- Passive investment – Completely hands-off. No tenants, toilets or trash to deal with.
- Reduced risk
– Experience: You get to leverage the experience of our seasoned team instead of trying to do it yourself and making big mistakes
– Securities & Exchange Commission (SEC) Compliance: The Offering and LLC documents are drafted by Securities & Exchange Commission (SEC) attorney and the investment is registered w/ the SEC for any investments since 2022.
– Bad Actor Sponsor Background Checks: The primary sponsors go through bad actor background checks conducted by a SEC attorney.
– Verifiable: These transactions are verifiable. You can visit the county’s real estate tax assessor website to see if a given property was transacted upon or you can personally drive by the property if you wish.
– Always Paid First: Investor preferred return (on-going while property is held) and Investor capital (in the event of a sale) is always paid first prior to the sponsors getting paid
– Investors are not personally liable for the Property Mortgage: Investors do not personally sign off on any loans, which means that banks cannot come after your personal assets in a scenario where there is mortgage default, which is not the case when you are buying your own home or rental property.
– Diversification: Commercial real estate investments have lower risk compared to a single family house or townhome: if a tenant in a single family home or townhome moves out, you are 100% liable for the mortgage until you find the next tenant. In comparison, if 10 tenants move out in a given month in a 100-unit apartment community, the property can still afford to pay the mortgage
– Reserves: All investments maintain healthy reserves for a rainy day so that they reduce the likelihood of doing a capital call back to the investors
– Insurance: Properties carry property insurance in case of any calamities
– Multiple Exit Strategies: Most of these investments have multiple exit strategies so that the syndicator is not forced to sell during down market cycles
– Tangible asset: Your investment is tied to a physical asset which is unlikely diminish drastically in value unlike stocks which can go to zero.
- Superior returns
You get superior returns in Commercial Real estate as the investments use:
– leverage (bank mortgage)
– tenant’s money (rent)
– Government incentives (generous tax advantages)
– Forced appreciation (through property improvements and efficiencies)
– Natural market appreciation
- Economies of Scale – Everything from property management to repairs to materials is cheaper at scale. For example, property management fee for a single family home or townhome is typically 8-12%, where as it is generally between 3 -5% for larger commercial properties
- No Credit Required – Your personal credit is not tied up. You don’t need to worry about qualifying for a loan and debt to income ratios and you are not personally liable for the loan (the bank can’t come after your personal assets).
- Diversification – You can get diversification outside of paper assets such as stocks, bonds and cryptocurrency. Investors also experience diversification across multiple geographies, tenant types, real estate asset types, and operators.
- Different Funding Source options – You can invest from cash accounts or retirement accounts (by transferring to a Traditional or Roth self-directed IRA or Solo 401k).
- Tax advantages – You get all the tax advantages of owning real estate such as depreciation, Mortgage Interest Deduction, real estate taxes, cash out refinances without tax liability, long-term capital gains tax rate.
- Institutional class opportunities – You get an opportunity to invest in professionally run institutional class assets which used to only be available to multi-millionaires and billionaires in the past.
- Access to different Commercial Real estate asset classes: You will have an opportunity to invest in Apartment communities, hotels, and other asset classes.