THE MATH

Investors come to us for customized solutions to assist them to better understand and objectively analyze investment opportunities as they seek to achieve higher returns for their family's financial resources.

Private Placements, involving multi-family properties, which are structured as private investment partnerships, represent a common asset class that our clients use to build wealth.

The partners in such real estate partnerships are entitled to know the approximate economic benefits they may receive before investing.

THE CHALLENGES

Real estate partnership investing poses unique challenges to today's sophisticated investors and financial advisors. The investment community acknowledges the potential of real estate partnerships to satisfy a broad range of individual financial objectives and provide superior returns compared with other investment forms.

However, matching partnerships with financial goals and picking specific investments, which will deliver superior performance, is becoming increasingly difficult and time-consuming.

Beyond sheer numbers, Real Estate Private Placements ("REPP’s") pose unique challenges due to their relative complexity. They can provide a variety of benefits (tax shelter, current income and capital growth) at different times and in varying proportions.

REPPs invest in a broad spectrum of real estate assets with unique risks and returns: office buildings, apartments, shopping centers, condominiums, mini-warehouses, hotels, motels, mobile home parks, land, participating and nonparticipating mortgages, federally insured mortgages, etc.

COMPLICATIONS

Unlike typical stock, bond or mutual fund investments, each partnership is a uniquely structured agreement between investors (passive or limited partners) and the manager of the business (syndicator, sponsor, lead partner, general partner).

The investor's share of the profits is defined by complex terms and conditions, which are often difficult to analyze. You must assess, not only the economic outlook for the industry and management's skill (as with stocks and bonds), but also the impact of the profit-sharing arrangements within the partnership.

Assessing the sponsor's management skills is more difficult for partnerships than it is for corporate investments. Required financial reporting is on a "historic cost" basis, which does not reflect the market value of the partnership's assets. Even where information is provided, meaningful industry-wide standards do not exist, which makes valid comparisons almost impossible. Learning and confirming how management has performed in prior partnerships is often no small task, and requires the investor to interpret and standardize dissimilar data.

NEVER forget that, investing in real estate partnerships ultimately involves an act of faith in the business venture and the syndicator. Furthermore, partnership investment decisions are all too often made one-at-a-time, not with a view toward their overall impact on net worth, retirement goals, or the overall composition of the investor's assets.

We feel that real estate investing is most productive when executed in the context of an investor's total financial and estate planning requirements.