FAQ- Frequently Asked Questions
Who is Magna Legacy Partners (Magna)?
Magna is an independent multi-strategy real estate investment group with presence and partnerships in Austin, Texas, San Diego, California and Scottsdale, Arizona (USA).
Magna, together with its Strategic Alliance Partners, have extensive real estate development, investment and consulting experience spanning more than 25 years and in excess of $1oBillion in value.
Magna identifies, reviews and secures select qualifying real estate investment opportunities which are privately presented through the Magna Legacy Partners platform to selected accredited and institutional investors to invest alongside Magna.
Investors will also have access to a secure online portal to monitor investments, review due diligence materials and sign legal documents securely.
Where does Magna Invest?
Magna targets select U.S. markets, primarily in the Sunbelt region, based on evaluation of current and planned supply as against demand drivers such as population growth, job growth, rent growth and access to multiple transit oriented corridors.
Who makes up the Magna Legacy Partners team?
We have a team of professionals and a carefully selected network of real estate experts with experience across the spectrum of real estate investment, compliance, legal, financial, development and related services.
The Magna Network includes:
Strategic Alliance Partners
Sourcing Network
Advisory Members
Financial institutions
Support Members
Professionals
What is the Magna Legacy Partners Mission Statement?
Magna has 5 key tenets to our Mission statement:
Provide a Seamless Property Investment Partnership.
Built on Transparency and Trust.
Prioritize Sectors of Expertise.
Grow the Wealth and Legacy of our Partners.
Enrich our Stakeholders, Communities & Environment
What are the Primary Real Estate Focus areas for Magna?
Investments are sought in the following primary areas:
Senior Housing
Healthcare Real Estate
Demand Driven Housing
Industrial
Land Opportunities
What types of real estate projects does Magna invest in?
Magna primarily secures under-performing Senior Housing and Healthcare adaptive reuse assets in key markets throughout the U.S. and seeks to add value by buying below market and enhancing revenue and values through active management. In addition, Magna seeks Opportunistic real estate investment situations presenting alternative best use value creation opportunities.
The company’s goal is to generate the highest risk-adjusted returns for its investors by acquiring and managing high-quality real estate opportunities, which are currently offered through a syndicated structure, with Fund options being established in due course. We invest side-by-side with our clients.
Who invests through Magna Legacy Partners?
Magna Legacy Partners’ select investor community includes high net worth individual investors and institutional investors including family offices, private equity firms, hedge funds, banks and asset managers.
Only accredited Investors can invest in private placements through Magna Legacy Partners. Qualification as an accredited investor requires meeting certain thresholds as defined by the Securities and Exchange Commission under rule 501 of Regulation D. with the requirement to meet one of the following criteria:
Earn an annual income per individual of over $200,000 per year ($300,000 per couple) with the expectation of maintaining such level of income in the future.
Have a net worth of more than $1 million (individually or jointly), excluding the value of a primary residence.
Be a bank, insurance company, registered investment advisor, business development company, or small business investment company.
Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
Be a business in which all the equity owners are accredited investors.
Be an employee benefit plan, a trust, charitable organization, partnership, or company with total assets in excess of $5 million.
What are the benefits of partnering Magna Legacy Partners?
Magna has a unique, robust process for sourcing targeted opportunities and navigating them through to acquisition. This provides a seamless opportunity for select investors to partner a trusted and transparent player in building a portfolio of proud Legacy Real Estate assets.
How does Magna ensure alignment of interests with investors?
Magna’s co-founders use Magna as their primary real estate investment vehicle. Additionally, our team is compensated weighted substantially towards asset performance and not acquisition volume.
What types of investments does Magna Legacy Partners offer?
Depending upon the specifics of the Real Estate asset and appropriate capital structure, investors will be afforded the opportunity to invest in debt or equity within the capital stack with the advantage of having choice of such instrument as well as on an investment by investment basis.
Debt Instruments: Investors make a specific loan which is tied to a residential or commercial property and the loan is secured by the property until the borrower repays the loan in full. Investors earn monthly interest on their money typically with a residual payment at the end. Hold periods vary.
