Frequently Asked Questions

To start a relationship, please schedule a call at https://calendly.com/dbacapitalgroup.

The call allows us an opportunity to connect and determine if and how to serve you best. It also helps us stay compliant with SEC regulations.

After that call, if we determine that there is mutual fit, you can expect to be added to our community events and complimentary educational content. You will also gain access to investment opportunities.

The full SEC definition of accredited investor is more comprehensive. However, as it applies to individuals investing in syndications it captures either individuals making at least $200,000 in gross annual income in each of the two most recent years (or joint income, with a spouse or partner, exceeding $300,000) or individuals with net worth (individual or joint) exceeding $1,000,000, excluding the person’s (couple’s) primary residence.

A sophisticated investor does not meet the income or net worth hurdles of accredited investor noted above; however, possesses business/finance/investment knowledge and experience to properly evaluate the risks and benefits of the investment.

An SEC-qualified client, defined under Investment Advisers Act Rule 205-3, is a high-net-worth investor authorized to pay performance-based fees to investment advisers. As of August 2021, they must meet at least one of these criteria: a net worth exceeding $2.2 million (excluding primary residence) or $1.1 million in assets under management with the adviser. The Commission will next adjust the
thresholds for the effects of inflation on or about May 1, 2026.

Yes. Please remember to contact your provider to ensure you follow their investment process and to obtain/complete the forms they require. Returns and distributions will be sent to the subject retirement account. Lastly, please ensure you consult with your CPA/tax advisor and retirement plan custodian about the tax treatment and reporting of such.

Minimums typically vary between $50,000 and $100,000.

Distributions may begin after the initial stabilization period, if projections materialize. Distribution frequency is monthly or quarterly. Depending on the deal structure and performance, distributions are comprised of the preferred return (if one exists) and pro rata share of profits. Cumulative distribution structure is most common but varies by deal. Cumulative means that missed preferred interest and/or distribution payments carry over to the next year and accrue over time.

Real estate syndicated investments should be considered illiquid, i.e. cannot be exited at a moment’s notice. If you are facing emergencies or extenuating circumstances, please reach out to us and we will determine if there are options we can work through. However, any such accommodation is rare, evaluated on a case-by-case basis, and cannot be guaranteed.

Passive investors are typically compensated first (however, always read the PPM to understand how the cash flow and capital waterfalls are structured for the particular deal). IF a refinance occurs and depending on the amount of refinance proceeds, your principal investment may be returned in part or in full. If returned in full, the preferred return will no longer apply after refinance. If returned in part, the preferred return thereafter will apply on the lower remaining principal balance only. Your pro rata equity share of the investment (and profits) does NOT change.

Usually the hold period is 5-7 years. Holding the property forever may be an option at completion of the business plan, should the management team and all passive investors agree to hold the property past the initially agreed upon hold period. This is not typical, however, as each individual investor’s liquidity needs and timing differs.

We focus on buying in the right markets and neighborhoods. We further identify properties with stable value add opportunities (see our prior discussion on the benefits of value add investing and how that can partially mitigate exogenous market movements). We underwrite conservatively with adequate cushion. We look to buy at the right price and with proper financing terms that match our business plan. We further vet the property management and deal team to ensure strong execution relative to the business plan.

Very often, particularly if the hold period is 3 years or more, the operators may elect to perform a cost segregation study to take advantage of the accelerated depreciation offered by the IRS (currently set at 100%). Such depreciation can help create paper losses, which can be either used to offset other passive income OR will accumulate over time and can be used to offset capital gains at the time of sale. As always, we would strongly encourage you to consult with your own tax advisor on your personal situation and tax deferral strategies.

We will provide the annual K1 report that your CPA will need in order to prepare your annual tax return. Annual K1 filings are typically due and distributed by each March 15^th. However, delays are possible. As such, filing an extension is recommended.

We like to have ongoing communication with our investors and encourage our investors to reach out to us when they have questions. Beyond that, we distribute monthly updates and quarterly financials and host periodic investor webinars. Having multiple touchpoints and communication modes keeps the communication channel open and ensures investors have various means to stay up to date on the performance of their investment(s).