Frequently Asked Questions
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 15
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.
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
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.
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.