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FAQs

Frequently Asked Questions and Key Terms

  • Am I an Accredited Investor?
    An accredited investor, in the context of a natural person, includes anyone who: earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you: any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or any entity in which all of the equity owners are accredited investors. In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
  • What is a Sophisticated Investor?
    A Sophisticated Investor doesn’t meet the requirements of an Accredited Investor but they have investor experience. This could mean the person believes they have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
  • What are my responsibilities as an investor?
    After the deal is funded your active role in the deal is complete. After that point as the limited partner you will be receiving distribution and investor reports to review.
  • What is a Syndication?
    Syndication is the pooling of investor money where the investor is typically a limited partner and the general partner, or active partner, puts the deal together and manages the business plan to provide a return for the benefit of all investors.
  • What is a PPM?
    The Private Placement Memorandum is required by the SEC and describes the offering, risks, includes the partnership agreement, investment summary and subscription agreement. It is a lengthy legal document prepared by a syndication attorney. The subscription agreement section includes basic information as to amounts being purchased and percent ownership. The risk section highlights just about every possible risk that could happen.
  • Early Exit?
    There is nothing in our prospectus for an early return of capital. The investment should be considered an illiquid investment. That said, the general partner will review your situation and see if there is something that can be done to help.
  • Tax Impact?
    In a real estate syndication, limited partners invest money in a project managed by a general partner. The tax impact of apartment syndication for the limited partner depends on several factors, such as the structure of the deal, the type of income generated, and the individual's tax situation. Typically, the limited partner will receive a K-1 form from the syndication, which reports their share of the partnership's income, deductions, and credits. The income may be subject to federal and state taxes, including ordinary income tax, capital gains tax, and depreciation recapture. However, the limited partner may also benefit from tax deductions, such as depreciation, which can offset some of their taxable income. Overall, it's important for limited partners to consult with a tax professional to understand their specific tax implications and strategies for optimizing their tax position.
  • What is the minimum investment?
    Our minimum investment usually starts at $50,000
  • What are the financial risks?
    Risks are outlined in the Private Placement Memorandum. That said, here are a few data points. In 2009, at the bottom of the financial crisis, delinquency rates on single family homes was 5% vs 1% on MF apartments. We further mitigate risk by targeting proven assets in good locations. Our due diligence includes auditing the trailing 12-month financials, bank records and tax returns. Additionally, lenders will not loan millions of dollars unless we are experienced, have a good business plan with conservative underwriting (banks will underwrite the deal as well), have adequate insurance, and have an inspection completed by experts.
  • What is my liability as an Limited Partner/Investor in an apartment syndication?
    As a limited partner in an apartment syndication, your liability is generally limited to the amount of your investment in the syndication. This means that you are not personally responsible for any debts or obligations of the syndication beyond your investment. The limited liability protection for limited partners is one of the main advantages of investing in a syndication. It allows you to participate in the potential profits of the investment without assuming the full risk of the project. It is important to carefully review the syndication agreement and consult with legal and financial professionals before investing to understand your rights and obligations as a limited partner and to assess the potential risks involved.
  • What are General Partners and Limited Partners?
    Multifamily syndication typically has two types of partners: General Partners (GPs) and limited partners (LPs). The GPs are the managing partners or group that lead the syndication and are responsible for the legwork of the investment: sourcing the deal, securing any lending/ debt needed, raising capital, and day-to-day operations after the purchase of the asset are made. The LPs are investors who provide capital but do not have an active role in management or voting and quite often are shielded from most of the day-to-day liabilities of the asset while still participating in the benefits. In most cases, limited partners are passive investors who rely on the experience, expertise, and legwork of the general partner to generate hands-off returns. While this arrangement can provide significant benefits for both parties, it is important to investigate and understand the roles and benefits of each investment.
  • What are the General Partner’s (Shining Rock Equity) responsibilities?
    Build a team of best-in-class industry professionals Source and discover opportunities for our investors Analyze and identify hidden value within the community Produce an achievable business plan that includes physical and operational value-add opportunities Make and negotiate offer and terms and win the deal Finalize purchase and sale agreements Conduct thorough on-site due diligence with our property management team and professional property inspectors Secure attractive financing via our lending relationships Coordinate with our attorneys to create the LLC and partnership agreements Close deal and assume ownership of the property Execute property business plan with our property management team Refinance and/or sell property to maximize investor returns
  • How do you make money as the General Partner or Sponsor?
