4 PROVEN STEPS
Relequity is committed to taking the complexity out of multi-family real estate investing. We have a comprehensive four-step system that simplifies the investment process for busy professionals.
We research and identify the commercial real estate assets that best meet our criteria in growth markets, with risk-adjusted returns and portfolio diversification.
When we find the right property, we provide you a detailed deal packet. You make the decision to invest in the partnership and we pool all funds together with mortgage debt to close the deal.
We provide monthly updates, quarterly distributions and annual K-1 tax forms. Any property event like a refinance or sale will result in a distribution that aligns with your share of the property.
Select a category below to see the most frequently asked questions from previous clients.
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BEING AN INVESTOR
What is an "accredited investor"?
The benchmark for being an accredited or sophisticated investor is set by the SEC. An accredited investor is someone who meets one of the three criteria: a) earned an income of $200,000 in the last two years and expect to make the same this year, b) earned an income of $300,000 filing jointly in the last two years, or c) have a net worth of $1,000,000, not including their primary residence. If someone does not meet the accredited investor criteria, they are considered non-accredited.
Sophisticated investors must “have enough knowledge and experience in business matters to evaluate the risks and merits of an investment.”
Do you accept non-accredited, sophisticated investors?
We do generally accept sophisticated investors, but each deal is different. Some deals are reserved for accredited investors only. We will clearly communicate if a deal is open to sophisticated investors.
What is a preferred return?
A preferred return is a hurdle that must be met before the General Partners receive their share of profits. For example, if a deal has a 6% preferred return hurdle, investors must receive a 6% return on their investment, before General Partners receive any shares of profits.
Will I receive tax benefits?
Yes, the profits and losses will be passed through to investors. Commercial real estate can be depreciated at a faster pace than residential and this depreciation often creates a “paper loss” for investors. This “loss” can be used against other qualifying gains, but please consult with your CPA.
How do I know if I am a sophisticated investor or an accredited investor?
Generally speaking, sophisticated investors must have sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment. To qualify as an accredited investor, at a minimum you must have 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).
What is the typical deal structure?
When we acquire a new property, we will create a new LLC with share classes for Limited Partners (investors) and General Partners (us).
We structure the deal with a split of equity, after a preferred return. Typically, the preferred return is 6-8%. After the preferred return is met, the equity split is 70-75% to investors and 25-30% to general partners. The specific split will be laid out in the deal.
What is multi-family real estate?
Basically, a multi family property is a residential building with more than one housing unit. Multi family real estate can accommodate multiple tenants, each having their own rental unit with its own kitchen, living room, bedroom, and bathroom.
Are multi-family properties a good investment?
The overall consensus for 2019 is that multi family properties are going to continue to be a great investment. The security and tax advantages that come with investing in multi family homes is what has always captured the attention of investors. But in 2020, real estate investors need to act now.
What should I look for when buying a multi-family property?
Of course, this is something that Relequity takes care of for you. However, before buying a multifamily, find out the current income of the property. Make sure that your income is higher than your monthly costs, which should include your mortgage payments, taxes, utilities, property management, and maintenance such as repairs, lawn care, and snow removal.
What is the minimum investment?
The minimum investment ranges from $25,000 to $100,000, but $50,000 is the norm for most deals.
What is the Relequity typical hold period?
We plan to hold most assets between 5-7 years. We will explore selling as early as Year 2, but investors should plan on being in a deal a minimum of 5 years.
What markets does Relequity focus on?
We focus on stable and growing markets in Colorado, Arizona, and other Sunbelt States. In addition, we partner with select operators to share opportunities in markets like Texas, Florida, Utah, and Nevada.
How often will Relequity send updates?
When we have an investment opportunity, we will send an email with key info on the deal and the next steps. From there, we will set up a webinar to discuss and seek soft commitments from investors.
How often does Relequity make distributions?
Profit distributions will vary by deal, but we seek to make distributions quarterly. Some deals will have monthly distributions.
Passive Investing In Apartments
Interest deductions and depreciation acceleration shield a portion of the positive cash flow generated,
Income producing real estate investments have historically delivered appreciation in value that exceeds other investment types.
Multifamily real estate is a physical asset that maintains its constant appeal even in the midst of global crises.
Apartment investing adds value to existing structures as opposed to building on raw land.
Hedge Against Economic Volatility
Historically, multifamily investment properties have demonstrated less risk and volatility than stocks and bonds