Frequently Asked Questions
Multifamily properties are like small businesses that produce cash flow. This allows your money to work for you and earn money each quarter.
As the property produces cash flow for you, it also pays down the loan used to purchase it.
There are also tax benefits in the form of write offs & depreciation.
When you invest in multifamily property, you own part of a tangible asset as opposed to investments such as stocks where you don’t.
While other investments such as stocks can produce cash flow in the form of dividends, the value of the stocks are variable and can suffer from volatile market swings, even if the fundamentals of the company are solid. Bonds, on the other hand, can be a safe investment but the lack of risk is reflected in the return you make. Most Bonds rate of return is around 1% whereas multifamily property is around 9%.
ACG buys in areas with high demand for multifamily housing. We determine this by analyzing the number of apartments in an area compared to the availability of jobs.
We also look for areas with low unemployment, positive population growth and especially diversified job growth-the focus is on cities where large company relocations will not cause a major void in jobs, and consequently, renters.
We have relationships with commercial brokers. These brokers find potential sellers and match them with buyers like us. We also seek out ‘off market’ sellers and negotiate purchases directly.
Mentors. We often add experienced multifamily investors to the general partnership.
Property management. We recruit the best; those who know the area well and have proven track records of managing multifamily properties.
Securities lawyer. We have a lawyer who specializes in these types of property purchases and syndications to protect us all in the unlikely event of something going wrong.
The bank. We have developed relationships with banks that are willing to loan us the money to make these deals. They always check our numbers thoroughly and will not loan us money if they do not think the deal checks out.
The General Partners are the people who find the property, secure the loan and manage the property. This is not a passive role and involves continuous due-diligence. The GP owns 30% of the property and profits.
Yes. All members of the team are monetarily invested in the profitable projects. As GPs, we are there with you in the LP pool- Our success is your success!
Yes. Finding the deal, underwriting, arranging the bank loan, performing the property due diligence, visiting the site, putting together the legal paperwork and closing the deal takes a lot of work. For that, the GP is paid an acquisition fee at closing, usually 1% – 2% of the purchase price.
We ride it out, while earning cash flow. We are always careful to select bank loans with terms of 10 years minimum so we do not have the potential for loan maturation in an economic downturn.
You as the investor are the owner, determined by the percentage of your investment. The properties are purchased under a new LLC company that we form for the specific purpose of owning and managing each property
The LLC is divided up into the general partners (GP) and the limited partners (LP). As an investor, you will be a limited partner (LP). As the team running the project, we are the general partner (GP).
Our objective is to hold our properties for approximately 5-7 years (although certain properties may be held for longer or shorter periods depending on the characteristics of each property and prevailing market conditions), at which point we intend to seek a “liquidity event,” such as a sale or refinancing of the property. Depending on the deal and the financial climate, we will endeavor to get at least 65% of your money back to you within 5 years. After this, you still have an investment that produces monthly income for you. However, there is no guarantee that we will be able to successfully pursue a liquidity event with respect to any of our properties. Market conditions may delay or even prevent the Manager from pursuing liquidity events. If we do not or cannot liquidate our real estate portfolio, or if we experience delays due to market conditions, this could delay Investors’ ability to receive a return of their investment indefinitely and may even result in losses, notwithstanding the provisions of the LLC Agreement.
This is a long term play.
Investing with us involves investing money for 5 – 10 years
Anyone 18 or older can invest, although you must be an accredited or sophisticated investor. For more information visitAnyone 18 or older can invest, although you must be an accredited or sophisticated investor. For more information visit www.sec.gov
As an investor you will be in this group. This means that, once invested you do not have to do any work. You will be a completely passive investor.
The limited partnership owns 70% of the property and profits. Your individual ownership will depend on how much you invest with us.
Our investors typically use one of the following strategies:
Cash investment
Home equity line of credit (HELOC)
Self-directed IRA
A typical deal will need a 25% down payment of the purchase price. In addition, we may need extra funds to pay for renovations, maintenance, etc. Your investment, along with the investments of others and our own, are pooled together to pay for this.
Yes, however that number can very deal by deal. Normally, the minimum amount you can invest will be between $25,000-$100,000 with the option to buy one or all shares.
Yes, you can expect to receive periodic updates about the property, its financial condition, and other matters. We will provide updates via email.
No. Guaranteeing a return on an investment is actually against the law. We underwrite our deals conservatively in order to try and be sure that our deals perform to expectations. With that said, ACG continuously researches to ensure up to date market data. We know that if our deals do not perform for our investors, our business will not succeed. We put our investors and the residents first.
There is risk in every investment but we believe that our conservative analysis will see us through even in a downturn. Your investment and your returns will take a priority over our returns. If you get paid and we do not, so be it.
No, your total loss cannot exceed the amount you invest.
As a limited partner you will be kept abreast of all important financial and management decisions. you will not have a right to vote or otherwise participate in managing the investment, except on limited matters. Instead, the Manager will make all decisions, including investment choice. Investors will have the right to remove the management team in very limited circumstances.
We make distributions quarterly, if we have profits to distribute. Usually the distributions will begin after a 6-month repositioning period.
We will make distributions by depositing money directly into your bank account as so-called ACH transfers.
We analyze, or underwrite, the deal based off the vacancy being at a conservative 8-10% for 10 years into the future. For year 1, we bump it up to 10% to allow for potential tenant move-outs as the rents are raised and property is being repositioned..
We think so. We try to create safe, thriving communities where tenants will not only stay, but also refer their friends and relatives. It’s good for business, but also good for people.
We are not looking for any investor. . We want a partner interested in making a positive difference in the communities we invest in while profiting handsomely. We believe that making a difference in the communities we invest in will positively impact our bottom line more than taking a passive role. We don’t only want good business deals, we want to help build America.