    We make our primary returns based on the equity that we invest inside the deal alongside our capital partners. As sponsors we are confident in every deal that we put together and feel the best way to convey this belief is to always invest alongside our capital partners. As the General Partner, we receive an acquisition fee for identifying the opportunity, performing due diligence and acquiring debt to close the deal. Additionally, we earn an ongoing asset management fee throughout the hold period for ensuring the completion of the capital improvements, overseeing the property management company, communicating monthly and timely updates to the limited partners, and ultimately executing the overall business plan for the property. Furthermore, as the General Partner, we earn a percentage of the upside along with our Limited Partners for executing on our business plan.
  • General Partner's fees?
    The returns forecasted to you are after fees. The most common fee is an acquisition fee based on purchase price and is paid closing. This covers the general partner’s costs to find the deal and get it under contract. The second most common fee is the asset management fee which is compensation for holding the property manager accountable, to ensure execution of the business plan, bookkeeping, and distribution of checks and K1s. The asset management fee is aligned with the investor’s interest as it is based on the property’s revenues. Industry averages are 1-4 % for both fees.
  • Value-Add Strategy?
    Think of it as a business rather than a building. The more income it generates, the more it is worth. When we purchase an apartment complex, we are looking for specific opportunities to increase the cashflow in different areas. These are called “Value Plays” or “Value Adding Components”.
  • Value plays we capitalize on?
    Mismanagement cause by owner self-managing Poor supervision of management companies Deferred maintenance High vacancies Below market rents Some examples of value-add plays we implement at Shining Rock Equity: Improve curb appeal by improving landscaping, adding dog parks, carports, etc. Residents will pay more when a property is in better condition and has amenities. Purchasing a property that is 10% or more under current market rents. This gives us the opportunity to increase rents and immediately increase the value of the property. Implement a water and sewage bill-back system to charge the residents for actual usage. Most apartment owners pay for all the water. When we bill back the residents it helps offset expenses and increase the cash flow. Through this system residents tend to become more frugal and will decrease overall operating expenses. Improve unit interiors with new paint, appliances, countertops, and floors Adding a coin laundry facility to the complex Below market rents
  • How do I send my investment funds?
    You will be provided wiring instructions or you may send a check if preferred.

Key Terms

  • Am I an Accredited Investor?
    An accredited investor, in the context of a natural person, includes anyone who: earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you: any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or any entity in which all of the equity owners are accredited investors. In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
  • What is a Sophisticated Investor?
    A Sophisticated Investor doesn’t meet the requirements of an Accredited Investor but they have investor experience. This could mean the person believes they have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
  • What are my responsibilities as an investor?
    After the deal is funded your active role in the deal is complete. After that point as the limited partner you will be receiving distribution and investor reports to review.
  • What is a Syndication?
    Syndication is the pooling of investor money where the investor is typically a limited partner and the general partner, or active partner, puts the deal together and manages the business plan to provide a return for the benefit of all investors.
  • What is a PPM?
    The Private Placement Memorandum is required by the SEC and describes the offering, risks, includes the partnership agreement, investment summary and subscription agreement. It is a lengthy legal document prepared by a syndication attorney. The subscription agreement section includes basic information as to amounts being purchased and percent ownership. The risk section highlights just about every possible risk that could happen.
  • Early Exit?
    There is nothing in our prospectus for an early return of capital. The investment should be considered an illiquid investment. That said, the general partner will review your situation and see if there is something that can be done to help.
  • Tax Impact?
    In a real estate syndication, limited partners invest money in a project managed by a general partner. The tax impact of apartment syndication for the limited partner depends on several factors, such as the structure of the deal, the type of income generated, and the individual's tax situation. Typically, the limited partner will receive a K-1 form from the syndication, which reports their share of the partnership's income, deductions, and credits. The income may be subject to federal and state taxes, including ordinary income tax, capital gains tax, and depreciation recapture. However, the limited partner may also benefit from tax deductions, such as depreciation, which can offset some of their taxable income. Overall, it's important for limited partners to consult with a tax professional to understand their specific tax implications and strategies for optimizing their tax position.
  • What is the minimum investment?
    Our minimum investment usually starts at $50,000
  • What are the financial risks?
