Frequently Asked Questions

A group of people sitting in rows holding papers.

Who can invest?

Hammer Capital Group deals are typically open to passive investors as a Private Placement, meaning the deals are 506(b) offerings and cannot be publicly marketed. Potential investors should make contact with us as soon as they become interested in learning about multifamily real estate investing. In order to participate in a deal, investors must be either a Sophisticated Investor or an Accredited Investor.

What is a Sophisticated Investor?

A Sophisticated Investor is someone who is knowledgeable about real estate investing and the associated risks, and who is able to make informed decisions about investing. You can become a Sophisticated Investor by learning about multifamily real estate, even if you have no background in real estate.

What is an Accredited Investor?

There are a number of ways someone can qualify as an Accredited Investor, but the most common are based on either income or net worth. To qualify based on income, the investor must have made $200,000 individually or $300,000 jointly with a spouse during each of the past two years, and have a reasonable expectation of making at least that amount again this year. To qualify based on net worth, the investor must have a net worth of at least $1,000,000, excluding their primary residence.

What is the timeline for investing in a deal?

Hammer Capital Group is continuously vetting deals to find the best opportunities for investors. When a deal is secured, investors have the opportunity to review the deal and ask questions during a live webinar call. The timeline for signing paperwork and submitting funds is usually 2-6 weeks. Funds are due before the property Closing.

What is the minimum investment amount?

The recommended investment amount is $100,000, to give you preference among other interested investors. There are sometimes limits to the number of passive investors allowed. However, the minimum investment to participate in a deal is $50,000.

Can I invest with retirement funds?

Yes. You can move funds from a 401k to a Self-Directed IRA, and invest in a deal through the IRA. The IRA will receive all distributions and profits.

How long am I committed to the investment?

The investment commitment is for the lifetime of the deal. Most deal exits are 5-7 years after the start of the deal, depending on the specific business strategy for each property.

Who owns the property?

The LLC owns the property. The General Partner and Limited Partners own shares of the LLC.

What paperwork do I have to sign to be part of a deal?

The main documents are the Private Placement Memorandum, the Subscription Agreement, and the Operating Agreement for the LLC that owns the property.

What are the risks?

As with any investment, there are risks associated with multifamily real estate investment. Returns are not guaranteed and the return of initial investment cannot be guaranteed. Hammer Capital Group does not offer legal or financial advice, and you are encouraged to consult your attorney and tax accountant when considering investing.

What do I need to know to file my taxes?

Hammer Capital Group provides a Schedule K-1, which you will use when you file your taxes. Depreciation can often exceed distributions received, so you may not owe any taxes on your deal income that year. You will owe capital gains taxes when you receive your profit from the sale or refinance. This is not tax advice, and Hammer Capital Group does not provide tax advice, so you should consult your tax accountant.