Open Source Capital’s Managing Director, Kyle Meyer, states "re-entitlement is complicated. We try to make it accessible to more people. Our 'Equity Plus' program is a convenient way for accredited investors to participate"
(PRWEB) October 06, 2015
Many properties being offered are currently in private sales discussions with developers or commercial tenants, while going through the permitting and approval process. Property owners often make substantial returns by re-entitling their property to a higher use, however the re-entitlement process can be expensive. To pay for the process owners can sell a preferred equity interest in the property. For example, if a property is valued at $1m and the mortgage is $400k, an investor(s) could payoff the mortgage on the property and in return become a preferred equity holder with a 35-45% equity stake in the deal. When the primary owner sells the property, the investor receives their initial capital back with a preferred return of 4-5% p.a., plus his or her portion of the appreciation. The primary "non-preferred" owner is the managing member of the entity owning the property and is responsible for the expenses of owning and completing entitlement of the property
For the Primary Owner:
Retains an ownership interest in the property
Maintains full management rights
Eliminates debt (mortgage) and preserves his or her equity ownership interest in the property
May extract equity without taking on debt
For the Investor:
Gains ownership of real estate that might not have been available without using debt.
Invest in debt free property
Invest without the headaches of property management
Take advantage of bridge loans becoming due in a credit constrained market
May receive monthly rental payments from existing tenants
May receive capital gains treatment on the profit
Open Source Capital identifies, analyzes and issues commitments to fund real estate developers seeking financing for their projects. Once a project has been vetted and approved for funding by Open Source Capital, the project is posted on http://www.opensource.finance a platform that facilitates MarketPlace financing via the internet.
NOTE: “The JOBS ACT” relaxed the advertising rules on private financings, extending companies' reach and breaking down barriers that hindered investors and companies from dealing directly with each other.
With over 25 years of experience in finance and real estate development, Open Source Capital can assist both new and experienced accredited investors in reaching their investment goals.
For more information email: kmeyer(at)opensourcecap(dot)com or call: Kyle Meyer: 954-650-6798