Address
P.O. Box 2869, Jackson, WY 83001
Frequently Asked Questions
Here’s how the SEC defines an accredited or sophisticated investor:
An accredited investor, in the context of a natural person, includes anyone who:
- earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
- has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence)
There are other categories of accredited investors, including the following, which may be relevant to you:
- any trust, with total assets in excess of $5 million, not formed specifically to purchase the subject securities, whose purchase is directed by a sophisticated person, or
- any entity in which all of the equity owners are accredited investors.
In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
YES!!! Prime Investment offers investment opportunities for accredited and sophisticated non-accredited investors. Due to SEC guidelines, we only publish Accredited investor projects to our website.
If you are non-accredited and would like to learn more about our investment projects, please fill out our investor application and we will contact you when we have non-accredited opportunities.
Absolutely! Let’s talk.
We focus on multi-family apartment buildings, one of the most recession proof segments of the Real Estate Market, particularly with the United States population continuing to grow. Even with the continued advancements in online marketing (particularly Amazon) and “work from home” which threatens the retail and office markets, people will always need to live somewhere. Within this segment, we focus on B- to C+ class multi-family properties. We believe this positions us in the segment of the market that is shielded most from the ups and downs in the economic cycles. Also, periodically when we find a great deal we provide more diversification for Investors while presenting opportunities in other Commercial Real Estate assets such as: Hotels, Strip Mall, Student Housing, Storage and Mobile parks.
We have relationships with many commercial brokers and sponsors.
This is an exciting point. Over a 5-year period it is our goal to have our properties not be more than 50-60% leveraged. While we start out with a 75%-80% leverage based on purchase price, we decrease that ratio rapidly by actively paying down the loan and by forcing appreciation of the property through value add improvements, superior management, and rent increases, leading to a 5-year loan to value ratio of no more than 60%. This conservative approach provides additional buffer from the ups and downs of the real estate market.
You will be a limitied liability owner of the property which comes with all the benefits like depreciation and cash flow, meaning the property is owned by a “Property LLC” for which that property is the only asset (reduces liability). You in turn will be a direct shareholder in this Property LLC so in essence you are part owner of the company that owns the property. This allows for a direct flow-through of cash flow, depreciation, and allows you upon sale of the asset to realize long term capital gains.
Yes, investing in multifamily in a structure like ours is perfect for retirement plan investing because your involvement is by definition passive. All you need to do, if you haven’t already, is set up a SELF-DIRECTED IRA with an independent custodian, like New Direction Trust Company, Directed IRA, Specialized IRA Services, or Vantage IRA, and once that is done you can invest using your IRA/401K/ROTH-IRA or several other self-directed retirement account forms.
All our investment and Private Placement Memorandums are based on individual properties, and every property is different and will therefore offer different returns. Our returns typically consist of two parts:
Preferred Return from Cash Flow: Each investment is selected such that it pays a minimum average annual preferred return of at least 7% (depending on the individual property deal this could be higher than that) which is paid out quarterly via direct deposit into your bank account or by check. In other words, the investors get paid first before the sponsors get paid anything. This protects you as an investor and makes sure we only pick projects that have strong cash flow outlooks.
Profit Share/Back End Profit: Upon a Sale or Refinancing of the property it is our goal to return 100% of the initial invested amount to each investor, and then do a profit split that is typically 70%/30% between investor/sponsor
Yes! We’re here to guide you and can provide educational resources that will help you confidently make smarter investing choices.
You can get started as an investor with Prime Investment LLC by completing an online investor application.
- When you invest in a REIT, you are buying shares in a company, just like when you buy shares in a stock. You do not own the underlying real estate, you own shares in the company that owns those assets.
- When you invest in a real estate syndication, you are investing directly in a specific property. Together with the other limited partner investors and general partners, you will own the entity (usually an LLC) that holds the asset. Thus, you have direct ownership.
- When you invest in an apartment REIT, that REIT will likely own and manage a lot of apartment buildings in multiple markets across the country. With a real estate syndication, you are investing in a single property in a single market.
- With a REIT, you can invest a very small amount of money, just like a stock. Syndications typically have higher minimum investments, often $50,000 or higher.
- When you invest directly in a property through a real estate syndication, you get the benefit of a variety of tax deductions, including depreciation. In some case those tax benefits can be quite substantial. The depreciation benefits often surpass the cash flow, so you’re showing a loss on paper while you’re actually getting positive cash flow. Further, you can use those paper losses to offset your other income, like income from your job.
- When you invest in a REIT, because you’re investing in the company and not directly in the real estate, you do get the benefits of depreciation, but those are factored in before you get your dividends, so you don’t get any tax breaks on top of that, and you can’t use that depreciation to offset any of your other income. And any dividends are taxed as ordinary income, which can contribute to a bigger, rather than smaller, tax bill.
It varies from property to property, but in general as a LP (Limited Partner) you should expect to receive a cash distribution on a quarterly basis, and then also upon an exit event. The first quarterly cash distribution is typically a short time after the end of the quarter in which the property closes.
Not Sure? We Can Help!
Review our investors’ guide and / or consult with us.
Ashok Patil
Ashok is an experienced professional realtor with focus on commercial and residential real estate investments, money lending, and Fix & Flips. In this endeavor, he infuses his expertise from the digital world and data analytics.
Mohit Bansal
Mohit has been an active real estate investor in the Single Family, Multi Family and Commercial properties for more than a decade now. Mohit founded Prime Investment, LLC for his love and passion for Real Estate.