APEX Capital Group: Rental Transaction Overview
APEX Capital Group is the operator in all of these transactions, responsible for procuring the properties and conducting all necessary due diligence. This includes:
1. Analyzing all the financial aspects of each property for both a cash purchase
2. Conducting all inspections including: radon testing, underground storage tank sweeps, and home inspections
3. Working with the township to obtain certificates of occupancy and smoke certification.
As closing nears, APEX Capital Group coordinates with attorneys, sellers, agents, title, and insurance to close the property. Upon closing, ACG works closely with the property management company to ensure all aspects of the property are taken care of including, project management for renovations, marketing for tenants, vetting and placing of tenants, collecting deposits and monthly rent, cash control and banking, conducting inspections of the property and making recommendations to enhance net operating income.
FREQUENTLY ASKED QUESTIONS
How do you locate/acquire these properties?
Through our extensive marketing campaigns, networks of real estate professionals, and years of expertise, we are able to identify properties before they are available to the general market. As such, we are able to acquire them at deep discounts.
Who owns the rental property?
The investor owns 100% of the property. There are several methods of structuring the purchase including:
1. Purchasing it under a newly formed LLC (usually a cash purchase)
2. Purchasing it under the investor’s personal name (usually a leveraged purchase)
3. Purchasing it under the investors IRA account using retirement funds
What services does ACG provide?
ACG acts as the operator in this transaction, responsible for procuring the properties and conducting all necessary due diligence. We will assist you in conducting all inspections and coordinate the parties involved including: seller, attorneys, title companies, property management team etc. ACG does not function as the partner’s personal accountant, lawyer, or financial advisor.
How involved do I need to be?
This is at the investor’s discretion and they can be as active or passive as they choose. The investor will defer to the expertise of ACG to ensure that the asset is operating at its peak potential with an understanding that we have a vested interest in the property to maximize the rental income and minimize the expenses from the property for ALL parties.
I don’t have the full funds to purchase a property in cash. What are my options?
You have several options available to you:
a. Use the cash you do have as a down payment on the house and leverage the remaining balance through a mortgage.
a. Pool your funds with several investors who are your friends/family.
b. Returns will be distributed based on percentage of contribution.
c. Each investor is a managing member of the LLC that owns the property
a. Pool your funds with one other family member or friend.
b. Leverage the remaining amount through a mortgage.
c. Each investor is a co-signor on the loan and each investor is co-owner on the deed of the property.
How much money will I need to close?
If you leverage your purchase, at closing you will need your full down payment amount, repair costs, the ACG acquisition fee, and the full closing costs. Closing costs are generally between 3-5% of your property purchase price.
If you’re making a cash purchase, you will need the full acquisition price, repair costs, ACG acquisition fee,
inspection costs, and the title fees. Total inspection costs are generally $600-700 and title fees are usually between $1500-$2000 total.
Is there a risk for loss on these purchases?
As with any investment there is an inherent risk and chance of gain and/or loss. Our investors acknowledge that
the ACG cannot make any guarantees or promises with regards to gain and/or loss. However, because we are able to acquire all of our properties at such a deep discount, we are able to offer up these properties to our investors at wholesale prices. As such, there is intrinsic equity in the property and potential steady appreciation from market recovery.
What governs the relationship between ACG and the investor?
There are several mechanisms put in place to protect all parties’ interests and these are also dependent on the manner in which a property is purchased. All rental property purchases are governed by the Turn-Key Income Property Agreement which outlines the relationship between the Operator (ACG) and the Investor. Additionally, when the property is purchased by an LLC, an Operating Agreement is in effect between all the parties. We advise you to consult with an attorney for detailed legal advice.