Frequently Asked Questions
What is a multi-family syndication?
CREI Partners provides opportunities for investors to grow their wealth in purchasing large multi-family apartments. We bring investors together to purchase bigger projects, reduce risk, and provide greater returns. This form of investing is called a syndication. Each investor owns a percentage of the equity in the property depending on the amount invested. Once the property has been acquired CREI Partners immediately begins the value-add strategy through operational and building improvements. We will increase the value through renovating the building, increasing income, and reducing expenses where possible while maintaining a safe and comfortable environment for our residents. Our investors enjoy the passive income while CREI Partners handles the day to day decisions.
What are the risks of investing?
Multi-family is considered stable and safe among various investment asset classes, however, with any investment there are inherent risks. As part of our efforts to mitigate risks we find off market opportunities by leveraging our relationships with local brokers and owners. We build strong partnerships with highly capable experienced property management companies to optimize income, reduce expenses, and provide a positive touchpoint for our residents. There are no guarantees in investing, however, CREI Partners invest our personal capital and time in the deals to have aligned interests and goals in executing the investment strategy.
Can I invest through my IRA, LLC, LP, or Trust?
Yes. Investors can invest through their traditional self-directed IRAs. Investors are also able to invest through their LLC, LP, or Trust. Please contact CREI Partners if you have questions about how this works or need help selecting a custodian.
What is the minimum investment?
$50,000 is the minimum to invest in a project depending on the investment property. Learn how to invest using your current IRA/401K money without penalty from a third-party self-directed custodian company. Please contact CREI Partners for more details.
Can I visit the property?
Investors are allowed to visit the property before investing and during the life of the project.
What is the structure, return and benefits?
Investors receive a return on investment through passive income and tax benefits in a number of ways. Once the project is renovated and stabilized CREI Partners provides quarterly distributions to our investors. CREI Partners focuses on forced appreciation through renovating the building, increasing rents, and reducing expenses to increase the value of the property. Equity increases with residents paying down the loan of the property. Investors typically pay little to no taxes on these distributions due to depreciation of the asset. Lastly, investors will receive a percentage of the profits from sale set up in the equity structure of the investment.
Every value-add multi-family property investment is different and there is never a guarantee on an amount of return on investment. However, we typically strive to achieve a double-digit IRR (internal rate of return) with no guarantees over the life of the investment, which comes from cash-flow, forced appreciation from adding value, and the profits from the disposition of the property. CREI Partners invest our own capital into these properties and seek every opportunity to maximize investor returns. We discuss the business plan, projected returns, and equity structure with investors for each investment property.
How long do I commit my money to this investment?
The time period varies for each specific business plan, but typically we see an 18 month to 7-year hold period before we employ an exit strategy, such as a refinance or sale. Economic conditions can impact this strategy. Initial timelines will be communicated to investors at acquisition of the property, and will stay updated through our online portal and quarterly call updates. CREI Partners will strive to meet or exceed our initial projections and will prioritize greatest returns for all investors.
Can I cash out of my investment at any time?
No. Commercial real estate investments are longer-term in nature than traditional liquid stocks and bonds. Investors would receive a projected hold period timeline from the beginning of the investment and consistently throughout the life of the project. Cash distributions are done through cash flow from the property during the holding period of the asset, and many times investors may not receive their full principal investment back until the property sells and investors cash out from the profits upon disposition. CREI Partners makes no guarantees of investor returns.
What exactly are the funds used for?
Investor funds are used for the total acquisition cost of the property. This includes but is not limited to the actual purchase price of the property, acquisition fees, legal and transaction costs, capital projects, and reserves.
What are the requirements?
You must qualify as an “accredited” or “sophisticated” investor. These designations are to ensure that investors possess a certain level of financial and investing competence.
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).
There are other categories of accredited investors, including the following, which may be relevant to you:
- any trust, with total assets in excess of $5 million, not formed specifically to 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.
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