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How It Works

Average millionaires have 7 streams of income through various businesses and investments. Wealthy people manage risks by never putting all their eggs in one basket. By working with Majestic Investment Group, you would get opportunities to diversify your investment portfolio and generate passive income stream for your family.

Business Strategy adopted by Majestic Investment Group

Step by Step walk through of how business strategy works

End To End Property Cycle

  • In Step 1, we locate value add or mis-managed commercial real estate properties by using our vast network of relationships.
  • In Step 2, thorougher due diligence is performed viz. financial audit of expenses and rent roll income, roof inspection, mold / termite and lease audits.
  • In Step 3, get the property under-contract arrange the private equity through our high net worth individuals and debt financing. 
  • In Step 4, boots on the ground team of asset managers are appointed to oversee the day to day operations.
  • In Step 5, after successful execution of the business plan in 3-5 years the asset is liquidated and process are distributed to the investors. 

Majestic Investment Group's Multifamily Strategy

Multifamily is a lucrative asset class and a must add to every investors investment portfolio. We acquire underperforming multifamily real estate assets that are in select submarkets. These are properties where we can add value through capital improvement programs, rehabilitation, professional property management, and repositioning.

How to Invest in Commercial Real Estate?

Concepts covered: Investing concepts | Vision / Mission | Cash flow | Forced appreciation of capital => Duration 20 Minutes.

 

Frequently Asked Questions

A syndication is simply a pooling of resources, whether time, money or otherwise.

 

 

An accredited investor is someone who meets certain requirements regarding income and net worth, based on Securities and Exchange Commission (SEC) regulations. This is so that the SEC can ensure proper protection for all investors.

To be an accredited investor, you must satisfy at least one of the following:
1. Have an annual income of $200,000, or $300,000 for joint income, for each of the last two years, with expectations of earning the same or higher income this year.
2. Have a net worth exceeding $1 million, not counting your primary home.
 
While most of our investments are available to accredited investors only, we do offer a few investments for non-accredited/sophisticated investors.
 
Majestic Investment Group is SEC compliant and strives conduct business in transparent manner.
 
Before even investors are matched up with suitable investment opportunities, we thrive to build quality long-term substantial relationship.

As a passive investor, you just invest your money, then sit back and start receiving returns. No need to worry about tenants, termites, or toilets. Passive investors do NOT have to get their credit check nor do they provide any personal / income guarantee for the loan. In other words the liability or risks to your personal assets is none. We take care of all that and provide you regular updates.

While the minimum investment can vary, the typical minimum is $50,000.

Investors can typically invest using their cash savings or retirement funds. 

Many investors are not even aware of the fact that their 401k or IRA funds can be self-directed into alternative investments such as real estate syndications.

Majestic Investment Group can connect you with its affiliate providers for solo 401k and self directed IRA.

Click the button below to set up a consultation and get started.

 

Most projects plan for a 3-5-year hold, so you should plan to have your money in the investment for at least 5 years.

During this time, you will receive regular cash flow returns, but your initial investment cannot be withdrawn.

That being said, we know that 5 years can be a long time, and life happens. If a major life event happens and you need out, we will do everything in our power to help you get out of the investment.

Cash on cash returns are paid out throughout the lifecycle of each investment. You will also receive a portion of the profits from the sale of the asset at the end of the project. 

The current investments distribute cash flows quarterly with direct deposit to investors bank accounts.

 

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.

Majestic Investment Group is headquartered in Silicon Valley (San Francisco Bay Area), California.

However, based on personal Single Family investment experience and studying the market dynamics it makes most sense to buy Multifamily Investments outside of california, for the following reasons:

  1. High state income taxes
  2. Tenant friendly eviction laws: it can take up-to 6 to 18 months to legally evict tenants, while you carry the burden of loan payments or even foreclosure. 
  3. Rent control laws only allow rent bumps in the range of 5-7%.

Therefore the focus is on purchasing multifamily properties in the markets with landlord friendly laws and no rent control.

Majestic Investment Group currently owns multifamily properties in following markets:

  • Phoenix, Arizona
  • Houston, Texas
  • Melbourne, Florida

Strategy is to not buy in backyard but to make wise business decisions where the numbers make sense. 

