Answers to some of our most Frequently Asked Questions.
Frequently Asked Questions
What Types of Real Estate Do You Invest In?
We currently solely invest in 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 and prefer B class in A markets and C+ class in B markets. We believe this positions us in the segment of the market that is shielded most from the ups and downs in the economic cycles.
What is an Accredited Investor?
To qualify as an accredited investor, a person must demonstrate an annual income of $200,000, or $300,000 for joint income, for the last two years with expectation of earning the same or higher income. An individual must have earned income above the thresholds either alone or with a spouse over the last three years. Or A person is also considered an accredited investor if he has a net worth exceeding $1 million, either individually or jointly with his spouse excluding personal home.
Can I still Invest If I Am Not An Accredited Investor?
Yes. Depending on the project. Please Contact Us for more information.
How Does Solid Door Investments Find Properties?
We have relationships with the vast majority of all commercial brokers, who bring us deals often before they go on the open market. We also occasionally engage in direct marketing campaigns and are constantly building relationships with banks to get access to their REO inventory. Once presented with an opportunity our team then underwrites ever single property to the highest standards and eliminates those that do not qualify at our rigorous standards. We then send each property to a team of mentors and coaches to ensure long term sustainability.
What Kind of Return Can I Get Investing With Your Company?
All our investment and Private Placement Memorandums are based on individual properties, and every property is different and will therefore offer different returns. Our current investors are right now realizing between a 8%-9% preferred interest rate, and are expected to double this return upon the sale or refinancing of the property for overall investment lifecycle returns of 16%-18%. Our returns consist of three parts: Preferred Return from Cash Flow: Each investment is selected such that it pays an min. average annual preferred return of at least 6% (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: 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 50/50 profit split between sponsors and investors up to the point where investors doubled their annual return from the Cash flow (so if Preferred Return from Cash flow is 6% the profit split is 50/50 until they reached a total “Target Return” of a 12% per year return over the holding period).
How Much Do You Leverage in Your Real Estate Investment Deals?
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.
How Do You Structure Your Real Estate Deals With Investors?
Great news. You will be 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 … PLUS, you get to tell your friends you “own” an apartment complex, because you do.
Can I Invest In Real Estate Using My IRA or 401K?
Yes, investing in Multi-family 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 www.SpecializedIRAServices.com or www.VantageIRAs.com and once that is done you can invest using your IRA/401K/ROTH-IRA… or several other self-directed retirement account forms. If you have questions about how to do that, please contact us through the Contact Us form.
How Do You Manage Your Properties Once Acquired?
Our company works with highly qualified property management teams with vast experience in leasing, maintenance, on-site and regional management.
- Oversee and executes our strategy for the property
- Stabilizes the property
- Adds value
- Maintains growth and occupancy
- Manages Revenue
- Implements repositioning strategy, if appropriate
An Arizona based firm specializing in midsize apartment complex acquisitions that produce positive cash flow and strong back ends.
Our systematic collaborative approach to performance, KPIs and people constantly elevates our communities to the highest standards possible.
To sell your multi-family property, or to consider investing with us, please call us or email us. Alternatively, please feel free to use our contact form.
Our Promise to You
All our investment and Private Placement Memorandums are based on individual properties, and every property is different and will therefore offer different returns.
WE ARE HERE TO SERVE YOU
Our group has been successful in variable market conditions, employing effective strategies for profitable property acquisitions through any market phase.
EDUCATED AND EXPERIENCED
Our team has extensively studied under some of the real estate industries best.
WE BUY IN EMERGING MARKETS
An essential ingredient in the success of Solid Door Investments is the detailed management of commercial properties
We use a cash ﬂow centric approach, driving proﬁts to the bottom line, while maintaining the asset.