FAQs
What is an Apartment Syndication?
An apartment syndication is the pooling of money from numerous investors that will be used to buy an apartment building and execute the project’s business plan.
What is B1 Holdings’ next project?
B1 Holdings is looking to acquire and manage 20-30 unit apartment buildings in the midwest with a purchase price between $1MM and $2MM.
What are Your responsibilites as the General Partners?
Our team is responsible for finding deals, securing financing for the project, performing due diligience, hiring and overseeing property management, and executing the business plan among other responsibilites.
What kind of returns do you guarantee?
Just like with any investment we cannot guarantee a specific return. Each project is different and provides its own risks and rewards. Projected returns will be presented to qualified investors at the intial investor’s meeting before each project.
What are my responsibilites as a limited partner?
You are responsible for funding a portion of the deal, asking great questions, and seeing monthly returns!
What Type of reporting do your investors receive?
Property updates will be sent monthly via email. Financial updates will be sent out quarterly. You can also schedule a one-on-one call with one of the partners.
COMMON INVESTOR TERMS
Accredited Investor
A person that can invest in apartments by satisfying one of the requirements regarding income or net worth:
A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.
A natural person who has an individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person.
Cap Rate
The rate of return based on the income that the property is expected to generate. The cap rate is calculated by dividing the new operating income by the current market value of a property. For example, a 30 unit property purchased for $2,300,000 with a net operating income of $189,982 has a cap rate of 8.2%
General Partner (GP)
An owner of a partnership who has unlimited liability. A General Partner (GP) is usually a managing partner and is active in the day-to-day operations of the business. In apartment syndications, the GP is also referred to as the sponsor or syndicator and is responsible for managing the entire apartment project.
Internal Rate of Return (IRR)
The rate needed to convert the sum of all future uneven cash flow (cash flow, sales proceeds, and principal paydown on the mortgage loan) to equal the equity investment.
Limited Partner (LP)
A partner whose liability is limited to the extent of their share of ownership. Also referred to as an LP. In apartment syndications, the LP is the passive investor who funds a portion of the equity investment.
Loan-to-Value (LTV)
The ratio of the value of the loan amount divided by the apartment’s appraised value.
Net Operating Income (NOI)
All the revenue from the property minus the operating expenses. For example, an apartment building with an effective gross income of $200,000 and operating expenses of $105,000 has a NOI of $95,000.
Preferred Return
The threshold return that limited partners are offered prior to the general partners receiving payment.
Sophisticated Investor
A sophisticated investor is a high-net-worth investor who is considered to have a depth of experience and market knowledge that makes them eligible for certain benefits and opportunities.
Vacancy Rate
The proportion of unoccupied units. The vacancy rate is calculated by dividing the total number of unoccupied units by the total number of units.