NO, as with most investments, there are no guarantees. In the Private Placement Memorandum, we explain that it’s possible to lose the entire investment under highly unusual circumstances.

This is determined by the specific property and improvement plan specified in each property offering. Typically, we intend to hold properties between 3-7 years.

Each property has an anticipated rate of return and a proposed exit strategy. For example, our approach may be to hold a property for four years OR until we hit a specific appreciation hurdle, perhaps +40%. The first of these two factors that occur will cause us to sell the property and pay off our investors.

Yes, we welcome introductions to your family and friends. But remember, we make it a point to get to know each investor and make sure they know us before we invite them to invest. We learn about several pocket listings before they are shared with other investors. At any given time, we are underwriting/evaluating 3-5 properties that we have received from our strong relationships with brokers.

The benefit of our type of investment is for you to become very knowledgeable about the risks before you invest. We let you see documentation on the profit history of the specific asset you will be investing in, the current issues, how we intend to resolve them, the specific plan, and the anticipated returns. We provide a Private Placement Memorandum, Operating Agreement, and Subscription Booklet along with the latest 12-month Trailing Profit & Loss, Rent Rolls, Property Brochure, Due Diligence Reports, Lease Audit reports, Executed Sales Contract, and more.

We hire experienced legal counsel specializing in securities law to help us draft the appropriate documents. We hire experienced commercial real estate counsel to review our loan documents, purchase and sale agreements, and property transaction documents and handle our closings.

Of course, the property is covered by insurance to mitigate physical damage and liability risks. We also ensure the property for loss of rent during rebuilding and carry a total replacement cost with an Umbrella Policy on each property.

To lose all of your investment, something drastic would have to occur that would lead to foreclosure. All of the tenants would have to move out due to an undiscovered hazard, or an environmental hazard could destroy the property if the insurer fails to pay for the extent of the loss, or US financial markets crash, with no refinancing available when a loan is coming due. We perceive this risk to be small because we buy at reasonable rates, without overleveraging, and further increase value by enhancing the property and growing income.

We utilize experienced property management companies with extensive experience operating in the cities where we invest. We visit all of our properties regularly and unannounced to ensure our properties are appropriately managed. We take immediate actions and strategize to reverse any negative trends.

The only way to get a completely risk-free investment is to choose a treasury bond…with its minimal level of return.