Frequently Asked Questions
Distributions are typically sent quarterly via ACH after we close out the quarter. For certain one-off projects, distributions are made monthly. For every project, the distribution frequency will be clearly indicated upfront.
We underwrite, tour, and make offers on dozens of investment projects before we are awarded a deal that makes sense for us to buy. At a minimum, we want to be able to delivery an 80-100% return for our investors over a five year period.
This means that if an investor places $100,000 in a project, we want to return that initial capital plus another $80-100,000. Double your money in five years or less is our goal.
Depending on the project, we also want to be able to produce 7-10% cash on cash returns, paid quarterly. On a $100,000 investment, an 8% annual cash on cash return would be $8,000/year, or $2,000 paid quarterly.
After closing, we send monthly email updates on operations and renovations, and a Quarterly Investment Report to include profit and loss and rent roll. Distributions are sent quarterly via ACH or check.
The DJE Investor Portal allows investors 24/7 secure access to documents, historical returns, and more.
You can contact us at any time for specific questions and updates or to schedule a tour of the asset.
No. Real Estate investments are illiquid and cannot be cashed out the way stocks or other liquid investments can be.
We typically underwrite a 5 year hold period for multifamily investments. However, we may also refinance out 40-100% of investor’s capital after 18 months.
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).
On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period, in which case the person may satisfy the threshold on the basis of joint income for the years during which the person was married and on the basis of individual income for the other years.
In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:
Any trust, with total assets in excess of $5 million, not formed to specifically 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.
Similar to a 1099, a K-1 form is an accounting of the tax income for the year.
Each investor receives one per investment. K-1 forms are most commonly used in partnerships and in real estate ownership. It is not uncommon for a K-1 to show a “paper loss” despite having received cashflow distributions. These paper losses can help investors reduce their taxable income. Talk to your CPA about how K-1 losses from Real Estate Investments can help reduce your taxable income.
K-1s are prepared by Guerrero CPA and made available to our investors every March.
Download a complimentary copy of our report “The Ideal Investment: How Apartment Buildings Provide the Best Mix of Safety, Returns, and Tax Advantages of Any Investment Vehicle.”