FAQs
General FAQs
An accredited investor is an individual or business that meets certa is allowed to buy and sell unregistered securities. These securities are often complex, high-risk, and not available to the general public.
In the United States, the Securities and Exchange Commission (SEC) defines accredited investors as those who are financially sophisticated and have a lower need for regulatory protection. To qualify, an investor must meet at least one of the following requirements:
Income : Have an earned income of over $200,000 in the previous two years, and expect to earn at least that much in the current year. If applying with a spouse, the combined income must be at least $300,000.
Net worth : Have a net worth of over $1 million, not including the primary residence. Vacation and investment properties can be included
Verification of accredited investor status involves providing financial documentation and obtaining a CPA letter or using third-party verification services to certify eligibility.
A qualified purchaser is an individual or entity that meets specific financial criteria set by the U.S. Securities and Exchange Commission (SEC). These criteria are usually more strict than those for accredited investor. Qualified purchasers are considered to have a sophisticated understanding markets and significant investment experience. This status allows them to access exclusive investment opportunities, such as those in private markets, that are usually unavailable to the general public.
Here are some examples of qualified purchaser criteria:
Individuals: Have at least $5 million in investments
Family-owned businesses: Have at least $5 million in investments
Family offices: Have at least $5 million in investments and are owned by a family with a shared goal of wealth management
Entities: Have at least $25 million in investments and are not formed for the specific purpose of acquiring the securities offered
Trusts: Have at least $5 million in investments and are owned by at least two close members of a familial unit
Qualified institutional buyers (QIBs): Have at least $100 million in investments
Both types of assets are part of your net-worth equation and can include: Cash: savings and checking accounts. Retirement accounts and other investments: 401(k), 403(b) and IRAs. Real estate: the current value of your house and rental properties. For Accredited Investor, exclude your primary residence.
Investment FAQs
Currently Spanmarks Ventures evaluation and invest into Commercial Real Estate, StartUp, Business Acquisition and mergers. In addition, we always evaluate various alternate investment opportunities which build the wealth and provides tax savings.
Commercial Real Estate ranging from Multi Family, Self Storage, Short Term Rentals, Retail, Warehouses, many other.
Real estate syndication is a way for multiple investors to pool their money to purchase or develop real estate:
How it works
A group of investors, led by a sponsor or syndicator, pool their money to buy a property or build a new one. The syndicator is responsible for finding and managing the property.
Benefits
Syndication allows investors to:
Invest in larger projects: Investors can participate in projects that they couldn't afford or manage on their own.
Spread risk:
Investors can spread their risk across multiple properties and other investors.
Take advantage of tax benefits: Investors can receive tax benefits like depreciation deductions and pass-through taxation.
Structure
Syndications are usually organized as a limited liability company (LLC) or limited partnership (LP). The syndication has a manager or general partner, who is often different from the sponsor.
Roles
Investors have different rights and return potential based on their liability, effort, and capital commitment.
Fees
Passive investors pay fees at various stages of the investment, including acquisition, asset management, construction management, and disposition.
Profit sharing
Once investors receive their preferred return, the remaining profit is split between the investors and the sponsor based on a predetermined profit structure.
Performance is tied to a single asset
In many syndication deals, investors' capital is tied to the performance of a single asset. This concentration increases the risk. Any issues with the property – whether operational challenges, market downturns, or unexpected repairs – can adversely affect the overall investment.
The property is typically owned by a legal entity, such as a limited partnership (LP) or limited liability company (LLC), that is created specifically for the investment. The investors in the syndication, who contribute capital to the project, become owners of the legal entity and therefore own a share of the property
A special purpose vehicle (SPV) is a legal entity that's created for a specific purpose, such as a business activity or investment. SPVs are often used to:
Pool capital:
Investors can pool their money into an SPV to make a single investment.
Isolate assets:
SPVs can be used to isolate a company's assets, operations, or risks from its parent company.
Mitigate risk
SPVs can shield a parent company from financial risk by operating independently.
Establish a track record
Fund managers can use SPVs to build a track record before launching a venture capital fund.
Invest outside of fund strategy
Fund managers can use SPVs to invest in companies that don't fit their fund's strategy.
SPVs are often used in structured finance applications, such as asset securitization, joint ventures, or property deals. They can also be used by public institutions to provide services or execute civil work.
Best way to know latest upcoming deals is by Joining our Community. You will always get email about upcoming investment opportunities. Alternatively check our web page at a192dfd9ae26005f49af887660a1f8c1
Internal rate of return (IRR) is a financial metric used to measure the profitability of an investment over a specific period of time and is expressed as a percentage. For example, if you have an annual IRR of 12%, that means you have 12% more of something than you did 12 months earlier.
Average Annual Return, a percentage that measures the historical return of a mutual fund over a period of time, such as three, five, or 10 years.Investors use AAR to compare mutual funds and measure their long-term performance.
Cash on cash return is a rate of return ratio that calculates the total cash earned on the total cash invested.
In real estate, EM can stand for Equity Multiple, a financial metric that measures the total return on an investment relative to the initial investment. If a real estate syndication deal has an equity multiple of 2x and a projected hold time of 5 years, that means investors can expect to double their capital (original investment) in that 5 year period.