PLEASE BE AWARE THERE ARE VARIATIONS FROM PROPERTY TO PROPERTY
The cap rates are generally in the 7% - 8 % range which is consistent with national rates for investment quality property.
The actual annual cash income paid to the investor is from 7% - 8% depending on property and structure. This income is after operating expenses and debt service.
The investors own and control the property. Rental income increases and sale profits accrue to the investors.
Rental income is paid in monthly or quarterly installments.
The ownership structure may vary by property and is contained in the property information package.
The tenant in common structure allows investors to have deeded real estate ownership in larger, more stable, properties than would otherwise be possible.
Ownership in tenant in common property is an excellent source of dependable investment income.
The full property appreciation accrues to the investors. This appreciation is separate, and in addition to, the net rental income paid to the investors.
Most properties are offered with underlying financing in place which provide leverage to the investor. For example an investment of $100,000 with 50% loan to value (LTV) financing will own $200,000 of property. The property appreciation will be based on the $200,000 ownership position. A 5% annual appreciation rate would result in the original investment increasing 10 % per year, (5% of $200,000 = $10,000 - $10,000 is 10% of $100,000.)
Mortgage payments, (debt service) are paid directly from operating income and before distribution of net rental income. The 7 - 8% income is truly, "net" to the investor.
It is projected that the investors will find the Sourcenet investment experience to be so profitable that they will continue to reinvest with Sourcenet.
Mortgage amortization accrues to the investor and is taxable to the investor. The actual mortgage payments are paid directly by the property management firm from the gross rental income. The cash on cash investor income is calculated after debt service is paid. The projected 7-8% is truly “net” to the investor.
Mortgage interest remains deductible to the investor.
The Tenant in Common Investors own the property and make the decisions about when to sell and at what price.
Professional property management is in place and is subject to review and cancellation by the investors.
Upon sale of the property the investors receive their full proportionate share of the proceeds. The proceeds are eligible for 1031 tax deferral.
Sourcenet Financial believes the investment experience will be highly profitable and that the investors will register their appreciation by continuing to reinvest.
One projection is that the combination of conservative leverage and high quality properties will result in a substantial increase in investor equity in a three to five year timeframe. At that time investors may elect to sell, take their gain, and reinvest thus compounding their investment.
The other projection has investors deciding to hold the property and enjoy rising rents with the resulting increase in net income.
In either projection, decision making remains with the tenant in common investors; they own the property.
Sourcenet Financial Corporation believes in long term investor relations. The way to achieve that is to provide investors with high quality profitable investments. Let us show you our way.