Equity Investments: Equity investments depend on the nature of the Real Estate investment and, in general, would receive a Preferential Return on a monthly or quarterly basis and, upon sale/exit the capital investment is repaid and any gains are shared as agreed with the General Partner.
In general, investors pool their money to purchase a specific property within a special purpose vehicle/company with it’s only asset being the property acquired. The hold period for investments are generally medium to long term with sale/exit alternatives being subject to defined parameters having regard to real estate cycles and long term asset return optimization.
How does an investment opportunity qualify for Magna Legacy Partners?
Magna has an extensively defined, robust process and methodology for screening opportunities. Thorough analysis and research is performed into Data Analytics, Demographic Analysis, Urban Planning Dynamics, Risk Analysis, and ensuring they fall within the defined Sectors of Expertise and Geographies in order to qualify for presentation to investors.
Is there an investment minimum and maximum?
Yes, however this will vary by investment opportunity.
How do I invest with Magna?
Magna’s qualifying investment opportunities are available to accredited investors who are registered with an account on Magna’s Investor Access Portal on Magna’s website.
If you are not already registered, complete the Contact Us page and request an invitation to register after which you will receive and set up a username and password for future login to be able to explore offerings.
Upon notification of an investment opportunity, Click “Invest Now” when you are ready to invest and follow the required instructions to verify your accreditation, sign legal documents and fund your investment.
Can I invest if I am not a US Citizen or Resident?
Yes. However, non-U.S. investors have certain U.S. federal income tax obligations that differ from those of a U.S. investor. Non-US investors are urged to consult with their tax advisor and to review the tax considerations set forth in the Offering Documentation.
Who do I contact if I have questions regarding an investment offering?
Users who register for an account on our website will have access to Magna’s Principals or an investor relations associate, who is available to answer any questions as they arise with access to their email addresses. In addition, you are always welcome to contact Magna directly at 1 818 937 1200 or investorrelations@magnalegacy.com
Can I invest through an LLC, LP, Trust or IRA?
Yes. Investors are able to invest through an LLC, LP, Trust or through their traditional self-directed IRAs.
Which 3rd Party Legal and CPA firms does Magna use?
Magna uses reputable third party Legal & CPA firms in compliance with required regulations and filings within the relevant jurisdictions.
How secure are the investments?
No investment is guaranteed. In the interests of prioritizing down-side limitation & capital preservation opportunities, the strategy of investing in physical assets within the United States represents a traditionally more secure actual property as opposed to shares or other non-physical assets. Even so, it is important to note that due to the economic and cyclical nature of the real estate market, patient capital is necessary in order to achieve desired returns.
How does Magna earn income to support it’s infrastructure and source opportunities?
Fees are determined in each case by the nature and complexity of transactions and are targeted at being well within market norms. In addition, no fee duplication arises in the case of Third Party service providers or Alliance Partner Joint Ventures. Fees are allocated to covering the Magna Business Model with pass through benefit to our partners with the primary purpose being to hire and incentivize best in class professionals and service providers.
With transparency being paramount, all fees and carried interest arrangements are clearly disclosed by investment opportunity.
What is the Governance around the investment process?
Investments are subject to completion of all required legal documentation and cleared funding. Funds are held securely in a dedicated account with a reputable US bank. All cash flows are subject to authorization and reported on by an independent 3rd party fund administrator.
How are legal documents handled on Magna?
Magna will endeavor to ensure that the secure investor portal has all legal documents which can be executed electronically in order to ensure efficient and complete transfer and recordal of documents, while maintaining the authenticity and security of your information. Investments are confirmed upon receipt of all countersigned legal documentation and acknowledgement of receipt of funds.
Wire instructions will be provided for the dedicated bank account on an investment by investment basis. Notably, applicable KYC (Know Your Client) and related requirements will need to be met prior to fund transfers.
What does an investor receive in exchange for their investment?
Investors typically purchase shares in a Limited Liability Company (“LLC”) that holds title to the investment property. The LLC provides various rights and protections to the investor as set out in a legally vetted Operating Agreement.
Operating agreements generally also refer to a manager, general partner and limited partners (LP). The manager generally makes all of the day-to-day decisions and the limited partners are passive investors. The manager has the ability to determine how much cash is available for distribution to the LPs and how much to retain for capital and working capital needs. LPs are also protected in that certain actions may require a vote by the LPs.