Absolutely 100% legal. Group investments or syndications are legal mechanisms to pool resources together for larger purchases and to drive economies of scale. 

Investors are provided with all necessary paper work and documentation created by syndication attorneys. Documents such as Private Placement Memorandum (PPM), Operating Agreement, Subscription

Definitions:

PPM: 

A Private Placement Memorandum (PPM) is the document that discloses everything the investor needs to know to make an informed investment decision prior to investing in a Regulation D Offering. Unlike a Business Plan the PPM details the investment opportunity, disclaims legal liabilities and explains the risk of losses.

Operating Agreement:

This is the actual legal operating agreement for the proposed entity and it puts the more descriptive information in the PPM into legalese. Every LLC must have one operating agreement. 

Subscription Agreement:
 
A subscription agreement is an investor's application to join a limited partnership. It is also a two-way guarantee between a company and a subscriber. The company agrees to sell a certain number of shares at a specific price, and in return, the subscriber promises to buy the shares at the predetermined price.

Investors are highly recommended to consult with their legal, tax and financial advisors before making any investment decisions. 

Just because your friends/relatives have not heard or have no knowledge about such investments, it does not make them invalid.

We suggest you gather more knowledge from the right sources and ask us for past project documents and performance track record.

According to the SEC (Securities and Exchange Commission) private placement market was $2.9 trillion in 2018, while public offerings (IPOs) accounted for only $1.4 trillion of new money during the same year.
 

Syndications are structured as LLCs. 

When you are an equity holder in an LLC, and you have a profits interest, you will receive a pro rata share of the entity’s profits and losses. This means you will be allocated a portion of whatever tax strategy the entity is utilizing. When an LLC files its tax return, it will claim all of the income and deductions and then issue you a Form K-1. That K-1 will be used to prepare your personal tax return and report your share of the entity‘s profits and losses.

This is a common point of confusion as clients will receive $50k in distributions but the Form K-1 they receive shows a passive loss. In this example, the investor would not pay tax due to the loss reported on the K-1 even though they received $50k in distributions. These distributions would instead lower the investor’s basis in the entity and be considered a return of capital.

Advanced tax strategies such as depreciation, cost segregation and bonus acceleration are applied to give their benefits to passive investors.

Please consult your personal CPA and tax advisor as each persons income and tax situation is unique.

 

Passive investors are also known as Limited Partners (LPs) and management team is also known as General Partners (GPs).

Ideally, all deals should be structured which incentivize both the LPs and GPs, building a win win model.

  1. Profit Split: 

    Depending on the type of LP compensation structure, the general partnership may earn a portion of the remaining profits after the preferred return is distributed. Typically, 70/30 split (70% LP and 30% GP).

  2. Acquisition or Due Diligence Fee: 

    The acquisition fee is an upfront, one-time fee paid to the GP at closing. The acquisition fee ranges from 1% to 5% of the purchase price, depending on the size, scope, experience of team and profit potential of the project.

    Think of the acquisition fee as a consulting fee paid to the GP for putting the entire project together. It is a fee that pays the GP for their time and money spent on market research, creating a team (lawyers, CPAs, real estate brokers, etc.), finding the deal, analyzing the deal, raising money, securing financing, performing due diligence and closing.

  3. Asset Management Fee: The asset management fee is an ongoing annual fee paid to the GP in return for overseeing the operations of the property and implementing the business plan. The asset management fee is either a percentage of the collected income or a per unit per year fee.
  4. Refinance Fee: 

    A refinancing fee is a fee that is paid to the GP for the work required to refinance the property. 

  5. Guarantee Fee: The guaranty fee is typically a one-time fee paid to a loan guarantor at closing. The loan guarantor guarantees the loan. The GP may bring on an individual with a high net-worth/balance sheet to sign on the loan to get the best terms possible. Or, the GP may sign the loan themselves.
  6. Construction Fee: 

    The construction management fee is an on-going annual fee paid to the company overseeing the capital improvement process. If the GP has a hands-on role in the renovation process or if the GP has their own property management company, they may charge a construction management fee.

Above are ways in which the GPs or management team is compensated. Each deal can possibly be structured differently, above example fees listed are just for illustration purposes.

 

 

 

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