    Risks are outlined in the Private Placement Memorandum. That said, here are a few data points. In 2009, at the bottom of the financial crisis, delinquency rates on single family homes was 5% vs 1% on MF apartments. We further mitigate risk by targeting proven assets in good locations. Our due diligence includes auditing the trailing 12-month financials, bank records and tax returns. Additionally, lenders will not loan millions of dollars unless we are experienced, have a good business plan with conservative underwriting (banks will underwrite the deal as well), have adequate insurance, and have an inspection completed by experts.
  • What is my liability as an Limited Partner/Investor in an apartment syndication?
    As a limited partner in an apartment syndication, your liability is generally limited to the amount of your investment in the syndication. This means that you are not personally responsible for any debts or obligations of the syndication beyond your investment. The limited liability protection for limited partners is one of the main advantages of investing in a syndication. It allows you to participate in the potential profits of the investment without assuming the full risk of the project. It is important to carefully review the syndication agreement and consult with legal and financial professionals before investing to understand your rights and obligations as a limited partner and to assess the potential risks involved.
  • What are General Partners and Limited Partners?
    Multifamily syndication typically has two types of partners: General Partners (GPs) and limited partners (LPs). The GPs are the managing partners or group that lead the syndication and are responsible for the legwork of the investment: sourcing the deal, securing any lending/ debt needed, raising capital, and day-to-day operations after the purchase of the asset are made. The LPs are investors who provide capital but do not have an active role in management or voting and quite often are shielded from most of the day-to-day liabilities of the asset while still participating in the benefits. In most cases, limited partners are passive investors who rely on the experience, expertise, and legwork of the general partner to generate hands-off returns. While this arrangement can provide significant benefits for both parties, it is important to investigate and understand the roles and benefits of each investment.
  • What are the General Partner’s (Shining Rock Equity) responsibilities?
    Build a team of best-in-class industry professionals Source and discover opportunities for our investors Analyze and identify hidden value within the community Produce an achievable business plan that includes physical and operational value-add opportunities Make and negotiate offer and terms and win the deal Finalize purchase and sale agreements Conduct thorough on-site due diligence with our property management team and professional property inspectors Secure attractive financing via our lending relationships Coordinate with our attorneys to create the LLC and partnership agreements Close deal and assume ownership of the property Execute property business plan with our property management team Refinance and/or sell property to maximize investor returns
  • How do you make money as the General Partner or Sponsor?
    We make our primary returns based on the equity that we invest inside the deal alongside our capital partners. As sponsors we are confident in every deal that we put together and feel the best way to convey this belief is to always invest alongside our capital partners. As the General Partner, we receive an acquisition fee for identifying the opportunity, performing due diligence and acquiring debt to close the deal. Additionally, we earn an ongoing asset management fee throughout the hold period for ensuring the completion of the capital improvements, overseeing the property management company, communicating monthly and timely updates to the limited partners, and ultimately executing the overall business plan for the property. Furthermore, as the General Partner, we earn a percentage of the upside along with our Limited Partners for executing on our business plan.
  • General Partner's fees?
    The returns forecasted to you are after fees. The most common fee is an acquisition fee based on purchase price and is paid closing. This covers the general partner’s costs to find the deal and get it under contract. The second most common fee is the asset management fee which is compensation for holding the property manager accountable, to ensure execution of the business plan, bookkeeping, and distribution of checks and K1s. The asset management fee is aligned with the investor’s interest as it is based on the property’s revenues. Industry averages are 1-4 % for both fees.
  • Value-Add Strategy?
    Think of it as a business rather than a building. The more income it generates, the more it is worth. When we purchase an apartment complex, we are looking for specific opportunities to increase the cashflow in different areas. These are called “Value Plays” or “Value Adding Components”.
  • Value plays we capitalize on?
    Mismanagement cause by owner self-managing Poor supervision of management companies Deferred maintenance High vacancies Below market rents Some examples of value-add plays we implement at Shining Rock Equity: Improve curb appeal by improving landscaping, adding dog parks, carports, etc. Residents will pay more when a property is in better condition and has amenities. Purchasing a property that is 10% or more under current market rents. This gives us the opportunity to increase rents and immediately increase the value of the property. Implement a water and sewage bill-back system to charge the residents for actual usage. Most apartment owners pay for all the water. When we bill back the residents it helps offset expenses and increase the cash flow. Through this system residents tend to become more frugal and will decrease overall operating expenses. Improve unit interiors with new paint, appliances, countertops, and floors Adding a coin laundry facility to the complex Below market rents
  • How do I send my investment funds?
