How we operate
Five winning characteristics of the best investments.
- 1. Provide steady income across business cycles
- 2. Appreciate in value
- 3. Secured by real collateral
- 4. Offer protection from inflation
- 5. Tax advantaged
At CIG, LLC, we believe the one investment that meets all of those requirements and that should be a part of any investment portfolio is multi-family rental properties. Our business is making profitable multi-family investments available to qualified investors through transparent, single-property limited liability corporations. With CIG, investors know precisely what they own, the health of the development’s market area, and the financial performance of their property from acquisition to disposition.
Benefits of multi-family ownership as an investment.
A multi-family development is an apartment complex, condominium or townhome community that provides rental housing for individuals and families. At CIG, we target multi-family developments with 50+ units that market to middle-income residents – the individuals and families who make up the largest segment of the rental market. Our ideal investment is located in an area with positive economic and demographic trends, including growing population and job opportunities.
Multi-family developments provide economies of scale.
These properties are less expensive to build, maintain and professionally manage than individual rental properties. Marketing, security and maintenance costs tend to be lower per unit. By maintaining high occupancy rates, multi-family units offer the ability to cash flow across business cycles.
Leverage can turn a good investment into a great investment.
CIG acquires multi-family developments utilizing up to 80% financing, 20% investor equity. In addition to the favorable interest rates available to real estate investments, investor returns on the down payment, closing costs and other out-of-pocket costs, are leveraged. If a property appreciates 10% over five years, the potential return on the initial investment could be 50%, significantly greater than the 2% average annual return on the purchase price.
Real estate values are less volatile than other investments and offer a hedge against inflation.
While real estate values will vary over time, they are not as volatile as stocks, bonds, commodities and other financial assets, providing stability to the portfolio. As rental rates adjust to inflationary pressures, cash flow is maintained, supporting the value of the property.
Multi-Family advantage as commercial real estate.
Multi-family outperforms other commercial real estate classes – such as office, retail and industrial – in economic downturns, when demand typically increases. The management intensive nature of multi family projects also creates opportunities to increase values across economic climates.
Multi-family developments are real property, with the potential to appreciate in value.
Land is one asset that has a finite supply. We can’t easily create or find more. Developed land in desirable economic areas – the areas that CIG targets for investments – has traditionally increased in value in response to market demand. In addition, CIG seeks properties where there is an opportunity to put in place value-added improvements that increase occupancy and rental rates, forcing appreciation.
Real estate investments offer unique tax advantages.
Mortgage interest payments, property taxes, management costs and other expenses are fully deductible from rental income. In addition, investors can write off depreciation on the property. When the property is sold, taxes on appreciation and recaptured depreciation can be postponed indefinitely through a 1031 exchange into property(ies) of equal or greater value. If ownership in a single property LLC passes at death, the inherited basis will be the current market value, eliminating accumulated depreciation and the higher taxes depreciation recapture would incur upon the disposition of the property.
CIG is structured to optimize multi-Family acquisitions.
CIG acts in the capacity of Managing Member of each single-property LLC. As the Managing Member, CIG:
• Identifies desirable acquisitions by working with a team of industry professionals in our targeted market areas;
• Performs pre-purchase due diligence including contracting for professional property inspections, income and cost analysis, and evaluation of opportunities to optimize revenues;
• Negotiates acquisition financing including mortgage loans and equity financing from qualified investors;
• Creates a single asset LLC to acquire the property and manages the project through the closing;
• Hires professional management services to manage, maintain, and market the property and identify opportunities to optimize rental rates and cash flow to the investors.
• Provides monthly reports to the investors.
• Establishes and conducts the planned disposition process for property after a pre-determined holding period.
CIG was founded by John Beal to take advantage of the opportunities offered by multi-family housing units by enabling investors to purchase ownership of specific apartment complexes in areas with growing demand for housing. Our current focus is on acquiring properties in the emerging markets of the east coast region of the United States.
These properties offer investors significant opportunities to achieve:
1. Cash flow generated by rental income after expenses.
2. Inflation resistance through increasing rents and property appreciation common to high inflation environments.
3. Capital gains from the increase in the value of the property over time.
4. Leverage through financing up to 80% of the purchase price of the property.
5. Tax advantages including depreciation, business expense deductions, investing tax-free with self-directed IRAs, 1031 exchanges and more.
6. Non-correlation with stock and bond markets, providing true portfolio diversification.
Transparency and accountability are paramount.
Single-property, multi-family limited liability corporations give investors the opportunity to acquire ownership in specific properties with an established disposition time frame, providing planned liquidity. Through reports of the Managing Member, performance of the investment can be tracked from inception through disposition. The LLC structure also provides limited liability protection, pass-through tax treatment of profits and losses, and the ability to transfer property in and out of an LLC with minimal tax consequences.
CIG provides investors with a due diligence period in which to review the property and its financials and the planned disposition period, at which time investors could anticipate the return of their principal and long-term gains. Once the property is acquired and structured as an LLC, investors have access to monthly online financial reports, showing income and expenses and the financial status of the property. CIG, as the Managing Member, is available to answer investor questions on the individual properties and to provide further information throughout the investment life of the LLC.
Our Investors always come first.
At CIG, LLC, we pride ourselves on being fully accessible to each of our investors and realize that communication is an essential component of a strong, professional relationship. If you have any questions or comments, please feel free to contact us and we will be happy to assist you.
We also welcome inquiries about upcoming investment opportunities and the performance of our properties from prospective investors.