Skip to content

How Real Estate Investors Invest with Us - Multifamily Apartment Investing

With Percy Nikora, Co-Founder

Generally, when an investor invests with us, they are coming into a fund or, essentially, an LLC  that's been created. That LLC will have investors as limited partners, who get one asset- one class of shares and sponsors. The LPs generally get a preferred return on their money. So, there's- the first, let's say, eight percent, 10 percent of any of the profits get ... It goes straight to the investors coming into the deal. After that, it gets split. Again, based on the fund, it could be anywhere from a 80/20 split, all the way to a 60/40 split, depending on the nature of the fund.

So, the LP investors, as we like to call them, or the equity partners, they are owners of that LLC which happens to own the property. As such, any of the depreciation or any of the tax advantages that you get are passed through from that LLC to the owner. At the end of the tax year, you will get a K-1, or a 1065, if you're familiar with that, tax form. That will say, "You own X percentage of this LLC, which happens to own that asset," and that LLC had either X amount of profit, or X amount of paper loss. That is reflected on the LLC, which is then- then you report on your individual tax returns. For most investors, that's considered passive income, and if you have passive losses, you can write it off against your passive income, as well.

Sign up to receive our educational newsletter and to gain exclusive access to our next investment opportunity.



 

Our latest investment opportunity is rapidly gaining subscribers. Learn about it here.


Related Videos

How to Know a Good Deal When You See It

How to Know a Good Deal When You See It With Ed Rogan, Co-Founder Transcript   One, Nolan Ryan it…

Watch here >>
Bringing-Tech-to-Apartment-Investing-Best-Tools-for Real-Estate-Investors

Bringing Tech to Apartment Investing – Best Tools for Real Estate Investors

Bringing Tech to Apartment Investing – Best Tools for Real Estate Investors With Percy Nikora, Co-Founder Transcript   We’re actually…

Watch here >>
What-is-A-Real-Estate-Partnership

What is A Real Estate Partnership?

What is A Real Estate Partnership? With Percy Nikora, Co-Founder So let’s say you want to make an investment in…

Watch here >>