Frequently Asked Questions
Q: Can you tell me more about your Syndication Model?
A: Our model allows us and our investors to be on par with other larger institutions -allowing us to realize the same advantages while leveraging each others’ money. For a passive investor, this means no additional work but all of the benefits of owning real estate.
Q: What markets do you currently invest in?
A: We are currently in the Texas & Carolinas market and are looking to expand into Florida.
Q: What type of asset classes do you invest in?
A: A & B Class with 200+ Doors and they can range in value – depending on the vintage (age)
Q: What is your criteria for investing?
A: We look for markets experiencing Job Growth; Population Growth as well as those with Low Crime, Higher than average Income and that are Landlord Friendly; Primarily the Sunbelt Region.
P: ¿Cuál es su criterio para invertir?
A: Buscamos mercados que experimenten crecimiento laboral; crecimiento de la población, así como aquellos con bajo nivel de delincuencia, ingresos superiores al promedio y que son favorables a los propietarios; Principalmente la región del cinturón solar.
Q: How do you get notified of deals?
A: At Blacksteel Investment Group, we count on great relationships with our brokers that give us insight into both on and off market deals, which is the primary vehicle by which we purchase deals.
Q: How long do you typically hold the property?
A: We underwrite for 5 years though dependent upon the market conditions we may sell it early or hold it longer. Typical time frame is 3-5 years.
Q: How much is the minimum to invest for a potential investor?
A: This is highly dependent upon the deal size but on average between $50,000 and $75,000 is enough to get started!
Q: How soon after the subscriptions are open are you fully subscribed?
A: Our experience has been that for a $16-20M raise – we are usually fully subscribed within a short 48-72 hour period.
Q: What happens if I miss an opportunity to invest during the open subscription window?
A: We are continually on the lookout for future investments and try to give our investors as much notice as possible when we have a deal in the pipeline. To be sure to not miss an opportunity, please contact us at [email protected] and confirm that you are in our Investor Community database.
Q: What is a typical return on an investment?
A: The return is dependent upon the class but on average we have seen that investors with Blacksteel Investment Group receive an approximate return between 18%- 22% average annualized return on their investment. Typical total return is double your money in approximately 5 years. This is based on historical performance which does not indicate or guarantee future performance.
Q: How risky are the investments?
A: At Blacksteel Investment Group, we make every attempt to mitigate the risk for our investors. This entails conservative underwriting as well as scrutinizing the deal closely to ensure that it meets all of our investment criteria. We also make sure that general partners involved in every deal are vetted.
Q: What is the worst case scenario?
A: If there isn’t enough cash flow to pay the debt there would be a capital call.
Q: What happens then?
A: Depending on the group, some sponsorship teams will assume that risk and front the capital until the deal cash flows properly again.
Q: As an investor, what type of reporting am I entitled to?
A: By way of our Property Management Reports, we provide fully Transparent Financial Reporting – on a Monthly basis.
Q: What about value-add properties?
A: We only purchase properties that have a value add component (which means that we can invest in the property to increase the value and ultimately the return for our investors).
Q: What is NOI?
A: NOI stands for Net Operating Income We can increase the rent and decrease the expenses to maximize the NOI.
Q: What is Organic Rent Growth?
A: Organic Rent Growth refers to the increase in rent that is caused by a high demand and low supply of properties. This is determined by the market.
Q: Can you take me through the typical deal process?
- Once a deal has passed our initial screening and it is deemed a potential investment property, we at Blacksteel Investment Group are responsible for submitting the Letter of Intent, or LOI.
- Once the LOI is accepted, our legal team negotiates the contract and this process takes between 1 and 2 weeks.
- Once the contract is agreed upon, within a period of 7-14 days, we engage our Due Diligence Team who is responsible for reviewing and inspecting the property. This review culminates with a Due Diligence Report.
- Potential Investors that are already part of our Investment Club, will then be sent an Executive Summary, potential interest form and the timeline on what’s next.
- Shortly thereafter, the Subscription Window is open on a first-come, first-served basis!!
- Potential Investors then have up to 72 hours to wire in their funds at which point, they can become limited partners.
- Once we are fully subscribed and we close on the property, (approximately 6 months after the deal closes), investors begin to receive quarterly or monthly distributions via ACH deposits directly into the account from which they made the initial investment.
STILL HAVE QUESTIONS?
Got a question? We’d love to hear from you. Send us a message and we’ll respond as soon as possible.