FAQ- Frequently Asked Questions
Who is Magna Legacy Partners (MLP)?
Magna Legacy Partners is an Independent multi-strategy real estate investment group.
MLP identifies, reviews and secures select Real Estate investment opportunities which are privately presented through the Magna Legacy Partners platform to selected accredited and institutional investors to invest alongside MLP.
Investors will also have access to a secure online portal to monitor investments, review due diligence materials and sign legal documents securely.
Who makes up the Magna Legacy Partners team? Where are we located?
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:
- Alliance Partners
- Sourcing Network
- Advisory Members
- Financial institutions
- Support Members
We are headquartered in California, USA.
What is the Magna Legacy Partners Mission Statement?
Magna has 5 key tenets to our Mission statement:
1. Provide a Seamless Property Investment Partnership.
2. Built on Transparency and Trust.
3. Prioritize Sectors of Expertise.
4. Grow the Wealth and Legacy of our Partners.
5. Enrich our Stakeholders, Communities & Environment
What are the Primary Real Estate Focus areas for MLP?
Investments are sought in the following primary areas:
1. Demand Driven Housing
2. Senior Living
3. Healthcare Real Estate
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 Legacy Partners 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.
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?
MLP 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 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 MLP 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 Legacy Partners?
MLP 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 Legacy Partners 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 will have access to real time updates through the investor portal and their personalized investor dashboard. 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. In addition, investors will receive tax documents every year in relation to their Real Estate Investment/s.
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.
MLP 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.
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.