Frequently Asked Questions

On most projects, there is a stabilization period in which there is no cash flow distributed until operations are normalized. On a typical rehab project, this period can last from 12 to 24 months. Once rents and expenses reach an acceptable level, and reserve accounts are adequate, we distribute cash flow on a quarterly basis. Each investor gets their pro-rata share of the cash flow in the form of a check with the quarterly operating statements.

Our investors have a priority return of capital for money invested in a given property investment. For example, if we purchase a given property for $5 Million with a $1 Million down payment, and we sell it for $7 Million at a later date, the first $1 Million less previous cash flows is distributed to the capital investors as a priority return of capital, and the balance is split as per the ownership percentages. What if I need my money out before we sell? You can sell your share to another third party before the building sells and we have seen this numerous times. The members have a first right of refusal to purchase the shares and the managing members must approve any outside investors. Lack of liquidity is the major downside to this investment, but we have not run into a situation yet where someone needed to liquidate and there were no buyers available.

You can sell your share to another third party before the building sells and we have seen this numerous times. The members have a first right of refusal to purchase the shares and the managing members must approve any outside investors. Lack of liquidity is the major downside to this investment, but we have not run into a situation yet where someone needed to liquidate and there were no buyers available.

They receive a 20% profits interest which is paid at the end of the investment horizon upon sale as well as 20% of the cash flow and refinance proceeds. They also take an organizing fee that ranges from transaction to transaction depending on the complexity, but it is generally around 5% of the total cost of the project. How do we determine when to sell or refinance the property? The managing members will notify the partners when they feel that it is the best opportunity to either sell or refinance a given property. All major decision making is done by the managing members. We anticipate 5-10 year holds on all properties, however it may be shorter or longer based on the state of the market.

The managing members will notify the partners when they feel that it is the best opportunity to either sell or refinance a given property. All major decision making is done by the managing members. We anticipate 5-10 year holds on all properties, however it may be shorter or longer based on the state of the market.

We are in the business of finding and creating opportunities for our investors and ourselves in investment properties. As a partnership we have the option of taking the money when we sell, and paying tax on the gain, or exchange the proceeds into another investment property and cycle through this process again. Can I 1031 exchange into your partnerships if I have sold another property? While you cannot exchange into a partnership, you can exchange as a Tenancy-in-Common (TIC) into a given investment property. Usually, our TIC partners dissolve the TIC after two tax years and become members of the LLC in which they are a partner. Who signs on the debt? The managing members sign as well as any individual investors that have exchanged into the transaction via a 1031 tax-deferred exchange (for exchanging entities only LLC managers or LP general partners sign).

While you cannot exchange into a partnership, you can exchange as a Tenancy-in-Common (TIC) into a given investment property. Usually, our TIC partners dissolve the TIC after two tax years and become members of the LLC in which they are a partner.

The managing members sign as well as any individual investors that have exchanged into the transaction via a 1031 tax-deferred exchange (for exchanging entities only LLC managers or LP general partners sign).