A. Yes. The LPs will typically retain 70-80% of ownership while the GPs hold the remaining See What is a Syndication for additional information.

A. A Limited Partner (LP) is typically someone who does not want the responsibility or have the knowledge of managing an asset (apartment). The LP understands the many benefits to owning an apartment and wants to place their capital in apartments to take advantage of the financial returns. A

General Partner (GP) is someone who wants to share in the responsibility in operating an apartment investment.

A. Typically, quarterly distributions will be made to the partners based on the net operating income for the quarter in which distributions are being made. Checks will be deposited directly into your bank account.

A. No, Selarom Properties will joint venture and syndicate apartments.

A. It depends on the deal, but $30,000 – $50,000.

A. Yes, when we have the capital finds available. If we have multiple properties closing within a relative short amount of time, we may not always have the finds to invest in both properties. Although, we do want to provide the opportunity to investors. So, we will move on a property even though, Selarom Properties does not have the capital.

A. As a partner in our limited partnership, you will benefit from your portion of the investment’s deductions for property taxes, loan interest and depreciation. Although, once the property is sold Capital gains tax will apply. As always, you need to contact your CPA to discuss your particular situation and how taxes will be assessed on you personally.

A. Yes, they are outlined in the Private Placement Memorandum. Risks could vary from a pandemic, to a downturn economy, to natural disasters. We attempt to mitigate those risks with conservative underwriting and forming the LLC.

A. We simply would not sell at that time and wait for the opportune time to meet to get close to our projections. The benefit of investing in an apartment is that people still need a place to live in. We look at assets that would be a transition for people moving from homes to an apartment during a downturn economy or people moving from high and overpriced apartments. Apartments have historically outperformed other investing strategies since there are multiple ways in which the asset pays you; cash-flow, mortgage pay-down by the tenants, appreciation, and as a tax shelter.

A. Usually within the 5 – 7 years. Since our properties are value add, it will take some time to have the business plan work itself out to create the additional value. Although, if it is beneficial to the LLC, we will go for a refi as early as year 2 but usually in years 3-4 where we can return at least 65% of the initial invest back. The refi is on a case-by-case basis.

A. The GPs usually get paid in a few ways; an acquisition fee, asset management fee and ownership. The acquisition and asset management fees usually in the 1-3% range. The acquisition fee helps the GPs recover some of their expenditures in the initial analysis, getting the property under contract, and making a trip(s) to the property. The acquisition fee is included in the closing costs and is distributed to the GPs at closing. There are expenses that come up during the asset management as well which include making visits to the site, weekly coordination with the property manager, management of the business plan, preparing reports for the owners of the LLC, and distribution of checks. The amount received is a percentage of the property’s revenues. Finally, the GPs retain a certain percentage of ownership as well. The percentage is usually in the 20% range.