Frequently Asked Questions
What is a passive real estate investment?
A passive real estate investment refers to an investment in real estate where the investor is not involved in the day-to-day operations of the property. In a passive real estate investment, the investor typically contributes some of the funding towards the purchase, renovation, and/or development of a large property – such as an apartment complex or self-storage facility – that is managed by a professional real estate manager. In return, investors receive equity in the property and a share of the profits generated by the property.
What are some of the benefits of passively investing in real estate?
Some of the benefits may include: ownership, cash flow, tax benefits, appreciation, leverage and loan paydown, hedging against inflation, and scaling up as a team.
Can I invest with a retirement account (IRA, 401k, etc.)?
Yes. You can invest in real estate with certain retirement accounts. We are happy to discuss how to boost your retirement returns with real estate investing.
What are the projected returns?
We target projects that have an average internal rate of return in the 15% range. This usually equates to a 6-8% cash-on-cash return in early years, and higher returns if/when there is a refinance or sale. Actual returns vary on a property by property basis.
What is the typical hold period?
We generally aim to implement our value add plan within the first two years and then will assess a refinance to return a portion of the initial capital investment. We aim to produce long term passive income, so we do not anticipate selling a project for at least five years.
What is the minimum investment?
Minimums vary from project to project but generally are set at $50,000.
When will I get paid?
Most distributions are made quarterly.
How will you communicate with me?
We will provide quarterly email updates on the project’s progress, including renovation status/photos, and an update on income and expenses. We will also post financials on a quarterly basis. Finally, you will receive a K-1 statement from us during tax prep season that you may provide to your accountant.