As a partner in the LLC that purchases the properties, you will receive a K-1. A K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income. Partnerships are generally not subject to federal or state income tax, but instead issue a K-1 to each investor to report his or her share of the partnership’s income, gains, losses, deductions and credits. The K-1s are provided to investors on an annual basis so that each investor can include K-1 amounts on his or her tax return.
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.
Distributions are planned quarterly.
Each asset is typically held 3-5 years depending on its exact business plan. Your capital would remain in the asset within the same time period unless the business plan provides an earlier planned exit.
Apartments offer certain advantages over single family homes such as economies of scale and greater cash flow potential. Additionally, the more rental units you have in one location or under one roof, the less risk you have.
No, American Capital Venture Group And Strategic Partners will handle all day-to-day activity and you will not have any management responsibilities.
Specializing in multi-family investments in Kansas City. Invest with us today!
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