1. Analyzing all the financial aspects of each property for both a cash purchase
2. Conducting all inspections including: radon testing, underground storage tank sweeps, and home inspections
3. Working with the township to obtain certificates of occupancy and smoke certification.
As closing nears, SRG coordinates with attorneys, sellers, agents, title, and insurance to close the property. Upon closing, SRG works closely with the property management company to ensure all aspects of the property are taken care of including, project management for renovations, marketing for tenants, vetting and placing of tenants, collecting deposits and monthly rent, cash control and banking, conducting inspections of the property and making recommendations to enhance net operating income.
FREQUENTLY ASKED QUESTIONS
How do you locate/acquire these properties?
Through our extensive marketing campaigns, networks of real estate professionals, and years of expertise, we are able to identify properties before they are available to the general market. As such, we are able to acquire them at deep discounts.
The investor owns 100% of the property. There are several methods of structuring the purchase including:
1. Purchasing it under a newly formed LLC (usually a cash purchase)
2. Purchasing it under the investor’s personal name (usually a leveraged purchase)
3. Purchasing it under the investors IRA account using retirement funds
SRG acts as the operator in this transaction, responsible for procuring the properties and conducting all necessary due diligence. We will assist you in conducting all inspections and coordinate the parties involved including: seller, attorneys, title companies, property management team etc. SRG does not function as the partner’s personal accountant, lawyer, or financial advisor.
This is at the investor’s discretion and they can be as active or passive as they choose. The investor will defer to the expertise of SRG to ensure that the asset is operating at its peak potential with an understanding that we have a vested interest in the property to maximize the rental income and minimize the expenses from the property for ALL parties.
You have several options available to you:
a. Pool your funds with several investors.
b. Returns will be distributed based on percentage of contribution
c. Each investor is a managing member of the LLC that owns the property
d. LLC Operating Agreement governs the relationship between the investors.
If you leverage your purchase, at closing you will need your full down payment amount, repair costs, the SRG acquisition fee, and the full closing costs. Closing costs are generally between 3-5% of your property purchase price.
If you’re making a cash purchase, you will need the full acquisition price, repair costs, SRG acquisition fee,
inspection costs, and the title fees. Total inspection costs are generally $600-700 and title fees are usually between $1500-$2000 total.
As with any investment there is an inherent risk and chance of gain and/or loss. Our investors acknowledge that
the SRG cannot make any guarantees or promises with regards to gain and/or loss. However, because we are able to acquire all of our properties at such a deep discount, we are able to offer up these properties to our investors at wholesale prices. As such, there is intrinsic equity in the property and potential steady appreciation from market recovery.
There are several mechanisms put in place to protect all parties’ interests and these are also dependent on the manner in which a property is purchased. All rental property purchases are governed by the Rental Property Partnership Agreement which outlines the relationship between the Operator (SRG) and the Investor. Additionally, when the property is purchased by an LLC, an Operating Agreement is in effect between all the parties. We advise you to consult with an attorney for detailed legal advice.