Although our Fractional Ownership program varies from project to project, the underlying structure remains the same. Generally, a limited liability corporation TIC is established for acquiring or refinancing after 12 months, with the proceeds used to purchase another property like kind until the LLC owns a minimum of four like kind properties. Per the LLC Tenants in Common, individual investors are eligible to own an undivided fractional interest in the entire property. Under this co-ownership structure, the investor shares in the net income, tax shelters, and growth. By purchasing real estate through our Tenant in Common program, you can gain superior efficiencies in the identification, acquisition, financing, closing, and operating stages of property ownership.
Benefits of Investing with the Fractional Ownership Program
- Your annual cash flow is tax-sheltered via depreciation pass-through and interest deductions. You can also potentially share in the appreciation of the property when it is refinanced.
- With minimum equity requirements as low as $50,000, it's easier than ever to purchase high-quality property. These low minimums also allow you to diversify by acquiring different types of properties in various locations and industries.
- Securing ownership as a Tenant In Common can potentially increase your net cash flow, provide you with substantial tax write-offs, and earn appreciation in real estate assets, without the time commitments of active property management.
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Why should you invest in multi-family properties in the United States? The primary advantage is the value of the GBP and the Euro. Secondly, you'll benefit from the methods we use to acquire properties.
When purchasing a multi-family property, it will be assigned a "cap rate". The cap rate can be calculated by dividing the Net Operating Income (NOI) by the asking price. In other cases, it can be the rate that commercial appraisers use for a particular market area based on all sales of like kind property. The difference between these two numbers allows us to purchase properties at below their appraised values. After 12 months, we can then refinance the property, using the equity to purchase a new property and to provide a tax-free dividend to investors.
See the below examples of how these numbers work.
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| Cedar Garden - 46 Units
Dallas, TX
Price: $1,145,000
Purchase: $1,090,000
NOI: $141,848
Cap Rate: 13.01%
Market Cap Rate: 8.01%
Actual Value: $1,770,000
After 12 months from date of purchase, the property is refinanced for $1,325,000. Investor's money will be cashed out and reinvested in another property, and the investors will receive a tax-free dividend of $180,000 for a first-year return of 16.5%. Their investment has increased by 46%.
With the original investment used to purchase another property, at the end of five years the investor can receive a full ROI and still own a stake in four multi-family properties valued between $4,500,000 and $7,000,000. (For more details, you can request a prospectus.)
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| The Commodore - 44 Units
Syracuse, NY
Price: $1,300,000
Purchase: $1,186,000
NOI: $130,542
Cap Rate: 11.00%
Market Cap Rate: 6.81%
Actual Value: $1,916,000
After 12 months from date of purchase, the property is refinanced for $1,400,000. Investor's money will be cashed out and reinvested in another property, and they will receive a tax-free dividend of $165,000 for a first-year return of 13.9%. Their investment has increased by 45%.
With the original investment used to purchase another property, at the end of five years the investor can receive a full return and still own a stake in four multi-family properties valued between $5,000,000 and $8,000,000. (For more details, please request a prospectus.)
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