we reach our targeted outcomes ahead of schedule.
It’s important, however, to seek advice from a Certified Public Accountant (CPA) to understand how these factors apply to your unique financial circumstances.
We participate in a diverse range of investment vehicles, but the bulk of our portfolio is concentrated on real assets, notably Multifamily properties and Triple Net Leases.
Typically, the minimum investment into one of our deals is $50,000.
For example, if you invest cash into a property and receive cash flows from rental income after expenses, the cash on cash return measures how much cash income you’re generating compared to your initial cash investment. This is particularly useful for investors to assess the income-producing potential of an investment, separate from appreciation, financing structures, or tax implications. It’s a straightforward way to understand the immediate yield from cash investments in alternative assets.
Bonus depreciation is a tax break that lets a company deduct most of the cost of new assets immediately after purchase, instead of gradually over their useful life. This can include things like machinery. Essentially, it’s a faster way to reduce taxable income by writing off expenses related to new assets in the first year. For specific guidance on how to apply this to your cash flow, it’s best to consult a Certified Public Accountant (CPA).
Loan-to-Value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. It’s calculated by dividing the amount of the loan by the value of the asset. For example, if you’re buying a property worth $100,000 and you take out a loan for $80,000, the LTV ratio is 80%. The standard benchmark is 80%, but we look for 75% or lower.
As an investor in alternative assets we offer, you’ll enjoy the tax advantages linked to property ownership, such as expedited depreciation and cost segregation, aiding in the reduction of your taxable passive income. Annually, you’ll be provided with a Schedule K-1 tax form, which outlines your share of the investment’s income and losses, to be included in your tax return.
It’s important, however, to seek advice from a Certified Public Accountant (CPA) to understand how these factors apply to your unique financial circumstances.
A K-1 loss is a share of financial loss from investments in partnerships, S corporations, or similar entities, reported on Schedule K-1. This loss can offset taxable income on an investor’s return, with certain restrictions. For example, passive activity losses might only reduce passive income, though real estate professionals may have broader offset capabilities. Consulting a tax professional is recommended for proper application and compliance.
It’s important, however, to seek advice from a Certified Public Accountant (CPA) to understand how these factors apply to your unique financial circumstances.
Investments can be made by individuals, self-directed IRAs, solo 401(k)s, qualified retirement plans, business entities, or through a mix of several account types.