For every project, the distribution frequency will be clearly defined in the PPM or Operating Agreement, but are typically sent quarterly via ACH after we close out the quarter.
The typical investment minimum in our deals is $50,000. However, we try to reserve a few slots in the deal as low as $25,000 to give people opportunities that have lower liquidity.
No. Real Estate investments are highly illiquid and cannot be cashed out the way stocks or other liquid investments can be.
We typically underwrite a 5 year hold period for multifamily investments. However, we may also refinance out 40-100% of the investor’s capital after a period of time (typically 2-3 years). This can depend on the type of deal, current lending conditions, and asset performance.
Please see the definition of an Accredited Investor by the SEC here.
A K1 is a document similar to a 1099, you will receive one per investment, and is an accounting of the tax income for the year.
K-1 forms are typical in partnerships and real estate ownership. It is not uncommon for a K-1 to show a “paper loss” despite having received cash flow from distributions. These paper losses can help investors reduce their taxable income. Talk to your CPA about how K-1 losses from real estate investments can help reduce your taxable income.
Our CPAs prepare our K-1s, and we make every effort to make them available to our investors before March 15th, barring any significant unforeseen circumstance.
We are currently focused on value and hybrid-yield deals. We underwrite, tour, and make offers on dozens of investment projects before we secure a deal that meets our criteria. Our goal is to deliver an 80-100% return on capital investment at a minimum for our investors over five years.
For example, if an investor contributes $100,000 of capital in a deal, we want to return that initial capital plus another $80,000 – $100,000 return on the capital. Our goal is to double your money in five years or less.
Depending on the deal, we also want to be able to produce 7-10% cash on cash returns, paid quarterly. On a $100,000 investment, an 8% annual cash on cash return would be $8,000/year, or $2,000 paid quarterly.
After closing, we send regular email updates on operations and renovations. We aim to send these updates monthly. We also send a Quarterly Investment Report, which includes profit, loss, and rent roll. Distributions are sent quarterly via ACH or check.
Since we typically issue 506(b) offerings, we do not generally solicit or advertise securities, and the SEC requires us to have a pre-existing relationship with you before you can be an investor with us. If you do not have an existing relationship with Dry Ground Capital, we will need to have a discussion with you so we can get to know you and your goals better before you sign up as a new investor. Please go to the Contact Us page if we have not established a relationship yet.
If we have established a relationship and you need to sign-up to be notified about any deals we begin pursuing, please do so at the New Investor page.
Since we are typically issuing 506(b) offerings, we are allowed to have up to 35 non-accredited investors on a project, provided that we have a pre-existing, substantive relationship with that investor, and they are considered a Sophisticated Investor.
Yes. Investors can invest through an entity. A common example is investing through an LLC or a Self Directed IRA so that an Investor can gain access to retirement funds without paying any penalties. Depending on the complexity of managing the financials when using custodian, we may not allow qualified retirement accounts for some deals.
Additional vetting of members or operating agreements of an entity may need to be completed when using an LLC or Trust to ensure all members meet the deal’s criteria and that interests cannot be transferred while the deal is still in operation.