Robinson Capital Group
Frequently Asked Questions
What is a K-1?
As a partner in the LLC that purchases the properties, you will receive a K-1. A K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income. Partnerships are generally not subject to federal or state income tax, but instead issue a K-1 to each investor to report his or her share of the partnership’s income, gains, losses, deductions and credits. The K-1s are provided to investors on an annual basis so that each investor can include K-1 amounts on his or her tax return.
Am I an accredited Investor?
An accredited investor, in the context of a natural person, includes anyone who:
- earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year,
- has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence)
On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period, in which case the person may satisfy the threshold on the basis of joint income for the years during which the person was married and on the basis of individual income for the other years.
In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:
- any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or
- any entity in which all of the equity owners are accredited investors.
In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
What are your target markets?
RCG’s strategy is to generate superior risk adjusted returns by assembling a diversified portfolio consisting primarily of value-added multi-family and boutique office assets. We intend to accomplish this goal by acquiring assets located in attractive sub-markets of seven core metropolitan areas: Atlanta, Charlotte, Durham, Greensboro, Houston, Raleigh and Washington DC (collectively, the “Target Markets”).
When should you expect your first distribution?
45 days after closing you can expect your first distribution (note:This only applies if the property is cash flowing and not new development)
What are the risks involved?
Real estate investing can be lucrative, but it’s important to understand the risks. Key risks include bad locations, negative cash flow, high vacancies, and problem tenants.
What is the typical deal size you work with?
RCG intends to primarily acquire boutique class B and better properties that range in size from $1 million to $30 million. We believe that assets in this size range have superior return potential with active management but tend to be overlooked and under-managed by large, institutional owners.