Frequently Asked Questions
At Revilo Property Group in Tampa, we know you have questions when it comes to real estate investing. We’ve worked with countless clients over the years, and we’ve had every question imaginable asked about 401(k) investing, 1031 exchanges, and more. We’ve compiled our most frequently asked questions on this page, and we hope the answers provide you with some insight into how you can invest in real estate through partnerships or syndication, as well as how our team can help you make the right decision regarding your investments. Contact us today to learn more!
General Questions
A trust may be accredited if it has assets in excess of $5 million and its purchases are made by a sophisticated person. While entities such as an LLC, corporation, or LP may be accredited if it simply has assets in excess of $5 million.
If the trust or entity does not meet the minimum assets test, it might also be able to qualify as an accredited investor if all of its equity owners are accredited investors.
- 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
Multifamily is recession resistant because it is a necessity and an essential need in any economy, that is less sensitive to vacancy than other real estate assets. People will always need somewhere to live. Paper assets are very susceptible to inflation and could result in a zero value, as with real estate, especially income producing, it will always hold a value. Historically, multifamily real estate has always done well in a recession. Of course, this would all be speculation if there weren’t data. Fortunately, the data available indicates multifamily real estate can endure a recession better than its counterpart assets.
A 2018 study by NMHC evaluated the different classes of commercial real estate against each other during the five recessions between 1980 and 2016. They found that in terms of raw return, volatility and the Sharpe Ratio of risk evaluation, multifamily real estate outperformed all other classes of commercial real estate in all three metrics on hold periods of one year or longer. If past performance is a predictor of future success, all the evidence is on the side of multifamily assets to do comparatively well during a recession.
Other than initially completing the required documentation, sending funds, working with our custodian to set up your solo 401k, or reporting for your 1031 exchange if required, the answer is simply yes.
Our clients are able to own real estate without any of the heavy lifting that goes into it. Revilo’s team continually searches the country for the best opportunities, underwrites the asset, determines the value-add strategy, interviews and hires the most suitable property management company, works with lenders to negotiate the best terms for the project, works with contractors to get bids for the value-add renovations, and works with multiple insurance agents to get the best pricing. Then we implement the strategy and continue to manage the asset.
We provide quarterly updates on the company, and property-specific updates, through our Appfolio portal. All distributions are made automatically. With AppFolio, investors can track their investments, and receive updates as well as future offerings.
The simple answer is yes. If an investor has the ability to bring all of the funds required for a project. A typical property will have multiple investors so is structured as a syndication, and a 506C offering.
This is quite an expensive process, and by avoiding all the costs associated with this, there are more favorable structures that we can use. Whilst this does mean more ownership and better returns, it can also require, more work on the front end with documentation.
AppFolio Investment Management is our CRM platform that allows us to tracks investments & communicate with our investors all in 1 place. Investors have on-demand access to a performance dashboard that summarizes investment positions, asset information, and capital invested and distributed. It also allows us to store your specific reports and documents to your account.
When you contact us, you can simply ask your questions or concerns and one of our team members will typically respond within 1 business day. If you request the call or zoom feature when you contact us, please be sure to fill out what the call is for and we will determine the best person for that call. If you would like to speak with someone specifically, please state that at the time of booking.
Yes, anyone can invest with us. We do however recommend consulting with your own country regarding tax implications in regard to your investment. We do have accountants in the US well versed in international Tax law that we are more than happy to connect you with, to help determine the most efficient tax structure for you.
401(k) and IRA Investing
If you want to learn more about investing in real estate through your 401(k) or independent retirement account (IRA), we’re here to help!
Yes. Once converted to a Self Directed 401k IRA, a common method of diversifying is to invest the plan in physical real estate such as family homes, commercial real estate, and farmland, for example. While investing a self-directed 401k in real estate is allowed under the IRS regulations, specific rules apply including not using the property for personal or business use, for example
Please fill out the contact form, stating the question and we will connect you with Scott Maurer, our expert at Advanta IRA. They know everything that there is to know, and will be able to get your questions answered.
1031 Exchanges
1031 exchanges can come with a lot of complexities. Our team is here to help you make sense of them!
