Knowledge Center

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REAL ESTATE TERMS

▴ Rate (Cap Rate) – A rate of return on a real estate investment property based on the expected income that the property will generate. Capitalization rate is used to estimate the investor's potential return on his or her investment. This is done by dividing the income the property will generate (after fixed costs and variable costs) by the total value of the property.
▴When acquiring income property, the higher the capitalization rate (“Cap Rate”), the better.
▴When selling income property, the lower the Cap Rate the better.
▴A higher cap rate implies a lower price, a lower cap rate implies a higher price.
▴Cash Flow – Cash generated from the operations of a company, generally defined as revenues less all operating expenses.
▴Cash-on-Cash – A rate of return often used in real estate transactions. The calculation determines the cash income on the cash invested.
▴Calculated: Annual Dollar Income Return / Total Equity Invested = Cash-on-Cash
▴Debt Service Coverage Ratio (DSCR) – It is the multiples of cash flow available to meet annual interest and principal payments on debt. This ratio should ideally be over 1. That would mean the property is generating enough income to pay its debt obligations.
▴Return on Equity (ROE) – The amount of net income returned as a percentage of shareholders equity.
▴Investor Average Annual Return, excluding disposition – The average return per year during the investment hold.
▴Investor Average Annual Return, including disposition – The average return per year including profits from disposition. This calculation does not include the return of invested capital.
▴Internal Rate of Return (IRR) – The rate of return that would make the present value of future cash flows plus the final market value of an investment opportunity equal the current market price of the investment or opportunity. The higher a project's internal rate of return, the more desirable it is to undertake the project.
▴Return on Equity (ROE) – The amount of net income returned as a percentage of shareholders equity.
▴ROE is expressed as a percentage and calculated as: Return on Equity = Net Income/Shareholder's Equity

FAQs

CAN I INVEST THROUGH MY IRA?

Yes, you can and you should. It needs to be self-directed, SEPs, IRAs, and 401ks you can use as long as you're the custodian, which only requires, only means that you need to call them and say, sends the funds to us.

WHEN WILL THE K-1 BE AVAILABLE TO INVESTORS?

There's another frequently asked question. When you invest with TownCenter Partners LLC LLC, you are a partner and will receive by the end of February every year.

You will get a K-1. As a partner in the real estate and you get all the benefits of depreciation pass through to the partners. All of us get that again. Why you want to be in a real asset, not an a, a stock or a receipt. Number two, you get all the advantages of being a partner in a real estate deal. You want to be partners, you want to be a partner in the deal.

You want to be a partner in a business, so you get a K-1 as opposed to a 1099.

CAN I ADD FUNDS AFTER MY INITIAL INVESTMENT?

Yes, you can. You should check with our team because it depends on where we are in the cycle.

Now, that being said, there's no reason to wait and not invest in the available deal.

CAN I INVEST IF I LIVE IN ANOTHER STATE?

You can invest. If you live in another state as long you are An Accredited Investor.

WHAT TYPE OF RETURNS SHOULD I EXPECT?

We budget on a Year 5 exit a 16% IRR. Some might say that is low but we want to focus on quality assets, protecting investing capital, and assets that will continue to perform even during a correction.

HOW LONG IS THE TERM OF THE DEALS?

The term of the deal is 10 years and with the right to extend further, and by the way, you want to be invested in longer term funds, not shorter term. We usually plan an exit around year 5. Our goal is create strong stable cash flow, protect our investor capital and grow it.

WHAT HAPPEN IF THE MANAGEMENT TEAM PASSES AWAY?

I really appreciate you for asking it because you're confronting the reality of the situation. The real estate will continue operate. We have on every deal professional third party management.

WHEN SHOULD YOU EXPECT YOUR FIRST DISTRIBUTION?

The first distribution will occur 90 days after closing. This is get all of our systems in place, technology, and build up further cash reserves for the property. After the first distribution in 90 days, future distributions will occur every month.

WHAT IS THE DIFFERENCE BETWEEN YOU AND A REIT?

So another question that we are frequently asked is, what is the difference between this and a REIT? Everything. A REIT investment is a piece of paper. If you want, if you want to invest in the stock market, go buy stocks. Real estate, the benefit of real estate is the asset. It's a hard asset. As a real estate investment, you get all the benefits of a real estate investment. You get all the tax advantages of a real estate investment. You get every benefit a real estate investor would get, including a K-1.

You cannot get your money out of this real estate anytime you want. Why? Because it's an illiquid asset that produces cash flow and we're waiting for appreciation.

So if you want to be liquid and you want to watch the market go up and down like this, if you want drama in your life, Invest in the REIT. if you want stability and appreciation and tax advantages, and be a partner with us, Invest with TownCenter Partners LLC.

WHAT ARE THE RISKS INVOLVED?

This involves risk. All investments involve risks. I know this. Every time I invest money in anything, I know, Hey, I'm risking my money here. In every deal we invest in those deals also. Do your homework, and we will answer any and all of your questions.

As an Accredited Investor you understand any investments has risks.

We fight for everything so. We work our butts off to make sure we pick a great piece of property, get great debt on it, and a great property in a great location.

And this rental story is not going to stop. People are going to rent and We really believe that. Real estate it's going to be there long term. It's going to pay us every month, and it's just a matter of time. Before we all get paid some more. Good luck investing. Do your homework. Read the books available for on our website. The Private Placement Memorandum(PPM) will have the risks further discussed and should be reviewed in detail.

 

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