Frequently Asked Questions

Looking to find out more about REA Capital Management Co. and how we find investors great properties? Find a list of our most frequently asked questions about our company, services, and the investments we offer on our website below. If you still have questions, contact us anytime or sign up to get access to our Preferred Investors Group today!

Q:  What is multi-family Apartment syndication?

A: A multifamily apartment syndication involves a group of investors pooling their money to purchase and operate a large apartment complex, typically as passive investors.

Q: What is REA Capital Management’s approach to real estate investment

A: REA Capital Management’s approach is centered on partnering with top-tier real estate operators with a demonstrated success history and deep expertise in specific locations and asset types. We then fractionalize these curated investment opportunities, making them accessible to our community of accredited investors. This strategy enables us to capitalize on the expertise of experienced real estate professionals, ensuring that our investments are well-positioned for success. It also provides our investors with a diversified and expertly managed portfolio of real estate opportunities.

Q:  What are the benefits of investing in a multi-family Apartment syndication with REA Capital Management?

A: Benefits include passive income, tax advantages, portfolio diversification, and potential for higher returns than traditional investments.

Q:  What long-term objectives does REA Capital Management pursue for its clients?

A: The firm aims to achieve long-term growth, generational wealth accumulation,and advanced tax strategy optimization for its clients.

Q:  How does REA Capital Management determine investment objectives with clients?

A: The firm spends significant time understanding each client’s individual investment goals, which could range from capital appreciation and passive income to long-term growth or advanced tax strategies.

Q:  What are the risks of investing in multifamily apartment syndication?

A: Risks may include insufficient income generation, unexpected maintenance costs, and market condition changes affecting property value.while making a tidy profit for ourselves. We consider this a win for all parties!

Q:  What is the minimum investment amount for REA Capital Managemen’s projects

A: The minimum investment amount is typically around $50,000 to $100,000, with $75,000 being common for most deals.

Q:  How does the equity reservation process work for investing in a specific fund?

A: Once a client decides on their investment portfolio, they receive a non-binding reservation of equity agreement for each specific fund, which holds their position until the fund’s equity is fully committed.

Q:  What is the typical duration of REA Capital Management’s real estate projects?

The typical investment period is 3-6 years, with plans to explore selling as early as year 2 but investors should expect a minimum of 4 years.

Q:  What are Private Placement Memorandum (PPM) and Subscription Documents?

A PPM is a legal document outlining the key details, investment terms, and risks of a capital raise, while Subscription Documents include legal forms that collect essential investor information.

Q:  What is the role of the sponsor in Multi-Family Apartment syndication?

The sponsor manages the acquisition and operation of the property, including fundraising, property management, and eventual sale.

Q:  What is an Accredited Investor?

An accredited investor meets criteria like earning $200,000 annually ($300,000 jointly) or having a net worth of over $1 million, excluding their primary residence.

Q:  What is the Deal Structure in Multi-Family apartment syndication?

A new LLC with share classes for Limited Partners (investors) and General Partners (us) is created for each new property, with a split of equity after a preferred return.

Q:  What is the Preffered Return in multifamily apartment syndication?

A preferred return is a hurdle rate that must be met before General Partners receive their share of profits, typically around 7-8%.

Q:  What is the Preffered Return a Guaranteed Return?

No, it’s not guaranteed. It is a target return that must be met before General Partners can participate in profits.

Q:  What if I Want/Need to Exit a Deal Early?

These investments are typically illiquid, but in special circumstances, arrangements may be made to buy out an investor’s shares on a case-by-case basis.

Q:  Will I Receive Tax Benefits?

Yes, profits and losses are passed through to investors. Real estate can often be depreciated quickly, creating paper losses that may offset other gains.

Q:  How Often Will REA Capital Management Send Updates?

Monthly updates and quarterly financial statements are typical once you invest in a deal.

Q:  How Often Do You Make Distributions?

Profit distributions vary by deal but are typically made quarterly, with some deals offering monthly distributions.

Q:  When do you expect to have a deal?

REA Capital Management aims to have deals 3-6 times per year.

Q:  What are your thoughts on the current market cycle?

While predicting the economy is challenging, the focus is on conservative investments with solid cash flow from day one.

Q:  Aren’t apartments frothy right now?

Despite high demand, investments are based on cash-flow and value-add strategy, with conservative projections for demand upon sale.

Q:  How do I evaluate a multi-family Apartment syndication opportunity?

Evaluate based on the sponsor’s track record, property location and condition, financial projections, and risk level. Due diligence is key.

Investments are selected based on their potential for capital appreciation, income generation, and alignment with the firm’s strategic focus on high-demand real estate sectors.

Q:  What happens at the end of the investment period?

The property is typically sold, and profits are distributed to investors, with options to reinvest or receive cash.

Q:  Can I invest in a multifamily apartment syndication using a self-directed IRA?

Yes, investing through a self-directed IRA is possible, offering the tax benefits of an IRA. See more details HERE.

Q:  What long-term objectives does REA Capital Management ?

The firm aims to achieve long-term growth, generational wealth accumulation, and advanced tax strategy optimization for its clients.

Q:  How does REA Capital Management address market inefficiencies in the housing sector?

The firm targets the “Missing Middle” demographic, providing moderately-priced multifamily and build-for-rent housing options to address the gap between rising housing costs and stagnant incomes .

Q:  What types of real estate does REA Capital Management primarily invest in?

The firm focuses on multifamily development, and hotel properties.

Q:  How does REA Capital Management ensure the quality of its investment opportunities?

The firm’s advisory board, composed of experts in various fields, conducts comprehensive due diligence to ensure each investment opportunity is well-vetted and aligned with investors’ objectives.