A 1031 exchange is a swap of one real estate investment property for another that allows capital gains taxes to be deferred, basically a tax break. You can sell a property held for business or investment purposes and swap it for a new one that you purchase for the same purpose, allowing you to defer capital gains tax on the sale.
A 1031 exchange allows you to continue to use your profits to re-invest, building your wealth.
Proceeds from the sale must be held in escrow by a third party, then used to buy the new property; you cannot receive them, even temporarily.
The properties being exchanged must be considered like-kind in the eyes of the IRS for capital gains taxes to be deferred.
If used correctly, there is no limit on how frequently you can do 1031 exchanges.
Firstly, In order to qualify for a 1031 exchange, you must use a qualified intermediary/exchange facilitator from the very beginning of the process. You are unable to take control of the proceeds of the sale of your old property and use them to purchase your new one. Instead, your exchange facilitator must hold the funds on your behalf and use them to secure your like-kind property.
You must re-invest all cash proceeds from your sale
Ideally, you should ensure that you use all cash proceeds from your sale in your new investment. Your new property should also be equal to or greater in value than your relinquished property. That said, it is possible to qualify for a 1031 exchange when purchasing less than you have sold although doing so is not without consequences. Your exchange facilitator can advise you what these would be.
The 45-Day Rule:
Once you have sold your old property, you will have 45 days during which to purchase your replacement property or provide a list of potential properties that you are considering for your 1031 exchange. There is no way of extending this period and there are no exceptions to this 45-day rule. If you choose to present a list of potential investments, this should meet several criteria, including:
• Specifying the exact property and its address so that an auditing IRS agent could find and assess its suitability for a 1031 exchange.
• A maximum of three property options
• The list must be provided in writing to your exchange facilitator
The 180-Day Rule:
For a transaction to qualify for a 1031 exchange, you must have purchased your chosen replacement property within 180 days after the closing of your relinquished property. If you provided a list of potential properties to your exchange facilitator, the purchase must be one of those listed. Again, there are no extensions to the 180-day rule and there are no exceptions granted.
IRC § 1031(a)(2) specifically provides that real property held primarily for sale does not qualify for tax deferral under section 1031.
Following are examples of qualifying properties that could be exchanged:
• Raw land or farmland for improved real estate
• Oil & gas royalties for a ranch
• Fee simple interest in real estate for a 30-year leasehold or a Tenant-in-Common interest in real estate
• Residential, Commercial, Industrial or Retail rental properties for any other real estate
• Rental ski condo for a three-unit apartment building
• Mitigation credits for restoring wetlands for other mitigation credits
Under IRC §1031, the following properties do not qualify for tax-deferred exchange treatment:
• Stock in trade or other property held primarily for sale (i.e. property held by a developer, “flipper” or other dealer)
• Securities or other evidences of indebtedness or interest
• Stocks, bonds, or notes
• Certificates of trust or beneficial interests
• Interests in a partnership
• Choses in action (rights to receive money or other property by judicial proceeding)
• Foreign real property for U.S. real property
• Goodwill of one business for goodwill of another business
Please fill out the contact form, stating the question and we will connect you with Dave Foster, our expert at ERG 1031. They know everything that there is to know, and will be able to get your questions answered.
506 B & C Offerings
506 A & B offerings must be handled in specific ways. At Revilo, we can help you navigate this process.
506 (B & C) offerings are a type of securities offering that allows companies to raise money from accredited investors. In order to be eligible to participate in 506 (B & C) offerings, investors must meet certain criteria set forth by the Securities and Exchange Commission.
Rules 506(b) and 506(c) both fall within Regulation D of the Securities Act. Rule 506(b) involves a private placement of securities and can be sold to up to 35 sophisticated, non-accredited investors, whereas Rule 506(c) offerings can be offered to anyone but only sold to accredited investors.
Whilst we must abide by strict SEC rules, the main benefit of these offerings is that it allows us to raise capital from a larger pool of potential investors, which we sometimes need to do on larger acquisitions. Additionally, we are also allowed to publicly advertise our opportunities.
Contact Us today!
We hope this page has helped you find the answers to your real estate investment and portfolio questions. If you have any further questions, please contact us right away!