Yes, investments can be made through an IRA account. Investors should check with their custodian to make sure investing with Odyssey is allowed through that account.
The minimum investment is $50,000.
An accredited investor, in the context of a natural person, includes anyone who:
- Earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
- Has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period, in which case the person may satisfy the threshold on the basis of joint income for the years during which the person was married and on the basis of individual income for the other years.
In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:
- Any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or
- Any entity in which all of the equity owners are accredited investors.
In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
Odyssey’s preferred investment strategy includes holding properties for long term wealth. However, it is our goal to return all investor capital with a refinance or occasional sale within 2-5 years depending on the deal.
Typically our investments are structured in a limited partnership (LP). A limited partnership consists of a general partner and one or more limited partners. Odyssey is the general partner with investors being limited partners. This structure allows investors liability protection and pass through tax benefits.
Any disbursements are issued to investors on a quarterly basis.
Because limited partnerships are a pass through entity, the tax liability flows through to the individual investors and is not subject to “double taxation” or any partnership level taxation.
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 a K-1 is issued 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.
Odyssey prefers to invest in multifamily rather than single family homes due to economies of scale afforded to apartment buildings. Further, increasing net operating income on a multifamily directly increases the property’s value. Increasing net operating income on a single family may or may not increase value depending on area sales comparables.
We prefer to invest in multifamily rather than other types of commercial real estate due to quality housing being a core human need. Recent years have seen increasing apartment demand due to little new supply and many millennials and baby boomers renting by choice rather than buying homes. Additionally, other types of commercial real estate face uncertain futures. Sectors like office and retail may see radical changes in the coming years due to do changes in preferences such as online shopping, decreasing retailer footprints, and increasing prevalence of work at home jobs.
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