An accredited investor is someone who meets certain requirements regarding income and net worth, based on Securities and Exchange Commission (SEC) regulations. This is so that the SEC can ensure proper protection for all investors.
To be an accredited investor, you must satisfy at least one of the following:
1. Have an annual income of $200,000, or $300,000 for joint income, for each of the last two years, with expectations of earning the same or higher income this year.
2. Have a net worth exceeding $1 million, not counting your primary home.
While most of our investments are available to accredited investors only, we do offer a few investments for non-accredited/sophisticated investors.
SolidRock Capital is SEC compliant and strives conduct business in transparent manner.
Before even investors are matched up with suitable investment opportunities, we thrive to build quality long-term substantial relationship.
As a passive investor, you just invest your money, sit back, and start receiving returns. No need to worry about tenants, termites, or toilets.
Passive investors do NOT have to get their credit check nor do they provide any personal / income guarantee for the loan. In other words the liability or risks to your personal assets is none.
We take care of all that and provide you with regular updates.
While the minimum investment can vary, the typical minimum is $50,000. Investors can typically invest using their cash savings or retirement funds. Many investors are not even aware of the fact that their 401k or IRA funds can be self-directed into alternative investments such as real estate syndications.
SolidRock Capital can connect you with its affiliate providers for solo 401k and self directed IRA.
Passive investors are also known as Limited Partners (LPs) and management team is also known as General Partners (GPs). Ideally, all deals should be structured which incentivize both the LPs and GPs, building a win win model.
Profit Split: Depending on the type of LP compensation structure, the general partnership may earn a portion of the remaining profits after the preferred return is distributed. Typically, 70/30 split (70% LP and 30% GP).
Acquisition or Due Diligence Fee: The acquisition fee is an upfront, one-time fee paid to the GP at closing. The acquisition fee ranges from 1% to 5% of the purchase price, depending on the size, scope, experience of team and profit potential of the project.
Think of the acquisition fee as a consulting fee paid to the GP for putting the entire project together. It is a fee that pays the GP for their time and money spent on market research, creating a team (lawyers, CPAs, real estate brokers, etc.), finding the deal, analyzing the deal, raising money, securing financing, performing due diligence and closing.
Asset Management Fee: The asset management fee is an ongoing annual fee paid to the GP in return for overseeing the operations of the property and implementing the business plan. The asset management fee is either a percentage of the collected income or a per unit per year fee.
Refinance Fee: A refinancing fee is a fee that is paid to the GP for the work required to refinance the property.
Guarantee Fee: The guaranty fee is typically a one-time fee paid to a loan guarantor at closing. The loan guarantor guarantees the loan. The GP may bring on an individual with a high net-worth/balance sheet to sign on the loan to get the best terms possible. Or, the GP may sign the loan themselves.
Construction Fee: The construction management fee is an on-going annual fee paid to the company overseeing the capital improvement process. If the GP has a hands-on role in the renovation process or if the GP has their own property management company, they may charge a construction management fee.
Above are ways in which the GPs or management team is compensated. Each deal can possibly be structured differently, above example fees listed are just for illustration purposes.
Commercial real estate assets like apartment buildings and self storage operate independently of the stock market. In fact, they tend to fare better in recessions, because more people tend to downsize. They also tend to be safer investments than single family homes because if one tenant moves out, you still have the others to pay down the mortgage.
While we do extensive research to ensure that we are presenting you with an extremely solid investment, with strong positive cash flow and with tremendous potential for appreciation, it is still possible that you may experience the loss of some or all of your investment capital. Further, there is no guaranty that the Property will generate sufficient or any cash to allow the Company to make distributions to its members.
Just like investing in the stock market, mutual funds and other investments, the potential of losing your investment capital must be considered. However, unlike the stock market, your investment is not liquid and you may not be able to sell your investment except at such time as the Company may allow it.
Further, you have no management control of the Company, and therefore, cannot compel the Company to make any disbursement or take any other actions (e.g., sell the Property). Though we believe that we are presenting an opportunity where the risks usually associated with real estate investment have been appropriately assessed, there are factors beyond our control that could adversely affect the asset and your investment capital.
Examples of factors beyond our control are market crashes, natural disasters, acts of Congress that radically change the investment landscape, acts of terrorism that affect either the property or the financial stability of the economy or both, and others unmentioned or unforeseen here.
That said, our business team takes all the appropriate measures to purchase adequate insurances and do thorougher data driven analysis of all the risks before making investment decisions.
Although these possibilities are highly unlikely, they also must be confronted in making any investment, and SolidRock Capital would be remiss if we did not discuss them upfront so that you as a private investor can consider them in your decision.
All the potential risks are clearly specified in the PPM document or Private Placement Memorandum.