• Identify apartment complexes suitable for conversion to condominiums and completes the condominium conversion process creating individual parcels for each unit;
• The units are purchased by investors seeking to place their 1031 and non-1031 funds while earning a return;
• Please note that this is not a TIC - each investor has complete ownership (deed and title) of their specific units;
• Leases the property back from the investor, paying the investor a 10-11% return on the purchase price whether the unit is vacant or subleased (the investor can choose different payment alternatives to suit their tax or income needs);
• Option to purchase the property back from the investor within 60 months (typical repurchase time is within ~2-3 years);
• Exercises the option to purchase the property from the investor, and sells the property to an owner occupants;
• The investor can then either reinvest the funds into another project, or perform a 1031 exchange into some other property

 Our affiliate has been successfully performing condo conversions for 16 years, and has always exercised its option to repurchase from the investors.  In our 16 year history, we have completed every project, sold every unit, made every payment on-time and returned the principal investment to every investor/lender.  Our affiliate has over 62 projects on their resume.  Clients are so pleased with this arrangement, that 98% of them reinvest their funds in another project after their units are sold.

Q:  Can you furnish references?

A.   Yes, if you are considering investing in this program, we will furnish references.

Q.   Can out of state investors use this program?

A.   Yes, many out of state investors are now in the program.

Q.   What is the minimum investment?

A.   An investor must purchase at least one condo unit. These vary in price, but usually range from $58,000 to $104,000. 

Q.   Instead of an option to buy back the property, could the developer give me a guarantee to buy it back?

A.   Yes, however, if you have the buy-back guarantee written in the original paper work, it may not pass the IRS guidelines for 1031 exchanges. In this program, never once has developer not exercised his option to repurchase the property as he makes no money until he does so! If you are not using a 1031 exchange coming into this investment and do not intend to use a 1031 going out of this investment, the contract may be written with a guaranteed buyback.

Q.   Do I need to have the property inspected?

A.   No, as you will not be fixing it up, renting it, etc. You are purchasing the property “as is” and selling it back to developer without you doing ANYTHING to the property.  Since the lease with developer is a triple net lease, developer is responsible for making necessary repairs and any other conceivable expenses that are associated with the property.

Q.   If I decide to go ahead with this investment after doing my due diligence, how long does it take to close?

A.   Cash transactions range from 5-12 days and financing transactions are 30-60 days.

Q.   If I choose to have the lease structured so that I am not taking out any money, other than the amount needed to make the payments on the loan, if leveraged, and then find out that my needs have changed, can I restructure the lease at a later time to take out the maximum cash flow?

A.   Yes, however, the change of the lease is not retroactive.

Q.   If I choose to leverage my investment which requires me to get a loan, can I use my bank?

A.   Yes, however, for this investment, developer requires that you fill out an application with a local bank that has done many of these loans. There is no risk or cost for you to do this. In this way, if your bank is not able to do the loan, their bank will.

Q.   If I leverage this investment and use the developer-recommended bank, are the loan rates and fees competitive?

A.   Yes.  Since the developer refers many investors to their lending sources, the lenders value the relationship with both the developer and the potential investor.  They are familiar with the properties and the process associated with this investment program.  The lender offers the lowest possible rates and fees in order to earn the trust of the developer and the business form the Investor.  

Q.  How is this investment different from a TIC investment?

A.  There are several fundamental differences between our affiliates offerings and TIC offerings:

1. Offers fee simple ownership while TICs offer securitized, fractionalized ownership
2. TICs do not have a defined exit strategy while our affiliate offers a proven exit strategy (2-3 year buyback)
3. Most TICs only work with accredited investors while our affiliate works with both accredited and non-accredited investors
4. TICs offer real estate with at least 13% mark-up over the market value of the project to cover the fees while our affiliate sells at below-market values and no fees to the investor.
5. TICs provide cash flow based on the project’s NOI while our affiliate’s investors are receiving contractual returns regardless of vacancies and expenses
6. TICs pay commissions based on the equity investment while our affiliate compensates agents and brokers based on the entire purchase price
7. TICs pay commission only to securities licensed agents, our affiliate pays a real estate commission to licensed real estate agents
8. We offer low minimum investments for investor (starting at $58,000) while TICs require $250,000-450,000 as a minimum
9. TICs require a certain LTV ratio (typically 50-60%) forcing investors to have debt, while we work with cash, IRAs and various LTVs to fit the investor’s needs