Investing in Pacific Sands Funds has been designed to be a straightforward and easy process for investors. The minimum investment is typically $50,000, which will buy you a share in the specific Real Estate Fund. The portfolios are built to include exposure within submarkets that have appreciation cash-flow.
HOW IT WORKS
Investing in real estate is our passion. Our team is here to get the most out of your investment
Step 1
Step 2
After the Fund has an equity raise and closes, it typically takes 12 months for Pacific Sands to increase the rents and perform capital improvements. The team calls this “the heavy-lift” as a significant amount of work goes into the properties.
Step 3
After the initial 12-months, a distribution schedule typically begins in which the investors receive a 6% annual Preferred Return based on their equity invested. After the first 6% is paid to the investors, the fund managers receive a 2% catch-up and the additional cash flow is split by the investors and fund managers.
Step 4
When the properties are eventually liquated/sold, off the investors get paid again based on a split. Thus, in essence the investors get paid in two ways through the fund.
1) During the hold-period after the first 12 months passes via distributions. This is the 6% Preferred Return, which most times can actually be up to a 8-9% annual return.
2) Upon the sale of the properties after the hold period.
However in many cases the Investor IRR has ranged from 28% to 35%.
Investment Types:
LP Investor (Limited Partner)
An LP (limited partner) in a real estate deal is a passive investor who contributes capital to a project managed by a general partner (GP). The LP’s role is hands-off, with the GP handling all management and decision-making. In exchange, the LP receives a share of the profits and has their liability limited to the amount of their initial investment, but they lack control and face liquidity risk.
What an LP does
- Provides capital: The LP’s primary role is to provide funding for the real estate project.
- Remains passive: The LP does not participate in the day-to-day management or decision-making.
- Has limited liabilit: The LP’s financial risk is limited to the amount of money they have invested in the deal.
- Receives profits: The LP receives a share of the profits generated by the property according to the partnership agreement.
Preferred Equity
- Preferred Equity sits behind the first trust deed loan but ahead of common equity in repayment priority.
- The target structure includes up to 85% Loan-to-Value (LTV) including debt and preferred equity.
- The LP Investor proposed return is a 12% IRR, with 5–7% annual cash flow and the remainder paid at sale or refinance.
- Investment horizon: 2–5 years
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FAQ
What is the typical hold period?
The typical hold period is projected to be between 3 to 7 years.
Can I have my investment back prior to the sale of the properties?
The capital you provide is not liquid until a sale is triggered. If there is an urgent situation, an investor may be able to buy you out of your shares in the fund.
What is the minimum investment?
The minimum investment is typically $50,000.
What have been the previous returns?
The Principals in the Fund have provided previous returns to investors ranging from 20-38% IRR over a 3 to 7 year period.
How do I get my K-1 / Tax Documents each year?
You will be able to access your K-1 through our investor portal on AppFolio by March 15th.
What markets is Pacific Sands Funds investing in?
Pacific Sands Funds is currently invested in California, Kansas, Missouri, and Texas.