What is an accredited investor
Based on Securities and Exchange Commission (SEC) regulations, an accredited investor meets these requirements:
1. Have an annual income of $200,000, or $300,000 for joint income, for each of the last two years, with expectations of earning the same or higher income this year.
2. Have a net worth exceeding $1 million, not counting your primary home
What is the minimum investment?
While the minimum investment can vary, the typical minimum is $50,000.
How long should I plan to have my money invested?
Most projects plan for a 5-year hold, so you should plan to have your money in the investment for at least 5 years. During this time, you will receive regular cashflow returns, but your initial investment cannot be withdrawn.
What returns should I expect on my investment?
Returns vary by asset and investment, however, in most projects, cash on cash returns are paid out monthly or quarterly throughout the investment. Then, you will also receive a portion of the profits from the sale of the asset at the end of the project.
What are the risks?
Commercial real estate assets tend to fare better than the stock market in economic downturns, because more people tend to downsize. They are also less risky than investments in single family homes, because if one tenant moves out, you still have the others to pay the expenses
How do I invest?
Our sponsors are always looking for new deals, and when they find them, they jump on them, so things move quickly. It’s best to be on our mailing list so you can learn about deals and be ready to invest when opportunities present themselves.
How will this affect my taxes?
The IRS allows investors in real estate investment property to expense a portion of the purchase price and capital improvements made to the property through depreciation expense. I am not a tax advisor or CPA, but often my depreciation on my real estate investments have reduced taxable investment income to less than the cash flow income I made during the year.
When the property is sold, investors are generally taxed at a lower capital gains tax rate. Often there is an opportunity to 1031 exchange into another property and further defer taxes, if that meets your investment goals.
Do I have have to deal with tenants?
The sponsors, the General Partners, find the deal, acquire the property, and hire experienced, local property management to operate the day to day. The investor is a limited partner, and a passive investor, therefore not active in the management of the operations.