FREQUENTLY ASKED QUESTIONS
Our deals are structured as syndications. A syndication is a type of structure where large apartment complexes are acquired by pooling money from passive investors (limited partners). The general partners (active partners) take care of the management of the business such as researching the multifamily assets to make sure it meets our criteria, performing the due diligence , financing with the lenders, executing the business plan and managing the asset from acquisition to disposition.
An LLC is formed for every new acquisition. For example, If we purchase “Apartment Complex A”, our LLC may be named “Apartment Complex A, LLC” and this single purpose entity owns the asset.
All investors own their pro-rata share of the apartment asset LLC. There is no risk for the passive investors (limited partners or LP’s) beyond their initial investment. The limited partners are not responsible for the loan. The loan risk rests on the general partners and key principals involved. The general partners operate through a different entity which assumes all the responsibility of the asset LLC.
Per SEC regulations, our investors must be accredited. Prior to investing, our investors will be sent a private placement memorandum (PPM) and a subscription agreement. If our investment serves their portfolio strategy, the investment process occurs via a secure online portal.
Distributions are made on a quarterly basis.
Our ultimate goal is for capital preservation, quarterly distributions, capital improvements, appreciation and eventual liquidity via a sale, refinance or a 1031 exchange. The usual time frame for an exit is either prior to or once the loan matures (5-7-10 years), depending on the maximized value of the appreciated property. During this hold period, our objective is to distribute to our partners on a quarterly basis while the property continues to appreciate in value. This will vary depending on the economic and market conditions.
Yes, an IRA or 401(k) may be rolled into a self-directed IRA. These self-directed IRA’s can accumulate tax-free. These are handled by an intermediary called a custodian which directs the accumulation of distributions at your direction. There are strict restrictions so this must be run by your CPA or tax advisor to make sure this fits your investment strategy.
In order to invest with Axon Equity, LLC, our investors must be accredited. What does this mean?
Net Worth exceeds $1,000,000 (not including primary residence)
Income exceeds $200,000 Individually EACH of the last two years and a reasonable expectation of the same level of income in the current year
Income exceeds $300,000 Joint with Spouse EACH of the last two years and a reasonable expectation of the same level of income in the current year