Teal Equity

Why Multi Family?


Using a Cost Segregation study, tax experts separate all of the assets involved with the asset, such as physical structures and land improvements. This allows for accelerated depreciation to provide benefits to the investor. Starting in 2023, bonus depreciation will be reduced by 20% until it is no longer available in 2027.


With the passive investing approach, you can free up your time to focus on what you want to do with your time. Let us help you free your time by carrying the burden of time spent operating the asset. Multi Family is much more scalable than single family.


The latest pandemic has caused instability in the stock market, cryptocurrency, and retail/office commercial real estate. Multi Family commercial real estate has shown to be a resilient investment through these times.


Unlike some other assets, you are gaining equity in an asset you can touch, visit, and see with your own eyes. Our Value Add strategy helps build equity with increasing monthly income through capital improvements to the asset.


Teal Equity is a multi family investment group here to help busy professionals find financial freedom by investing in apartment complexes. We are focusing on Class B and C assets in the San Antonio, TX market.

If you would like to schedule some time with us to discuss questions, ideas, or anything else, please use the scheduler below to book time with us to meet.


What is a Syndication?

A Commercial Real Estate Syndication is a collection of investors who are pooling resources together to purchase a large asset that would otherwise be out of reach for those investors independently. This is all possible due to Rule 506(b) and Rule 506(c) of Regulation D.

Rule 506(b) allows for investors to work together to purchase larger assets. Before the JOBS act, this would require to get SEC approval through a lengthy, costly process. By the time that process would have completed, there is no way you would have been able to buy the property in time.

Enacted in 2012, the Jumpstart Our Business Startups Act, or JOBS Act, is intended, among other things, to reduce barriers to capital formation, particularly for smaller companies. The JOBS Act requires the SEC to adopt rules amending existing exemptions from registration under the Securities Act of 1933 and creating new exemptions that permit issuers of securities to raise capital without SEC registration. On July 10, 2013, the SEC adopted amendments to Rule 506 of Regulation D and Rule 144A under the Securities Act to implement the requirements of Section 201(a) of the JOBS Act. The amendments are effective on September 23, 2013

Section 4(a)(2) of the Securities Act exempts from registration “transactions by an issuer not involving any public offering.” Rule 506(b) is a rule under Regulation D that provides conditions that an issuer may rely on to meet the requirements of the Section 4(a)(2) exemption. One of these conditions is that an issuer must not use general solicitation to market the securities.

Source: https://www.sec.gov/info/smallbus/secg/general-solicitation-small-entity-compliance-guide.htm
More information: https://www.sec.gov/oiea/investor-alerts-bulletins/ib_privateplacements

What Is an Offering Memorandum?

"An offering memorandum is a legal document that states the objectives, risks, and terms of an investment involved with a private placement. This document includes items such as a company's financial statements, management biographies, a detailed description of the business operations, and more."

This document is typically used as marketing material and can range from 20-50 pages long. This is created by the general partner group.

Source: https://www.investopedia.com/terms/o/offeringmemorandum.asp

What is a Private Placement Memorandum?

"A Private Placement Memorandum (PPM) is a securities disclosure document used by a company (issuer) that is engaged in a private offering of securities. A PPM serves as a single, comprehensive document outlining the material details about the offering."

This document is typically used as the fully detailed description of the investment plan and can range from 90-125 pages long. This is drafted by an attorney.

Source: https://www.foster.com/newsroom-publications-white-papers-elements-private-placement-memorandum-real-estate

Am I an Accredited Investor?

The SEC defines what is an accredited investor on their website: https://www.sec.gov/capitalraising/building-blocks/accredited-investor

Net worth over $1 million, excluding primary residence (individually or with spouse or partner)Income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year

Can I use my 401k to invest in a Syndication?

You can use options like Self Directed IRA or Solo 401k for investing retirement funds in real estate. Many 401k providers from current employers allow for rollover while still employed, but you will need to check with your 401k custodian.

What is an LP or a GP?

LP is short for Limited Partner, also known as a passive investor.

These partners are passive investors and have no responsibilities outside their financial contribution.

GP is short for General Partner, also known as a Sponsor.

These partners are responsible for sourcing, acquisition, rehabilitation, stabilization, and sale of an asset.

What is a typical hold period?

Many Syndication groups aim for a 5 year maximum hold period. Sometimes an asset is able to go full cycle earlier than predicted. You should always assume your funds will be locked in for the full term.

What is a typical investment amount?

Many Syndication groups have their minimum investment criteria set to $50,000.

Can I pull my money out of an investment early?

Liquidity of funds in a Syndication are dependent on the Private Placement Memorandum(PPM). If you have concerns with liquidity of your investment, you need to review this with your sponsor group to determine if it is possible to sell your shares during the hold period. This can vary between assets.

You should not invest funds which you are going to need to rely on within the expected hold period.

How is a fund different from a Syndication?

Commercial Real Estate Funds allow for equity distribution over multiple assets which provides diversity in your investment. At the same time, this also reduces your control over which assets you are investing in. Typically there is a target range for Preferred Return, IRR, and ARR. This makes sure that the investor is able to confidently trust their money is going to an asset they would normally have been interested in. These numbers are based on projected assumptions, but the General Partner group should have a track record which supports their ability to perform.

These funds are typically open to new investors for a 12 month period due to limitations in place by the SEC. You can see some of the limitations on the SEC site. https://www.sec.gov/education/capitalraising/building-blocks/private-fund

We work hand in hand with attorneys who work specifically with these funds so that we make sure to meet all SEC requirements.