Frequently Asked QuestionsWild Oak Capital FAQs
Multifamily real estate investing does not have to be a headache. We’ve pulled together answers to some of the common questions to help you get clarity.
What is Syndication?
A syndication refers to bringing people together to invest in a project as a team. Essentially, money is pooled to purchase a larger property than most investors could buy on their own. The benefit is that as an investor or “Limited Partner”, you can be totally passive. You invest to own a portion in a large investment that provides cash flow and tax benefits, while the General Partner team manages the investment.
Do I get real estate tax benefits as a passive investor?
Yes! Real Estate has enormous tax benefits, and those benefits are passed to the limited partners. Please contact us to learn more.
Can I use my 401K or IRA to invest?
Yes, you can. Every retirement account situation is different, but this is a great strategy to invest in a syndication. Please reach out to learn more.
How much and how often do I need to invest?
For most projects, the investment is a one-time investment at closing. Typical investment size is $50,000 to $100,000. You need to be comfortable with that investment staying in the project until exit, or until the project is sold. Most projects are 5-9 years.
Can you give an example?
Here is a simple example:
We are purchasing a property for 4 million dollars. The lender needs 25% down payment, and the property requires 1 million for repairs and fees.
So, the project requires a total of 2 million dollars. If each limited partner invests $100,000, then the project requires 20 limited partners, for the total of 2 million.
When will I receive distributions?
Typically, you will receive a quarterly distribution. You will receive a direct deposit or check in the mail.
What is an accredited investor? Do I have to be accredited to invest?
Generally speaking, an accredited investor makes $200,000 per year, or $300,000 per year with their spouse (for the last 2 years) or a net worth of 1 million, excluding their personal home.
Some projects do require only accredited investors. Others require you to be a “sophisticated investor” which does not have clearly defined parameters. Bottom line is that you need to understand the investment and the risks involved.
Please contact us for more information, and we can select the project for your financial situation.
What are the risks?
Every investment has risk associated with it. And, every property has a different risk level. We would love to learn your investment goals to match the correct property with your comfort level. Please contact us to learn about current opportunities.
How much will I know about the business plan?
One of our core values is transparency. You will receive the business plan prior to investing, and progress reports for the property. You will know how the project is progressing at all times, and you are always welcome to reach out with questions.
What will I receive for my accountant and taxes?
Each investor will receive a K-1 at the end of the year. A K-1 is a form used by partnerships to show each partner’s share of the taxable income. Tax benefits are great for real estate, and in most cases, you will not show much taxable income each year, if any.
What are the typical returns and the lengths of these projects?
Every project is different, but typically we aim for 7-10% return for investors. And most projects are typically between 5-9 years.
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