Frequently Asked Questions (FAQs)
What do I acquire when I invest in Charter Real Estate & Development?
When you invest with us, you’re buying LLC shares. Think of it as buying stock in a company. Your share percentage is calculated by dividing your invested sum by the total amount we’re raising. For instance, a $50,000 investment in a $1,400,000 offering gives you a 3.57% stake.
Is Charter Real Estate & Development’s contribution treated differently?
Absolutely not. Our capital is treated the same as every other investor’s capital.
How can I invest?
The process is straightforward and online. Hit the “Invest” button, sign the agreement, and either wire transfer funds or send a check to our secure escrow.
Through which account types can I invest?
There are multiple options: Individual, Joint, LLC, Corporation, Partnership, Retirement Plan/401K, and Trust.
When and how do I get my principal back?
Your capital is returned when we either sell the property or refinance. If sold, you get your principal plus any profit. If refinanced, you get your principal but still retain company interest.
What happens during a property sale?
Firstly, all investors receive their contributed capital back. After that, any profit is split between us and the investors based on the Operating Agreement.
Can I withdraw before the property is sold or refinanced?
Your investment isn’t highly liquid, meaning you can’t just cash out. If you need to sell due to an emergency, we have the first right to buy. If we approve, we’ll try to find another investor to buy your stake at its original value, minus a $300 fee for related expenses.
Does Charter Real Estate & Development claim any of our investment?
No. Your investment remains 100% yours until the property’s sale or refinancing.
How long do the investments last?
Generally, 10 years. However, we might extend or shorten this term to optimize property value based on market conditions.
What returns can I expect?
We aim for low- to mid-teens annual returns for stable property investments. Returns can vary based on risk and type of investment. Remember, all investments come with risks, and actual returns can differ.
When are the profits shared?
Depending on your investment type, either monthly or at least annually. Factors like property cash flow and capital expenditure needs can influence this.
Are there tax benefits for investors?
Yes, as we’ll be writing off property depreciation and other related business expenses, which will reduce your taxable income.
Who controls the partnership?
The manager holds primary decision-making power. However, some decisions will require a majority vote from the investor members.
Are investors liable for partnership actions?
No, you only risk your investment amount. The partnership operates through a limited liability entity, and the manager is accountable for the company’s actions.
What’s the worst-case scenario?
The most significant risk is losing your investment. The operating agreement has provisions allowing investors to vote out the management if necessary. We recommend reviewing the Risks of Investing section for details.
What’s IRR?
We project two returns: Cash on Cash Return (CoC) and Internal Rate of Return (IRR). CoC is annual rent income, while IRR includes rent income and property sale profit.
How is my investment protected?
Your investment grants you ownership in a real estate-holding company. Your rights, including profit-sharing and capital return, are secured in the company’s operating agreement.
What tax documents will I receive?
Every tax year, you’ll get a Schedule K1 by March’s end.
How are state taxes managed?
We cover state taxes for all investors. Depending on your residence, you might be able to deduct these from your state income tax. It’s best to consult your tax advisor.
Can I use retirement funds to invest?
Absolutely, with a popular method being a Self-Directed IRA.
If I invest via a Self-Directed IRA, does UBIT apply?
Please consult your tax expert. However, if property acquisition involves a loan, UBIT is likely applicable.
Does this investment qualify for a 1031 exchange?
Unfortunately, no, our investment structure isn’t compatible with 1031 exchanges.
How is the property insured?
Policies can vary, but we typically have comprehensive coverages, including general and umbrella liability and full property coverage. Deductibles usually range from $5,000 to $10,000.
How can I reach out to Charter Real Estate & Development?
Drop us an email at jn@charter-development.com or call 81-820-2887.