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Am I buying an interest in FlexTIC or a specific property? Each property in FlexTIC's "inventory" is originally owned by an affiliated limited partnership that is selling a "piece" of the property (an undivided interest) to an investor to be owned as tenants-in-common (TIC) with other co-owners. You are buying a percentage interest in the specific property in the proportion that your investment has to the total value of the whole property (i.e. an investor who buys a $1 million TIC interest in a property with a $5 million total value, will own an undivided 20% interest in the property).
Can I be assured that the property will be available when I want to buy it? As with the purchase of any property, the only assurance is a contract to purchase the property. You cannot "reserve" a FlexTIC interest. However, the "inventory" structure of FlexTIC increases the likelihood that the size of an investment in a particular property will be available to identify within the 45 day ID period.
Is there a chance that FlexTIC's purchase of the property will not be completed, putting my exchange at risk? Properties offered by FlexTIC are already owned, removing this risk of losing an exchange because the sponsor does not complete the acquisition.
Do I have to hold an investment for a minimum period of time? There is no specific holding period required to qualify for an exchange, simply that the property be held for use in a trade or business or held for "investment purposes." This is determined by the investor's intent at the time of the acquisition, taking into account all facts and circumstances, one of which will be the length of the holding period. How quickly can I close on my FlexTIC purchase? If a loan is not required the close could take place extremely quickly, within several days. We expect loan approval to take less than 30 days and hope it to be completed in less than 20 days. What if I want to stay in the investment? FlexTIC retains a "call option," giving it the right to buy an investor's interest at anytime after 6 months ownership. Thus, you cannot be assured of retaining ownership, however, FlexTIC will strive to satisfy all investor's goals and objectives. What is the economic risk of the investment? The FlexTIC investment is an investment in real estate and carries with it all of the risks and benefits of any real estate ownership. There are no guarantees, and there cannot be any in order to qualify as a "like-kind" exchange. A description of the risks associated with the investment is included in the complete Offering Memorandum. Will I make a profit on the sale of the FlexTIC interest? Again, there are no guarantees or forecasts of the future value of any particular property. However, the quality and lease structure of the FlexTIC properties as single-tenant, long-term triple net leased properties, have been selected to offer a real estate investment that is more stable and predictable than many other types of real estate. How is the purchase price calculated on the exercise of the Call Option? In accordance with the IRS guidelines, the call price is at Fair Market Value. Formal, professional, third-party appraisals will be performed on a regular basis on each property. If the parties do not agree on the valuation in the appraisal, a methodology, common in the real estate industry, is used to determine value. The procedures are all disclosed in detail in the purchase and co-ownership documentation.
How does FlexTIC earn a fee? The affiliated limited partnership that sells the TIC interest will be paid a fee at the end of the investor's ownership, upon the close of the repurchase of the interest in accordance with the call option. The fee structure is also disclosed up front with all of the transaction documentation. Affiliates of the selling limited partnership may also earn a fee pursuant to property and asset management agreements (as well as other real estate services) with the property ownership.
Will my investment have cash flow? Each property and each investment will have its own economic structure that may or may not produce cash flow. Although no guarantees are made, the FlexTIC structure allows investors with lower debt ratios to structure a transaction that will produce a positive cash flow. The economics of each investor's particular investment are easy to evaluate before an investment decision is made.
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