INVESTOR
INFORMATION
AND FAQ'S

INVESTOR INFORMATION

INVESTMENT OPPORTUNITY

We offer qualified investors an opportunity to diversify a portion of their assets into managed real estate investments as part of an investment. This investment strategy has historically demonstrated attractive returns over time and offers additional benefits such as capital preservation, quarterly preferred cash distributions to investors, and capital appreciation over the life of the investment.

CAPITAL STRUCTURE

Investments will typically be financed with 70% – 80% loans, with the remainder of the capital being provided by Investor capital. Investors become Members of a specific LLC that has been formed to acquire one or more properties. LLCs engage in the business of acquiring, improving, operating and disposing of multifamily real estate assets.

PARTNERSHIP ORGANIZATION

Each acquisition will be acquired by a single purposeLLC. This structure enables us to protect individual assets. A Team of Sponsors acts as the Manager of each LLC.

INVESTOR FAQS

These frequently asked questions cover the most common concerns that we often hear from our first time investors. We want every prospective investor to be fully confident that they understand the pros and cons of any specific type of investment.

NO, as in most investments there are no guarantees. As will be explained in the Private Placement Memorandum, under unusual circumstances it is possible for the entire investment to be lost.

This is determined by the specific property and improvement plan and will be specified in each property offering. Typically we intend to hold properties between 3-7 years.

Each property has an anticipated rate of return and a proposed exit strategy. For example, our strategy may be to hold a property for 4 years OR until we hit a specific appreciation hurdle, like a cumulative % return. The first of these two factors to hit will cause to sell the property and pay off investors with available proceeds.

Yes, we welcome introductions to your family and friends – but remember, we make it a point to get to know each and every investor, and to make sure they know us, before we invite them to invest. At any given time we are underwriting/evaluating 3-5 properties that we have received from our strong relationships with brokers. Several are pocket listings that we learn about before they are shared with other investors.

The benefit of this type of investment is you evaluate past performance of the specific project and the sponsorship team,before you invest. You are provided a Private Placement Memorandum, Operating Agreement, and Subscription Booklet along with the latest and 12-month Trailing Profit & Loss, Rent Rolls, Property Brochure, Due Diligence Reports, Lease Audit reports, Executed Sales Contract and more. You see documentation on the profit history of the specific asset you would be investing in, what the current issues are, how the team intends to resolve them , the specific plan and anticipated returns.

Each project has experienced securities legal counsel to help draft the appropriate documents. Commercial real estate counsel helps review loan documents, purchase and sale agreements, and property transaction documents to handle closings.

The property is covered by insurance to mitigate physical damage and liability risks. Property is also insured for loss of rent during rebuilding and carries a full replacement cost with an Umbrella Policy on each property.

To lose all of your investment, something drastic would have to occur that would lead to foreclosure; such as all of the tenants would have to move out due to an undiscovered hazard; or an environmental hazard could completely destroy the property and the insurer fails to pay for the extent of the loss; or US financial markets would have to crash with no refinancing available when a loan on a property is coming due, et al. We perceive this risk to be small, because we buy at a reasonable rate, without overleveraging, and then further increase value by enhancing the property and increasing income.

Sponsor Teams appoint reputable, experienced property management companies to manage all of the assets acquired, to manage the project optimally. This ensures immediate actions and strategy to promptly reverse any negative trends noticed.

Each acquisition is unique, depending if there is existing financing in place, whether the current owner will be carrying back financing, etc. Depending on the scale and value of the asset, most deals will include between 3-25 investors.

Yes. Self- directed IRA’s and pension funds can invest in real estate.

IRA and 401K funds can typically be rolled over into a self-directed IRA account. The custodian is an intermediary that you direct. There are several self-directed IRA custodians,already on our team.

The Sponsorship Team and its Affiliates oversee the management of the properties and execute the value add plan. The property management company on Project Team is fully equipped to manage the asset on a day to day basis with their team of professionals. Each property has its own Community Manager, Assistant Community Manager, Lead Maintenance Technician and Assistant. Typically, 4-5 full-time staff manage each asset acquired.

QUALIFICATIONS

Investors are pre-qualified on the basis of previous investment experience and must qualify as an Accredited or Sophisticated Investor, as defined by the United States Securities and Exchange Commission.

 

Sources of investor funds may be derived from savings, individual retirement accounts (IRAs or 401Ks) and conversion of securities. Projects may periodically offer opportunities that can qualify for 1031 exchanges, such as Tenant In Common ownership or Delaware Statutory Trusts.

PRELIMINARY OFFER QUESTIONNAIRE

The information you supply below will be kept strictly confidential and is only for the purpose of providing you information about possible investment opportunities, if you qualify financially to review such information.

This is not an offer of securities. The actual investment offering will be made only through a Private Placement Memorandum.

After you complete this questionnaire, we will contact you. Before we discuss specific investment opportunities, we want to get to know you and we want you to get to know us.

Thanks for your interest in AEConsortium.

DISTRIBUTIONS

CASH FLOW SPLITS

Projects pay investors a cash on cash rate of return, usually in the range of 7%-9%, depending on the property. The investors are paid,generally quarterly, from cash flow generated from operations of the property; 

DISPOSITION SPLITS

When an asset is sold, usually in 3-5 years, the investors get paid back their capital contributions first as a return of capital.After all books are reconciled; any gains are split between the Investors and the Manager, as described in the LLC Operating Agreement.The target annualized return for our properties are typically between 14%-18% annualized.

INVESTOR RELATIONS

INVESTOR COMMUNICATIONS AND REPORTING

Sponsors hold regular conference/webinar calls to update investors of the property status. Investors also receive executive summaries and the financial reports every quarter. 

ANNUAL REPORT FOR TAX PURPOSES

 

Members will receive annual reports, including a K-1, that contains all information necessary for the Members to complete their individual tax returns.

WEALTH COMPOUNDING

The Emerging real estate market investing strategy is based on monitoring market cycles. The objective is to ensure that accrued equity is optimized by selling each property at the optimum time and putting the equity realized on sale to work, in the next emerging market. Investing in commercial real estate, coupled with rotating appreciation every 3-5 years, into properties in new, emerging markets is a proven strategy for compounding wealth.

Inexperienced investors often miss the selling window by leaving capital to stagnate in softening markets. Allowing an investment to persist in an area suffering from rising unemployment and oversupply can be costly for investors.

Many investors prefer the opportunities and advantages that come from participating in large, professionally managed properties versus individual ownership of smaller properties. Sponsor Team experience in multifamily investment can help insulate investors from the pitfalls of managing tenants on their own.

REAL ESTATE FOR PORTFOLIO INVESTORS

We are actively looking for interested investors. You may qualify to invest with us as either an accredited or sophisticated investor according to SEC guidelines. Click the “Start Investing” button below to fill out our investor form and find out if you qualify to join our multifamily investment team.

Copyright 2022 AEConsortium – All Right Reserved