Frequently Asked Questions

AmeriCan has many distinctive advantages that have helped achieve superior results while mitigating risk. They have been in the Dallas market since 2010 and were early to identify the opportunities that Dallas has offered and continues to offer. The principles have invested in various aspects of real estate since 1990. They have weathered multiple up and down real estate cycles and have been successful due to their conservative approach.

Another huge advantage is that they self-manage to ensure that the property is being taken care of from an owner’s point of view. This also allows them to drive the mission to transform lives by creating a positive social and environmental impact in the communities they purchase. This equates to happy residents thus, higher returns for investors as residents stay longer on average which reduces turn over costs. Their extreme efforts towards sustainability lowers utility costs and teaches residents that they can each make a big difference in this overall effort.

Our mission is to achieve above average returns for investors while transforming lives by creating a positive social and environmental impact in the communities we oversee.

The past 10 years has taught us many lessons for the best ways to structure deals with our investors and ourselves as the General Partner. We realized an overhaul for the better was needed to create the best possible outcome for all stake holders. We now realize purchasing properties through a fund has multiple advantages. Let us begin with some significant advantages for our investors. Please keep in mind that each property purchased will be a single purpose entity that will be placed into the fund so they will have individual bank loans etc. The General Partners will invest their own capital as well as stated in the agreement.

Fund structure

Investor advantages in a fund: We have structured our fund so that we as the General Partner will not receive our carried interest until the 7% preferred return has been paid to our investors and 100% of our investor’s capital has been returned. We plan to have three to four properties in each fund so our investors will benefit from a “blended return from all of the properties”. This helps our investors realize we are truly aligning our interests.
General Partner advantages of investing with a fund: We will have enough capital raised in advance to go after great deals that need to close quickly and on time. When deals come up, a major question from the seller is “will this buyer actually close”. Our fund gives us an advantage when competing with other buyers.
Broker/Seller advantages when dealing with a buyer with a fund: Brokers and sellers will realize that we will close on quality deals that they bring to us with far fewer concerns than a competitor that does not have all of their capital raised in advance.

Financial waterfall structure of distributable cashflow:

100% of Investors initial investment returned

7% preferred return paid out to LP investors

80/20 split favoring our LP investors.

12-18% IRR 70/30 split favoring our LP investors

18+ IRR 60/40 split favoring our LP investors

Target IRR: High teens

Target equity multiple: 1.75x in 5 years.

The above waterfall splits make us very attractive to very sophisticated high net worth accredited investors that understand we have structured this so that our interests are aligned.

Of course, there are many additional advantages when investing in a fund and we are eager to explain them when we talk and get to know each other. Please don’t hesitate to schedule a call so we can provide clarity and provide additional benefits a fund can offer. Also, please be sure to watch a video of how our investors feel about us as the General Partners and our performance.

To invest in an AMAG opportunity, you must qualify as an accredited investor as defined by Canadian or US laws.

A Canadian Accredited Investor as partially described by Wikipedia is:

  1. an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000; or
  2. an individual whose net income before taxes exceeded $200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; or
  3. an individual who, either alone or with a spouse, has net assets of at least $5,000,000

***It is highly advisable to seek Canadian legal advice as it relates to qualifying as an accredited investor.

A US Accredited Investor as partially described by Wikipedia is:

  1. a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, or has assets under management of $1 million or above, excluding the value of the individual’s primary residence;[1][2]
  2. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year;[3] or
  3. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.”

***It is highly advisable to seek US legal advice as it relates to qualifying as an accredited investor.

AmeriCan Multifamily Alliance Group targets properties that will provide an overall IRR return in the upper teens and targets an equity multiple above 1.75x over a five year period for their investors.   Thus far, AmeriCan has consistently outperformed these financial numbers over the past 10 years in multiple projects. These returns are not a guarantee; however we feel our performance over the past ten years in the Texas markets speaks for itself.

Our track record has been very successful in the Dallas market and we feel it will continue. See our Case Studies section of the web site to view the performance that we are very proud of.

What we mean by Recycle Your Investment Money is that we will only buy properties that have a strong potential of returning most of our investor’s initial capital back within a 3-5 year period of time. This allows you, at your discretion, to place your returned capital into future projects over and over. So essentially, you are recycling the same capital to build wealth in multiple investments.

wealth creation

AmeriCan Multifamily Alliance Group adheres to a carefully constructed investment model centered on these guiding objectives:

Diamonds in the Rough

Acquire under-performing properties at a discount and with large appreciation potential. Properties must qualify for a quick refinance. This typically requires narrowing down 100+ prospective deals to one shiny diamond.

Forced Appreciation

AmeriCan only purchases properties that have great potential for increased value. These properties must have flaws that AmeriCan can fix and must possess multiple “value add” scenarios that can be monetized.

Community Impact

AmeriCan is leading a movement to transform apartment complexes into thriving, healthy communities by making positive social and environmental impacts as important as financial returns. AmeriCan consistently outperforms the market because its secret sauce of social and environmental responsibility causes “stickiness” within the communities. This translates to high tenant retention, elevated occupancy rates and increased rental fees, which, of course, help drive increased property values.

