Question 1

Why should I invest with Opal Sea Capital?

Accepted Answer

At Opal Sea Capital, we share a passion for enabling others to achieve financial freedom through passive investing. One of our core values includes a strong belief that there is a higher purpose for investing that enables investors to help those around them. As your wealth and passive investment income increases, you are free to dedicate your life beyond yourself and strive towards a greater purpose in life rather than just trading your time for money.

To help you accomplish this, Opal Sea Capital leverages our extensive professional network, business expertise, and past real estate experiences so that we can make intelligent, data-based investment decisions.  We take a conservative underwriting approach with a focus on risk mitigation both short-term and long-term, and we understand the importance of strong operations to maximize the likelihood that we achieve the returns that you expect in a syndicated investment.

Lastly, we buy with the idea of holding assets forever, ensuring that we’re not invested in an asset dependent on quick returns, allowing you to enjoy tax reduction and cash flow benefits over long periods of time. The popularity of this approach with investors has allowed us to manage risk most effectively and provide multiple exit options for any investment.

Question 2

What are the tax benefits?

Accepted Answer

Apartment syndications are very tax efficient. As a partner in our limited partnership, you will benefit from your portion of the investment’s deductions for property taxes, loan interest and depreciation which are the big ones. We like to use a cost segregation strategy as well to accelerate depreciation since we frame the investment to hold onto the asset for a long time. You will get a K-1 statement from the partnership of the following year for the current tax year. It’s not unusual on a $100K investment to experience a min 8% preferred return or cash in your pocket of $8K while experiencing a paper loss on your annual K-1. Additionally, any refinances or supplemental loans are reviewed as a return of equity so no tax impacts.

*Disclaimer* This is not tax advice. We always recommend consulting with a tax professional.

Question 3

What if the economy plunges into a recession while we own the property?

Accepted Answer

Buying for the long-term helps weather an economic storm in a down market. Our goal is to continue to pay the preferred return minimum and hold on until the market is healthier to achieve a better price at sale. Class B/C value add properties tend to hold up much better in downturns because everyone needs a place to stay and rents are more in line with the market.

Question 4

What is the minimum required investment?

Accepted Answer

The minimum investment will depend on each individual deal; however, a common range would be between $50,000-$100,000.

Question 5

Is Opal Sea Capital invested in these opportunities?

Accepted Answer

We invest both time and capital in every deal and believe it truly helps us align our interests with our investors. Putting some of our own skin in the game helps our investors know that we fully believe in the success of this investment.

Question 6

What are the risks?

Accepted Answer

They will be outlined in the PPM (Private Placement Memorandum). That said, here are a few data points for context: In 2020, throughout the COVID-19 financial & economic crisis, delinquency rates on single family homes were 8.2% vs 1.4% on Multi Family apartments. Additionally, a 2020 survey of over 500,000 units across the U.S. showed that there was only a 1-2% collection drop from tenants unable to pay rent. Class B & C multifamily properties were actually seeing growth in tenant base during 2020 and NOI was higher than ever before in certain cities throughout the U.S. Class B & C multifamily properties have a proven track record of steady returns regardless of the market cycle.

Of course, as with any investment, you can (and should) feel free to review potential risks with trusted, competent advisors for your personal situation.

Frequently Asked Questions