Invest in Real Estate Without the Headaches!

For generations direct real estate investing has provided immense wealth, but only for the select few. Historically, investors needed specific knowledge, the right connections and most importantly access to large amounts of capital. Hedge funds, professional investors, and the ultra wealthy have taken advantage of these opportunities for years, but now any Accredited Investor can participate in this once out of reach opportunity. We provide our investors the opportunity to invest in real estate without the headaches of direct asset ownership!

Why Private Real Estate over Public Real Estate?

Like stocks, bonds and mutual funds, public real estate investment trusts (REITS) can be traded daily and thus have high volatility as they are associated with the public markets.   On the other hand, private real estate has shown historically low correlation to public markets thus providing better diversification.   In today’s age where equity markets have increased in volatility and uncertainty, private real estate investing can provide opportunity for above average returns and cash flow without the ups and downs of a public security.

Another advantage of investing in private real estate would be the tax benefits associated with being a passive investor in the project or fund.  Passive investors are limited partners (LP’s) who directly own a percentage of the real estate which creates tax benefits that are passed through to LP investors.  These benefits have the ability to offset a percentage of the taxes owed from the return on the investment.  

The Why and How to Passive Real Estate Investing

BV Capital's President Rob Anderson, presenting on The Money Show 2022

Invest In Texas Real Estate

BV Capital's President Rob Anderson, presenting on The Money Show 2021

Why Do The Wealthiest Investors Choose Real Estate?

BV Capital's President Rob Anderson, presenting on The Money Show 2020

So why do the most Wealthy Investors choose Real Estate?

  • Diversification from Stock and Bond Markets – As an asset class, commercial real estate behaves quite differently than stocks, bonds or mutual funds.  Direct investment in commercial real estate has a historically low correlation with the stock or bond markets.  Unlike the stock market, short term volatility or headline risk is not a significant factor in commercial real estate.
  • Cash Flow – Direct investment in commercial real estate can provide cash flow at or above traditional income markets.  Plus, most commercial real estate deals are structured with a sizable return upon exit or sale of the property.
  • Less Volatility – Many commercial real estate leases are multiyear leases with some in excess of 10 years.  Most office leases also include rent bumps that will increase cash flow during the lease.
  • Asset Based Investment – Real estate is a hard asset that has value both in the building and in the land.  These assets are used to increase the value of the land through cash flow.
  • Tax Advantages – A direct investment in commercial real estate is done through investing in a limited liability company (LLC) that holds the real estate.  Investors buy units in the LLC in the form of equity or debt.  The LLC then passes through deductions such as depreciation, interest expense and other items that defer taxes on distributions.  Many of our investors receive a passive loss on their K1’s until we exit or sell a property. At the time of sale the profit is considered a long term capital gain if held longer than a year which is typical.
  • Inflation Hedge – The factors that create inflation in our economy are the same factors that drive up rents and real estate prices.

Private investing can be impactful to an investors financial future but it can also be a challenge at times to follow all of the terminology used in the private investing space.  To help alleviate this we’ve created this Knowledge Center to help explain concepts and give definitions to terminology that might not be as common place to investors.  

Browse from the four categories below to learn more about private investing:

  • Investment Structure Terms

  • Investment Entity Terms

  • Investment Financial Terms

  • Investment Class Terms

What is a syndication?

A real estate “syndication” is the pooling of funds from many passive investors to purchase income-producing real estate. A passive investor has one role: investing cash in a solicited real estate investment for a specified return. Unlike real estate crowdfunding, real estate syndications usually offer higher upside potential. For an experienced investor, real estate syndications are an attractive alternative to diversify an otherwise low-risk portfolio.

There are three phases of syndication: origination, operation, and liquidation. The origination phase usually lasts several months from property identification to close of escrow including performing due diligence, obtaining financing, and closing the deal. The operation phase can take several years and includes executing the business plan created in the origination phase, usually alongside a professional property manager and other contractors. The liquidation phase involves a “liquidity event” that returns capital to the investors, either the sale of the asset or refinancing of the loan.

What is a private placement?

“Private placements” in real estate are investment opportunities that are bought and sold to a limited group of investors and are not available through public markets like a stock exchange. Private placements are put together by a sponsor which is made up of real estate professionals that form the entity and design, execute, and manage the investment strategy. Investors receive passive income using a hands-off approach in their real estate investment portfolio and rely on the expertise of the sponsor to make decisions and manage the investments.

What is a Reg D offering?

Under the federal securities laws, any offer or sale of a security must either be registered with the SEC or meet an exemption. Regulation D under the Securities Act provides a number of exemptions from the registration requirements, allowing some companies to offer and sell their securities without having to register the offering with the SEC. Reg D offerings are advantageous to private companies or entrepreneurs that meet the requirements because funding can be obtained faster and at a lower cost than with a public offering.

What is a subscription document?

A subscription agreement defines the terms for an investor's application to join a limited partnership. It is a two-way guarantee between a company and a shareholder, or subscriber. The company agrees to sell a certain number of shares or units at a specific price and, in return, the subscriber promises to buy the shares or units at the predetermined price.

Rules for subscription agreements are generally defined in SEC Rule 506(b) and 506(c) of Regulation D allowing companies doing specific types of private placements to raise capital without needing to register the securities with the SEC.

What is an exit strategy?

An exit strategy is a contingency plan that is executed by an investor or sponsor, to liquidate a position in a financial asset or dispose of tangible business assets once predetermined criteria for either has been met or exceeded.

An exit strategy may be executed when an investment or business venture has met its profit objective. An effective exit strategy should be planned for every positive and negative contingency as an integral part of determining the risk associated with the investment.

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