Refinance

A refinance event is absolutely mandatory. AmeriCan recognizes that refinancing is the ideal way to accelerate wealth and will work diligently to ensure it happens. The company has a 100% success rate in this regard.

Initial Capital Return

AmeriCan realizes the peace of mind and security that goes along with having the majority of investor’s initial capital returned, while maintaining ownership for long-term cash flow and appreciation.

Repetition

Leverage is an important advantage in real estate investing, and AmeriCan uses your same original capital again and again. Investors’ initial investment ultimately allows them to participate in ownership of multiple multifamily properties.

We invest in the Texas market for a variety of reasons:

  • The Texas market has the largest population growth of any state since 2010 which has been more than 2.5 million people.
  • Texas is in the top 5 for job growth which includes several diversified sectors such as oil and gas, technology, health care, education, etc.
  • Texas has no state income tax, lower business regulations, and lower labor costs (“right to work state”).

As a partner in the LP that purchases the properties, you will receive a K-1. A K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income. Partnerships are generally not subject to federal or state income tax, but instead issue a K-1 to each investor to report his or her share of the partnership’s income, gains, losses, deductions and credits. The K-1s are provided to investors on an annual basis so that each investor can include K-1 amounts on his or her tax return.

Yes, the following will help explain what happens with distributable capital.

Distributable capital: Waterfall:

Step 1:  Initial investment returned.

Step 2:  7% preferred non compounding return paid out to investors

Step 3:  80/20 Split favoring our LP investors

Hurdle :  12-18% IRR:   70/30 split favoring our LP investors

Hurdle :  18+ IRR:           60/40 split favoring our LP investors

Target IRR:  High teens

Target equity multiple: 1.75x in 5 years.

The above waterfall splits make us very attractive to very sophisticated high net worth accredited investors that understand we have structured this so that our interests are aligned.  In other words, we are very motivated to achieve the highest possible IRR for our investors.

The length of time of the investment is projected to be between 3-7 years. We will have multiple properties in each fund so return of initial invested capital and profits will take place at various points within this time frame.

As with any private investment, there are risks. It’s important you only invest funds that you are comfortable placing at risk. With that said, we feel a strong indication of the future is by looking in the past and we are very proud of our track record. We only purchase properties that we feel confident we can substantially increase the value even in a flat or slowing market. The principles have a strong background in construction which helps insure the success of this approach.

Creating a Positive Social Impact is truly a secret sauce to our success.  We make decisions that are not only in the best interest of our investors, but also for our residents.

AmeriCan Multifamily Alliance Group is on a mission to create a Positive Social Impact within our communities. We purchase C class assets which often house families who are lower income and have suffered very difficult lives. We focus on two community events per month which include Holiday Parties with gifts for the children, Turkey Dinner for Thanksgiving, Halloween Haunted Houses, Back to School Hair Cuts and Back Packs with BBQ and Bounce Houses, Outdoor Movie Parties, Mother’s Day and Father’s Day Events to honor the parents, Valentines Parties… and the list goes on and on. Together with our teams, we brainstorm every month to bring meaningful, loving events to the communities. All communities enjoy the same events on the same dates. One of our key hiring criteria on site is the new team member must play a strong role in creating a Positive Social Impact within the community.

We also provide after school programs, all day summer programs and tutoring. Some properties have a community center on site.  It they don’t, we create one in a vacant unit. We focus on new amenities that will bring the community together such as installing grilling areas, soccer fields and playgrounds.  Other ways we create a Positive Social Impact is by hosting Parenting Classes, Self-Improvement Libraries, Soccer Competitions between our other communities, Dance Classes, Swimming Lessons, Self Defense Classes for Women and monthly Crime Watch Meetings.

AmeriCan Multifamily Alliance Group also focuses on creating a Positive Environmental Impact within our communities! We celebrate Earth Day at all communities teaching children about sustainability and about loving the earth we live on. Each community plants trees with the families. We teach about recycling and conservation. We change all lighting to LED, install low flush toilets and shower heads and install recycling bins on site… INVESTMENT WITH IMPACT.

AmeriCan has a distinctive advantage in that we self manage with our team members in the Dallas market.  Our team has been in place in the Dallas market for over 10 years.  This translates into great resources for the many requirements to re-brand a property and increase its value significantly.  In addition, we have a strong mission to create a Positive Social and Environmental impact as described below.  We feel team members work at their best when they are working for a cause that is far greater than themselves.  Through self-management, we are able to drive the Impact Plan deep within the organization which equates to residents staying longer, therefore reducing turn over costs.

To lean more, click on our contact page so that you can send us an email, or schedule a call to speak with us directly. We’ll be able to answer any questions and give you the opportunity to get to know us better.  We realize this is a big decision and we want you to feel good about investing with us.

We consider our investors a huge part of our success and could not do this without them at this level.  We have a close relationship with our investors and encourage you to watch or investor feedback video and see for yourself.  We realize that for a company to be successful for decades, aligned interests for all stake holders need to be paramount and we feel we have done just that.

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