How will my investment cash flow allocations be distributed?
Investors who invest in debt typically receive interest payments on a monthly basis, while investors who invest in equity typically receive quarterly distributions.
Distributions are made to the same bank account that the investor provided for their original investment.
Distributions are never guaranteed in amount or timing and should be fully understood in the context of the offering documents with due consideration to the associated risks.
How liquid is my investment?
In general real estate investments with Magna are individual transactions in physical Real Estate assets which, from a liquidity point of view, are very different to trading shares on a public stock exchanges.
Circumstances may provide for the ability to resell your investment security in a private transaction subject to restrictions that are specific to that investment as well as pursuant to the Securities Act of 1933. In general, investors should only invest if they are comfortable with a longer term investment horizon.
How are investors updated on their investments?
Investors can access updated account information 24/7 by logging in to the Magna website through the investor portal and their personalized investor dashboard.
Investors are also assured that requests for information are subject to Magna’s timely response policy (24 hour maximum).
All documents, distributions to date, returns etc. will be provided on this site.
In addition:
updates will be generally shared on a quarterly basis via email and the investor portal.
investors will receive tax documents every year in relation to their Real Estate Investment/s.
Is the Magna Investor Platform secure?
Magna takes the security of our users’ data seriously and we consciously take steps to ensure all information remains secure. To this end Magna has procured the back end of one of the largest third party real estate investment SAAS providers in the USA to ensure the highest standards of privacy and security.
What is the process for exiting investments and receiving capital back?
Each investment property has a different horizon and cycle to achieve its targeted return optimization. This will generally impact the timing of potential distributions as well as refinancing and return of capital. Offering documents should provide additional insight into contemplated investment horizons.
Are investors required to make additional equity investments if the investment so requires?
Unless specifically stated in an Offering document due to specifics of a transaction, generally investments do not contemplate capital calls beyond the initial investment. If such a situation arises, investors will typically be offered an opportunity to invest further, or their membership interest could be diluted if more investment is required.
What are the tax implications of investing as a Limited Partner?
Typically investing in equity through limited liability companies (LLCs) results in the LLCs being treated as a partnership for tax purposes. Partnerships generally are not taxed at the entity level and “pass through” applicable items of income, losses and depreciation to their members.
Non-cash depreciation charges often reduce the amount taxable income that may be otherwise passed through to an investor from a real estate equity investment. As a result, cash distributions received by an investor, in a year when there is no corresponding pass-through of taxable income given the depreciation charges, may result in reduced or deferred taxes.
Each year, every individual investor receives a federal and state K-1 reflecting their annual share of income and loss and distributions for inclusion in their tax return. Special purpose LLCs may be formed in a specific jurisdiction that has different filing requirements and tax liabilities in other states depending on the details of a particular transaction, the investors state/country of residence, and the location of the investment property.
Magna and its associated entities do not provide tax, legal, or accounting advice. Materials are prepared for informational purposes only, and are not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should fully understand all offering documentation and consult your accounting, tax and legal advisors before investing.
What are the tax implications of investing in Debt opportunities?
Tax information for debt investments are reported annually to investors on Form 1099. For other types of debt (e.g. subordinated or mezzanine debt), distributions may be characterized as interest, dividends, or other distributions, and investors may receive either a Form 1099 or a Federal and state Form K-1, depending on the structure of the transaction.
What is a 1031 Exchange?
Within the IRS tax code there is provision for a 1031 exchange whereby, under specific circumstances, the capital gains tax from the sale of a property may be deferred. By exchanging a disposed property for “like-kind” real estate, owners may be able to defer their federal taxes and use the proceeds for the purchase of replacement property. Not all real estate investments are eligible for 1031 exchanges as eligibility requires a direct ownership in the underlying real estate. Given the complexity of 1031 Exchanges, investors should consult with their CPA and attorney before proceeding with an exchange.
Why Magna?
An invaluable partnership founded on:
Having a trusted, experienced team on the ground to navigate opportunities & simplify the investment pathway into the most desired real estate market in the world.
A customized strategy to maximize US Dollar based risk-adjusted returns by optimizing diversification through sector, geography, competitive position and timely deployment of capital.