Answers to Our Most Frequently Asked Questions
These frequently asked questions cover the most common concerns from first time investors. If you have a question not covered on this page, feel free to contact us directly. We are a transparent operation with values based on integrity and reliability. Our Investor friends can reach us any time and for any clarification. WE ARE A 100% S.E.C. COMPLIANT COMPANY AND ADHERE TO ALL THEIR FEDERAL RULES AND REGULATIONS. We want every prospective investor to be confident that they understand the pro’s and con’s of any specific type of investment. In that way you can be assured that you’ve received all the information necessary to make a sound investment decision.
Can I be guaranteed I will get my money back?
* NO, as in most investments there are no guarantees. It is considered illegal by the S.E.C. (Securities and Exchange Commission) to describe any investment as “guaranteed”. The Private Placement Memorandum document, will explain in a section listing “risk factors”, that under unusual circumstances it is possible for the entire investment to be lost.
* To lose all of your investment, all of the tenants would have to move out and completely destroy the property. We perceive this risk to be very minuscule. Our role is to manage all assets we acquire, this way we are dealing with the property and seeing it perform with full care. We take immediate actions and strategize to reverse any negative trends we see.
* The advantage of our type of investment is you become very knowledgeable about the risks before investing. We provide Private Placement Memorandum, Operating Agreement, Subscription Booklet along with the latest Profit & Loss, Rent Rolls, Property Brochure, Due Diligence Documentation, Lease Audit reports, Executed Sales Contract and more. We will let you see documentation on the profit history of the specific asset you would be investing in, what the current issues are, how we intend to resolve them and the specific plan and anticipated returns. Your investment is secured by the property itself, which is also covered by insurance to mitigate physical damage risks. We insure the property for loss of rent during rebuilding and carry full replacement cost insurance policy on each property.
* The only way to get a completely risk free investment is to choose a treasury bond…with its low level of return.
How long will my money be needed?
* Typically we intend to hold properties between 5-7 years; however, duration of time is based on the specific property and plans for improvement of operations. We generally advise investors to expect at least a 3-5 year period.
* Each property has an anticipated rate of return. Our strategy may be to hold the asset for a certain period of time OR until we hit a specific appreciation hurdle. The first of these two factors will cause us to sell the property and payoff our investors with available proceeds.
Can I come in as Capital Partner with my friends and Relatives?
Yes, we welcome that. At any given time we are underwriting/evaluating 3-5 properties that we have got from our strong relationships with brokers. Several are pocket listings, arriving before they hit the open market and other competing investors. We offer the PPM (Private Placement Memorandum) with a New Entity that we form with our company as the managing member.
How many other investors will be in the deal with me?
* Each acquisition is unique, depending if there is existing financing in place, whether the current owner will be carrying back financing, etc. Depending on the scale and value of the asset, most deals will include between 3 and 20 investor partners.
* If you would like to solely invest in an asset and have funds to do the full acquisition, and prefer to be the only investor in a deal, we would be glad to locate a property that fits your criteria. We do the underwriting/evaluation along with due diligence and assign the purchase contract to you for a fee and/or become a small partner and also manage it for you.
Will I be involved in the day to day management of the property?
* No. The property management services are contracted out with qualified companies or done in-house depending on the property location. The managing partners of LeRu Investments have property management experience and manage many properties owned by us and our current investors and clients. LeRu Investments flows down our procedures and practices while we oversee the property management company and execution of the improvement plan.
* We hold regular conference calls to update investors of the status of the investment project and returns. We hold a monthly Investor call for the first 4 months after purchasing a property and quarterly conference calls after that. We send out the executive summaries and the financial reports every quarter. We are very approachable by our investors. Our track record and knowledge keep our investors returning to invest more money in our new acquisitions.
* We are always willing to discuss any issues or concerns on an individual basis with specific investors.
Can I use my retirement funds in this type of investment?
* Yes. Self- directed IRA’s can invest in real estate tax free.
* IRA and 401K funds are rolled over into a self-directed IRA account. An intermediary called the custodian directs funds at your specific directions. There are several self-directed IRA organizations and we have working history with some of them that have helped clients. We’ll be happy to advise you on how to transition your funds into one of these custodial accounts.
If this list of frequently asked questions has not fully addressed your question, submit a contact request on our Contact us page, add your question in the comments field and Omar Ruiz or Jeffrey Spindler will reach out to you and answer your question(s).