FAQ
A syndication consists of two groups, the General Partner (GP) and the Limited Partner (LP).
The General Partner find the deals, raise funds to purchase the deals, and operate the deals to ensure the business plan is executed properly.
Limited Partners are given an opportunity to invest passively while still having partial ownership and equity in the property.
A PPM agreement is signed and executed prior to closing.
PPM stands for Private Placement Memorandum.
This document outlines the equity split and operating agreement between the GPs and the LPs.
Most deals are split 20-30% equity to the GPs and 70-80% equity to the LPs
The amount you invest proportional to the total amount dictates your ownership percentage.
Example:
$1,000,000 is needed from investors for the purchase and renovations and you invest $100,000.
The deal is split 75% to the LPs and 25% to the GPs.
Therefore you will own 10% of the 75% equity stake for the LPs, or 7.5% of the total property.
Ash Ventures Group focuses on under-performing commercial assets that have significant upside in renovations or improved management to increase returns for our investors.
Distributions vary based on the degree of re-positioning the property needs.
Normally, distributions are made quarterly, beginning with the upcoming quarter following the closing date.
In the rare cases where it is a heavy re-position play, distributions are delayed until the property is stabilized and performing.
As a passive investor, you still reap all the benefits and tax savings of real estate as you have an ownership position on the property.
As a partner in the LLC that purchases the properties, you will receive a K-1.
A K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income.
Partnerships are generally not subject to federal or state income tax, but instead issue a K-1 to each investor to report his or her share of the partnership’s income, gains, losses, deductions and credits.
The K-1s are provided to investors on an annual basis, usually by March 31st, so that each investor can include K-1 amounts on his or her tax return.