We can accept investments starting at $10,000, however we suggest a minimum of $25,000 particularly for foreign investors to offset compliance costs such as tax filing and ITIN application fees.

Yes, you can use your IRA funds to invest in our properties. Your IRA must be self-directed, and you must be the custodian of your account. We advise you speak with the company holding your IRA regarding the specifics of this process.

A K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income. Domestic partnerships are generally not subject to federal or state income tax, but instead issue a K-1 to each investor to report his or her share of the partnership’s income, gains, losses, deductions and credits. The K-1s are provided to investors on an annual basis so that each investor can include K-1 amounts on his or her tax return.

An accredited investor, in the context of a natural person, includes anyone who:

  • earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
  • has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period, in which case the person may satisfy the threshold on the basis of joint income for the years during which the person was married and on the basis of individual income for the other years.

In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:

  • any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or
  • any entity in which all the equity owners are accredited investors. In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.

Yes. Our offerings under Regulation D Rule 506(c) are available to accredited investors only.

Absolutely, you can invest if you live in another state or another country. If you are a foreigner, you will need to have an ITIN and a US bank account to be able to invest.

Yes, all foreign investors must declare and pay state and federal taxes. The effective tax rate varies depending on the return earned but is typically 10% – 15% for non-U.S. residents. The LLC must withhold federal and state taxes based on the expected fiscal profits. These profits are low in the first 5-7 years as we use cost segregation studies to accelerate depreciation of some components of each building. Federal taxes are withheld for foreigners at 39.5% and state taxes at 4.63%. Foreign investors then get a refund of excess withholdings (if any) at the time they file their tax returns.

Trust in syndicators. As an investor, you are a limited partner in a commercial real estate deal. As such, you are fully passive, with all management decisions being made by the syndicator (sponsor). Therefore, trust in a syndicator, and a successful track record, is especially important when evaluating a deal.

Risk tolerance. Commercial deals tend to run the gamut of risk/reward. Low risk investments are typically stabilized assets that have conservative leases and tenants in place close to or at full occupancy. These are usually longer hold periods and are sometimes referred to as “mailbox money”, with a secure dividend check every quarter.

Desire for passive investments. As a limited partner investor, you take a passive role in the ownership of real estate commercial investments. Tepuy sets up full property management, handle taxes, finances, accounting, and an investor simply receives predetermined profit splits. It also has the advantage of limiting liability to the amount invested due to passive nature.

Cash flow vs appreciation. Lower risk deals tend to have more stabilized values but produce cash flow over long terms that help meet investor cash flow goals. Appreciation and value add deals can generate a large profit but take on more risk to attempt those objectives.

Typically, 8-10 years is the time when the loan interest payments and tax deductions are lowered, and it makes financial sense to divest the property. However, we keep a close eye on the market and opt for a shorter holdings period if it maximizes the return to the investors.

On average, cash on cash returns have been 8% and IRR upon sale of the property after a 10-year hold period 15%-17%. Of course, future profits are based on projections, but we expect Colorado to remain a very favorable environment for real estate investments due to its strong demographics.

Our model creates revenue while purchasing the buildings and all the details are handled, so investors simply collect quarterly checks. The owners of Tepuy Properties are also investors in each project, so we constantly work to create value and share in all the ups and downs.

Commercial properties on average have higher returns and higher risks. Their advantages are that you have higher quality tenants, longer term leases, and more predictable income. Also, most are NNN (triple net) which means that the taxes, insurance, and maintenance costs are passed on to the tenants.

Contact us in case you have other questions or require further information.