Equity Investment
Become a Joint Venture Investor and Start Earning Capital on Your Investment.
AmeriFirst Capital Group, LLC
Types of Equity Investment Opportunities
What Types of Equity Investment Opportunities does Amerifirst Capital Offer?
- Partnership Agreement
- Equal Ownership
- Equal Control
- Shared Responsibilities
- Profit and Loss Sharing
- Risk Mitigation
- Clear Communication
- Conflict Resolution
- Flexibility
- Exit Strategy
Benefits of 50/50 Joint Ventures
Benefits of becoming a joint venture capital investor with Amerifirst Capital Group
50/50 Joint Venture
Frequently Asked Questions
At the beginning, the JV investor & equity partner will own 100% of the development until the investor is paid back his entire equity investment back. The Developers ownership is subordinated to the Investor until the Investors are fully paid back their original investment.
The Sponsor or Developer’s percent of ownership guarantees (“is at risk”) the investors investment. This guarantee expires after the subordination is lifted.
After the investor receives all of his money back, the developer’s subordination is lifted or released. The investor then owns 50% and the Sponsor then owns 50% of the development.
Because the Investor (JV equity partner) receives 100% or all of the cash flow, there are no funds for interest on the equity.
Buy outs or sales of partnership interest are bought and sold according to the fully executed Memorandum of Understanding (MOU) or an Operating Agreement (OA).
Typically, one investor partner wants to buy and another partner wants to sell.
Our attorney can handle all the paper work.
Ownership and control are determined in the Memorandum of Understanding (MOU) or an Operating Agreement (OA) prepared by an attorney with experience with many other JV’s.
Agreements and decisions are made with a consensus from all parties. If necessary, a mediator can be retained to meet with all parties and help determine a consensus.
The profits and losses are distributed according to the fully executed Memorandum of Understanding (MOU) or an Operating Agreement (OA). At the beginning, the JV investor & equity partner will own 100% of the development until the investor is paid back his entire equity investment back.
After the investor receives all of his money back, the developer’s subordination is lifted or released. The investor then owns 50% and the Sponsor then owns 50% of the development.
At this point, the profits and losses are split 50%/50%.
- Central Florida Flex Space was built of concrete block and steel. The development has over 30,000 sf. The center leased up at a rate of 5,000 square feet per month without advertising. The development sits on 3+ acres.
- This development was built without preleasing.
- The lender’s loan amount exceeded all development and construction costs after the last draw.
- The Return on Investment (ROI) to the ownership is greater than 20% per year.
- The original ownership still owns this asset. The ownership is very satisfied with their double-digit returns. They have not had a vacancy in two years. They do not want to sell.
For more examples of Successful Development Joint Ventures please visit our Case Studies Page.
Outline of a vacant site transaction.
- Purchase price: $900,000
- Sale price of the entitled site after five years: $2,600,000
- Gross Profit: $1,700,000
- Return on Investment (ROI): 53%
Typical time to go from site selection to sale of the asset is three to five years. Do not hurry the process.
For more examples of Successful 50/50 vacant land Joint Ventures please visit our Case Studies Page.
Following is a short list of items that should be discussed among partners:
- Shared objectives, pursuit of a common goal
- The structure, governance and obligations.
- Financial contributions.
- Ownership of intellectual property, if any
- Disagreement or dispute resolution process.
- Leave or termination of the agreement.
- Details about how profits and losses will be distributed among members.
- Spell out what resources each party is to contribute.
All of the above is itemized in the fully executed Memorandum of Understanding (MOU) or an Operating Agreement (OA).
- Spend time visiting other flex space developments in the area.
- Walk the site now or after it is bush hogged.
- Walk the site of other flex space developments.
- Retain a commercial appraiser and become familiar with the following:
- Current rents for small bay warehouse
- Annual expenses from all costs
- Absorption rates of new small bay flex space
- Value, if any, to lay down space.
- Flex space commercial appraisal information: area rents, absorption & value at stabilization
- Self-storage appraisal information: rents, occupancy, cost, absorption, value & mix
- Apartment appraisal information: rents, occupancy, cost, absorption, value & mix
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