How do I get started investing with Precision Equity?
What type of accounts can I invest with?
We currently can accept investment funds from personal investment accounts, joint accounts, and certain entity accounts (Trusts, Limited Liability Companies, Limited Partnerships, C Corporations, and S Corporations). For more information on IRA accounts, see below.
Can I invest with my IRA?
You can use your IRA or 401K to invest with as long as it is self-directed and you are the custodian of it. You will start by calling the group your IRA or 401K is with and telling them you would like to self-direct as a custodian and that you would like to invest into real estate. We will handle it from there.
What is a K-1?
As a partner in the LLC that purchases the properties, you will receive a K-1. 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. 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.
How do we report to the IRS?
You will get a K-1 as a partner in the real estate to file with your personal tax return. This gives you all of the advantages of being a partner in the real estate. Our goal is to finalize all K-1s by March 31st, however, we do rely on outside reporting and may require additional time to furnish the forms in a way that is to the investor’s best advantage. Accordingly, you may be required to obtain one or more extensions for filing federal, state and local tax returns.
What is an accredited investor?
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 of the equity owners are accredited investors.
Do I have to be accredited to invest with Precision Equity?
Yes. Our offerings under Regulation D Rule 506(c) are available to accredited investors only. Please register at https://investors.precisionequity.com/how-to-invest. There are a few exceptions to this rule. In some of our offerings we are able to offer investments to a limited number of sophisticated investors who do not meet the requirements to be an accredited investor. Please contact us to see if you qualify.
Can I invest if I live in another state or country?
Yes. As long as you have a United States Tax ID for the entity you will be investing with as well as a bank account within the US, you can invest with Precision Equity.
How long is the term of the investment?
Precision Equity goes into most investments planning to hold them for 5-10 years. Each investment is unique. Depending on many different factors and conditions, Precision Equity will do what is best for the individual investment.
Does Precision Equity invest its own money?
Absolutely. Precision Equity is normally the largest investor on every deal we buy. We buy properties because we want to add them to our personal portfolio. Once we identify properties we want to own ourselves, we then offer them to investors so they can share in the benefits of the deal.
Who is responsible for the debt?
Precision Equity is responsible for the debt. No investors will ever have to sign on debt.
When will I get distributions?
You should expect your first distribution after the first full quarter of the investment. We pay cash flow distributions quarterly.
What are the risks involved?
As with any investment, there are always risks. It is important to always do your own due diligence to ensure any investment is a good fit for you. Precision Equity spends considerable time underwriting and evaluating every deal we go after. We will always do everything we can to mitigate risk. All real estate investing is speculative in nature.