    You will be provided wiring instructions or you may send a check if preferred.
  • Am I an Accredited Investor?
    An accredited investor, in the context of a natural person, includes anyone who: earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you: any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or any entity in which all of the equity owners are accredited investors. In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
  • What is a Sophisticated Investor?
    A Sophisticated Investor doesn’t meet the requirements of an Accredited Investor but they have investor experience. This could mean the person believes they have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
  • What are my responsibilities as an investor?
    After the deal is funded your active role in the deal is complete. After that point as the limited partner you will be receiving distribution and investor reports to review.
  • What is a Syndication?
    Syndication is the pooling of investor money where the investor is typically a limited partner and the general partner, or active partner, puts the deal together and manages the business plan to provide a return for the benefit of all investors.
  • What is a PPM?
    The Private Placement Memorandum is required by the SEC and describes the offering, risks, includes the partnership agreement, investment summary and subscription agreement. It is a lengthy legal document prepared by a syndication attorney. The subscription agreement section includes basic information as to amounts being purchased and percent ownership. The risk section highlights just about every possible risk that could happen.
  • Early Exit?
    There is nothing in our prospectus for an early return of capital. The investment should be considered an illiquid investment. That said, the general partner will review your situation and see if there is something that can be done to help.
  • Tax Impact?
    In a real estate syndication, limited partners invest money in a project managed by a general partner. The tax impact of apartment syndication for the limited partner depends on several factors, such as the structure of the deal, the type of income generated, and the individual's tax situation. Typically, the limited partner will receive a K-1 form from the syndication, which reports their share of the partnership's income, deductions, and credits. The income may be subject to federal and state taxes, including ordinary income tax, capital gains tax, and depreciation recapture. However, the limited partner may also benefit from tax deductions, such as depreciation, which can offset some of their taxable income. Overall, it's important for limited partners to consult with a tax professional to understand their specific tax implications and strategies for optimizing their tax position.
  • What is the minimum investment?
    Our minimum investment usually starts at $50,000
  • What are the financial risks?
    Risks are outlined in the Private Placement Memorandum. That said, here are a few data points. In 2009, at the bottom of the financial crisis, delinquency rates on single family homes was 5% vs 1% on MF apartments. We further mitigate risk by targeting proven assets in good locations. Our due diligence includes auditing the trailing 12-month financials, bank records and tax returns. Additionally, lenders will not loan millions of dollars unless we are experienced, have a good business plan with conservative underwriting (banks will underwrite the deal as well), have adequate insurance, and have an inspection completed by experts.
  • What is my liability as an Limited Partner/Investor in an apartment syndication?
    As a limited partner in an apartment syndication, your liability is generally limited to the amount of your investment in the syndication. This means that you are not personally responsible for any debts or obligations of the syndication beyond your investment. The limited liability protection for limited partners is one of the main advantages of investing in a syndication. It allows you to participate in the potential profits of the investment without assuming the full risk of the project. It is important to carefully review the syndication agreement and consult with legal and financial professionals before investing to understand your rights and obligations as a limited partner and to assess the potential risks involved.
  • What are General Partners and Limited Partners?
    Multifamily syndication typically has two types of partners: General Partners (GPs) and limited partners (LPs). The GPs are the managing partners or group that lead the syndication and are responsible for the legwork of the investment: sourcing the deal, securing any lending/ debt needed, raising capital, and day-to-day operations after the purchase of the asset are made. The LPs are investors who provide capital but do not have an active role in management or voting and quite often are shielded from most of the day-to-day liabilities of the asset while still participating in the benefits. In most cases, limited partners are passive investors who rely on the experience, expertise, and legwork of the general partner to generate hands-off returns. While this arrangement can provide significant benefits for both parties, it is important to investigate and understand the roles and benefits of each investment.
  • What are the General Partner’s (Shining Rock Equity) responsibilities?
    Build a team of best-in-class industry professionals Source and discover opportunities for our investors Analyze and identify hidden value within the community Produce an achievable business plan that includes physical and operational value-add opportunities Make and negotiate offer and terms and win the deal Finalize purchase and sale agreements Conduct thorough on-site due diligence with our property management team and professional property inspectors Secure attractive financing via our lending relationships Coordinate with our attorneys to create the LLC and partnership agreements Close deal and assume ownership of the property Execute property business plan with our property management team Refinance and/or sell property to maximize investor returns
  • How do you make money as the General Partner or Sponsor?
