Commercial real estate assets like apartment buildings and self storage operate independently of the stock market. In fact, they tend to fare better in recessions, because more people tend to downsize. They also tend to be safer investments than single family homes because if one tenant moves out, you still have the others to pay down the mortgage.
While we do extensive research to ensure that we are presenting you with an extremely solid investment, with strong positive cash flow and with tremendous potential for appreciation, it is still possible that you may experience the loss of some or all of your investment capital. Further, there is no guaranty that the Property will generate sufficient or any cash to allow the Company to make distributions to its members.
Just like investing in the stock market, mutual funds and other investments, the potential of losing your investment capital must be considered. However, unlike the stock market, your investment is not liquid and you may not be able to sell your investment except at such time as the Company may allow it.
Further, you have no management control of the Company, and therefore, cannot compel the Company to make any disbursement or take any other actions (e.g., sell the Property).
Though we believe that we are presenting an opportunity where the risks usually associated with real estate investment have been appropriately assessed, there are factors beyond our control that could adversely affect the asset and your investment capital.
Examples of factors beyond our control are market crashes, natural disasters, acts of Congress that radically change the investment landscape, acts of terrorism that affect either the property or the financial stability of the economy or both, and others unmentioned or unforeseen here.
That said, our business team takes all the appropriate measures to purchase adequate insurances and do thorougher data driven analysis of all the risks before making investment decisions.
Although these possibilities are highly unlikely, they also must be confronted in making any investment, and Majestic Investment Group would be remiss if we did not discuss them upfront so that you as a private investor can consider them in your decision.
All the potential risks are clearly specified in the PPM document or Private Placement Memorandum.