Investor FAQs

What types of accounts can I invest through?

You can invest as an Individual, an Entity, Trust, or IRA Account.

What is a Class A vs. Class AA investor?

  • Class A is a traditional investor, these investors will receive a 10% preferred return per annum (often referred to as a ‘pref’). This is for anyone investing less than $250k for the calendar year 2021, or anyone who invests after the 60-day cutoff period.
  • Class AA is for investors who invest $250k or more during the first 60 days of the inception of the fund. These investors will receive an 11% preferred return per annum for the calendar year 2022 and then 10% preferred return per annum thereafter.

What type of tax documents will I receive?

As an investor, you will receive a Form K-1 each year, after each year-end. This K-1 will be how you report this investment to the IRS.

Who can help me with further tax or legal advice?

Always ask your personal financial advisor, attorney, and accountant for advice relating to tax positions. We do have partnerships with several attorneys or CPA’s we can get you in touch with.

Can I invest outside of the US?

Yes, you can invest from outside the US. Please consult with your legal professional, as there are certain disclosures for every country that will need to be reported to us and the IRS.

How long is the term of the fund?

The Fund’s initial term period is 7 years, we hold the right to extend the Fund for up to another 3 years after the 7- year period expires.

What is a preferred return?

A preferred return (often referred to as a ‘pref’), in the sense of this fund, means that investors in the Fund will be the first to receive returns of 10% of their invested capital. This 10% does not reduce your capital account regarding “return of capital”. It works like “interest” but in the form of a partnership distribution.

As an example, if you invest $100K into the Fund, your annual preferred return will be $10K (10% x $100K = $10K). This will either be paid to you monthly at the rate of $833.33 per month ($833.33 x 12 months = $10,000 per year), or it will be accrued and paid out of future profits.

After the investors receive their preferred return, the returns from each investment are split to the investors and Fund on a 50/50 basis.

What type of investment returns should I expect?

We are anticipating a 22-28% IRR. Included in the IRR noted above, we are anticipating paying distributions during the investment hold period that we are estimating to be as high as 13% per annum.  We are anticipating that the preferred return to be in cash (after the initial 3-6 months of investment, but remember, if not paid, the preferred return will accrue and be paid first from future profits).  Therefore, we are anticipating your cash returns to be at least 10% during each investment hold period, and based on profits of each investment, we are anticipating distributing further profits that could reach as high as 10-13% (In aggregate) each year.

What is the minimum I can invest?

The minimum investment for this fund is $50,000.

What is IRR and how is it calculated?

Internal rate of return (IRR) is a method of calculating an investment's rate of return. It takes into account an investment's overall returns, including but not limited to net cash flow, distributions, and proceeds from capital events, such as a refinancing event or sale. Put simply, it measures the actual achieved return that is produced by an investment over the invested time period. This makes it an effective indicator of the profitability of an investment.

For a full definition of IRR, read this article.

What fees do you charge?

We have assessed the industry landscape and have set our fees to align the Fund with its investors, and believe that the following fees are competitive, if not below market, and should assist in garnering higher IRRs for investors.

  • 1.5% Acquisition Fee (One Time, Fund Level)
  • 1.0% Disposition Fee (One Time, Fund Level)
  • 1.0% Guarantee Fee (One Time, Fund Level)
  • 1.0% Capital Under Management Fee (Recurring, Fund Level)
  • 6.5% Property Management Fee (Recurring, Property Level)
  • 3.5% Asset Management Fee (Recurring, Property Level)

How is Patriot Fund 1 Performing?

Patriot Fund 1 is performing above expectation. We have already produced a 15.68% Cash-on-Cash Return in Year 1 for our investors (well above the mandated preferred return). Additionally, we have successfully cleared $1M in profit from our disposition events and already returned 3.3% of investor initial capital, in addition to paying our 10% preferred return.

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