    We make our primary returns based on the equity that we invest inside the deal alongside our capital partners. As sponsors we are confident in every deal that we put together and feel the best way to convey this belief is to always invest alongside our capital partners. As the General Partner, we receive an acquisition fee for identifying the opportunity, performing due diligence and acquiring debt to close the deal. Additionally, we earn an ongoing asset management fee throughout the hold period for ensuring the completion of the capital improvements, overseeing the property management company, communicating monthly and timely updates to the limited partners, and ultimately executing the overall business plan for the property. Furthermore, as the General Partner, we earn a percentage of the upside along with our Limited Partners for executing on our business plan.
  • General Partner's fees?
    The returns forecasted to you are after fees. The most common fee is an acquisition fee based on purchase price and is paid closing. This covers the general partner’s costs to find the deal and get it under contract. The second most common fee is the asset management fee which is compensation for holding the property manager accountable, to ensure execution of the business plan, bookkeeping, and distribution of checks and K1s. The asset management fee is aligned with the investor’s interest as it is based on the property’s revenues. Industry averages are 1-4 % for both fees.
  • Value-Add Strategy?
    Think of it as a business rather than a building. The more income it generates, the more it is worth. When we purchase an apartment complex, we are looking for specific opportunities to increase the cashflow in different areas. These are called “Value Plays” or “Value Adding Components”.
  • Value plays we capitalize on?
    Mismanagement cause by owner self-managing Poor supervision of management companies Deferred maintenance High vacancies Below market rents Some examples of value-add plays we implement at Shining Rock Equity: Improve curb appeal by improving landscaping, adding dog parks, carports, etc. Residents will pay more when a property is in better condition and has amenities. Purchasing a property that is 10% or more under current market rents. This gives us the opportunity to increase rents and immediately increase the value of the property. Implement a water and sewage bill-back system to charge the residents for actual usage. Most apartment owners pay for all the water. When we bill back the residents it helps offset expenses and increase the cash flow. Through this system residents tend to become more frugal and will decrease overall operating expenses. Improve unit interiors with new paint, appliances, countertops, and floors Adding a coin laundry facility to the complex Below market rents
  • How do I send my investment funds?
    You will be provided wiring instructions or you may send a check if preferred.
  • Am I an Accredited Investor?
    An accredited investor, in the context of a natural person, includes anyone who: earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you: any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or any entity in which all of the equity owners are accredited investors. In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
  • What is a Sophisticated Investor?
    A Sophisticated Investor doesn’t meet the requirements of an Accredited Investor but they have investor experience. This could mean the person believes they have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
  • What are my responsibilities as an investor?
    After the deal is funded your active role in the deal is complete. After that point as the limited partner you will be receiving distribution and investor reports to review.
  • What is a Syndication?
    Syndication is the pooling of investor money where the investor is typically a limited partner and the general partner, or active partner, puts the deal together and manages the business plan to provide a return for the benefit of all investors.
  • What is a PPM?
    The Private Placement Memorandum is required by the SEC and describes the offering, risks, includes the partnership agreement, investment summary and subscription agreement. It is a lengthy legal document prepared by a syndication attorney. The subscription agreement section includes basic information as to amounts being purchased and percent ownership. The risk section highlights just about every possible risk that could happen.
  • Early Exit?
    There is nothing in our prospectus for an early return of capital. The investment should be considered an illiquid investment. That said, the general partner will review your situation and see if there is something that can be done to help.
  • Tax Impact?
    In a real estate syndication, limited partners invest money in a project managed by a general partner. The tax impact of apartment syndication for the limited partner depends on several factors, such as the structure of the deal, the type of income generated, and the individual's tax situation. Typically, the limited partner will receive a K-1 form from the syndication, which reports their share of the partnership's income, deductions, and credits. The income may be subject to federal and state taxes, including ordinary income tax, capital gains tax, and depreciation recapture. However, the limited partner may also benefit from tax deductions, such as depreciation, which can offset some of their taxable income. Overall, it's important for limited partners to consult with a tax professional to understand their specific tax implications and strategies for optimizing their tax position.
  • What is the minimum investment?
    Our minimum investment usually starts at $50,000
  • What are the financial risks?
