FREQUENTLY ASKED QUESTIONS
WHO CAN JOIN?
Because syndications are group investments, we believe that the more our members have in common, the more stable the investment will be. So, before we invite you on as a member-partner, we would like to speak to you personally. If we all agree that our interests align, you will be welcomed as a new member-partner.
It depends on the current offering. We do have an existing LLC that you share proportional ownership in all the properties currently in the asset pool, as well as all properties acquired in the future for that pool. So, as the portfolio takes on new acquisitions, your investment is continually being diversified. We also have individual property offerings. Contact us to see what is currently available.
CAN I INVEST IRA FUNDS?
Yes. We have the details, but essentially, with a self directed IRA you can own Real Estate. Log on to: www.trustetc.com (Equity Trust Company) for more information.
IS MY INVESTMENT LIQUID?
Unforeseen personal situations may require an investor to liquidate his/her holdings. The LLC has funds set aside to allow investors to redeem their units. This is spelled out in the Private Placement Memorandum.
WHO DECIDES THE VALUE OF THE UNITS WHEN AN INVESTOR WANTS OUT?
Every year we use a market approach appraisal to determine the current fair market value of the properties.
HOW MUCH OF MY INVESTMENT IS TAKEN OUT IN FEES?
Safari Partners takes no fees up front. All of your money is working for you from day one. Should it be offered by the seller, we take a sales commission, normally 2.5% of the purchase price. This compensates us, and frees you from up-front fees. We do have a 4% marketing fee used to raise investor funds. All our incentive fees, disbursements, commissions etc. are disclosed in the Private Placement Memorandums.
DO YOU EVER MAKE CASH-CALLS THAT REQUIRE UNITHOLDERS TO INVEST MORE MONEY?
No. There will be no cash calls. If a project requires additional funds at a later stage, we will offer a new block of units. Alumni members would have first option to purchase them.
WHAT HAPPENS IF THE PROPERTY BURNS DOWN?
Our properties have “lost rental income” insurance coverage which, in case of fire or other damage, would cover the lost rental income while we re-build, enabling us to keep paying the mortgage. We also have full liability coverage. The management company is also bonded and has their insurance in front of ours.
DO YOU KEEP IN TOUCH WITH YOUR MEMBER PARTNERS?
We keep members informed monthly. They receive a complete operating statement on each property and a brief explanation of the developments at each property.
WHAT WILL MY ACCOUNTANT NEED TO DO?
At tax time you will receive a K-1 form. This form shows members share of income, deductions, credits etc. regarding your investment. All your accountant will have to do is plug the information into the appropriate space on your tax return.
WHAT CAN GO WRONG?
In the apartment business, the central problem is not making the mortgage payment. The value of an apartment building can go up or down, but if you keep making the loan payments, you can hang on. Should we not be able to make the loan payments, the bank gets back the property.
When Safari Partners purchases an apartment investment, we typically put down 15% to 25% in partner’s equity. We factor in a 5% vacancy factor, and the bank factors in about a 7% cushion. This means we can run a 12% vacancy factor before we have a problem. If this occurs we would use funds from our reserve account to make mortgage payments. If all else fails and we cannot make the payments, the 2nd T.D holders would take the property and operate it absorbing the original partner’s equity.
This can and does happen, however, at Safari we have never experienced this, and happily so. Should the property revert back to the 2nd T.D. investors, the equity partners are wiped out. Should the 2nd T.D. investors be unable to sell or operate the property and the bank takes it back, Steve Nauert, the managing partner, has personally signed for the bank loan and the bank looks to his assets for recovery.
HOW DO I BECOME INVOLVED IN A SAFARI PARTNERS LLC?
At this point you may still have some questions. This is your chance to get them answered and get to know us at the same time. When you are ready, call Steve Nauert at 310-493-1999 and arrange a time to speak to him or a time to meet in person. Steve Nauert, the LLC Managing partner will answer your questions personally.