    Risks are outlined in the Private Placement Memorandum. That said, here are a few data points. In 2009, at the bottom of the financial crisis, delinquency rates on single family homes was 5% vs 1% on MF apartments. We further mitigate risk by targeting proven assets in good locations. Our due diligence includes auditing the trailing 12-month financials, bank records and tax returns. Additionally, lenders will not loan millions of dollars unless we are experienced, have a good business plan with conservative underwriting (banks will underwrite the deal as well), have adequate insurance, and have an inspection completed by experts.
  • What is my liability as an Limited Partner/Investor in an apartment syndication?
    As a limited partner in an apartment syndication, your liability is generally limited to the amount of your investment in the syndication. This means that you are not personally responsible for any debts or obligations of the syndication beyond your investment. The limited liability protection for limited partners is one of the main advantages of investing in a syndication. It allows you to participate in the potential profits of the investment without assuming the full risk of the project. It is important to carefully review the syndication agreement and consult with legal and financial professionals before investing to understand your rights and obligations as a limited partner and to assess the potential risks involved.
  • What are General Partners and Limited Partners?
    Multifamily syndication typically has two types of partners: General Partners (GPs) and limited partners (LPs). The GPs are the managing partners or group that lead the syndication and are responsible for the legwork of the investment: sourcing the deal, securing any lending/ debt needed, raising capital, and day-to-day operations after the purchase of the asset are made. The LPs are investors who provide capital but do not have an active role in management or voting and quite often are shielded from most of the day-to-day liabilities of the asset while still participating in the benefits. In most cases, limited partners are passive investors who rely on the experience, expertise, and legwork of the general partner to generate hands-off returns. While this arrangement can provide significant benefits for both parties, it is important to investigate and understand the roles and benefits of each investment.
  • What are the General Partner’s (Shining Rock Equity) responsibilities?
    Build a team of best-in-class industry professionals Source and discover opportunities for our investors Analyze and identify hidden value within the community Produce an achievable business plan that includes physical and operational value-add opportunities Make and negotiate offer and terms and win the deal Finalize purchase and sale agreements Conduct thorough on-site due diligence with our property management team and professional property inspectors Secure attractive financing via our lending relationships Coordinate with our attorneys to create the LLC and partnership agreements Close deal and assume ownership of the property Execute property business plan with our property management team Refinance and/or sell property to maximize investor returns
  • How do you make money as the General Partner or Sponsor?
    We make our primary returns based on the equity that we invest inside the deal alongside our capital partners. As sponsors we are confident in every deal that we put together and feel the best way to convey this belief is to always invest alongside our capital partners. As the General Partner, we receive an acquisition fee for identifying the opportunity, performing due diligence and acquiring debt to close the deal. Additionally, we earn an ongoing asset management fee throughout the hold period for ensuring the completion of the capital improvements, overseeing the property management company, communicating monthly and timely updates to the limited partners, and ultimately executing the overall business plan for the property. Furthermore, as the General Partner, we earn a percentage of the upside along with our Limited Partners for executing on our business plan.
  • General Partner's fees?
    The returns forecasted to you are after fees. The most common fee is an acquisition fee based on purchase price and is paid closing. This covers the general partner’s costs to find the deal and get it under contract. The second most common fee is the asset management fee which is compensation for holding the property manager accountable, to ensure execution of the business plan, bookkeeping, and distribution of checks and K1s. The asset management fee is aligned with the investor’s interest as it is based on the property’s revenues. Industry averages are 1-4 % for both fees.
  • Value-Add Strategy?
    Think of it as a business rather than a building. The more income it generates, the more it is worth. When we purchase an apartment complex, we are looking for specific opportunities to increase the cashflow in different areas. These are called “Value Plays” or “Value Adding Components”.
  • Value plays we capitalize on?
    Mismanagement cause by owner self-managing Poor supervision of management companies Deferred maintenance High vacancies Below market rents Some examples of value-add plays we implement at Shining Rock Equity: Improve curb appeal by improving landscaping, adding dog parks, carports, etc. Residents will pay more when a property is in better condition and has amenities. Purchasing a property that is 10% or more under current market rents. This gives us the opportunity to increase rents and immediately increase the value of the property. Implement a water and sewage bill-back system to charge the residents for actual usage. Most apartment owners pay for all the water. When we bill back the residents it helps offset expenses and increase the cash flow. Through this system residents tend to become more frugal and will decrease overall operating expenses. Improve unit interiors with new paint, appliances, countertops, and floors Adding a coin laundry facility to the complex Below market rents
  • How do I send my investment funds?
    You will be provided wiring instructions or you may send a check if preferred.
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