Frequently Asked Questions
Single-Asset Syndications
Is this offering made through North Capital Private Securities?
No.
What is middle market real estate?
How Does the Investor Get Paid?
How Long Can I Expect My Investment to Be Tied Up?
Most of our syndication investments are intended to be 3-5 year holds. However, some investments can take longer. The timelines in offering documents are not guaranteed and may be impacted by factors such as market conditions and ability to execute the business plan as underwritten.
Can I redeem out of my investment?
What kind of tax documents will I receive?
How Do You Source Your Deals?
What happens if a sponsor doesn’t execute?
What are the risks?
Is there a Preferred Return associated with an Equity Investment?
What Are Your Historical Returns?
Syndications: Please see our current direct real estate track record and historical returns here. Past performance does not guarantee future results.
How do I make an investment?
We partner with Verivest, our affiliated investment administration firm, to make your experience as seamless as possible. Once you are ready to commit to an investment with Fairway America, you create an account on their investor platform and they will walk you through the subscription process.
What are some potential tax advantages of investing in private real estate?
The following are some possible tax benefits for investors who invest in real estate. Each investor’s situation is different, so consult with your tax professionals to determine how to best access the potential tax advantages of real estate investing.
Long-Term Capital Gains: Successful real estate projects may generate a capital gain at the sale of the property. Long-term capital gains are treated at a lower tax rate than ordinary income for some investors.
Interest Deductions: For equity investors specifically, another potential tax benefit is that the IRS allows the interest paid on the principal mortgage to be expensed.
Depreciation: Real estate projects may include an opportunity for some investors to claim depreciation. Depreciation is treated as an expense, often generating significant tax losses, and thus has the potential to offset operational income that is being generated for some investors. Taxes are a highly complex and specialized area, and each individual investor will have a unique set of circumstances that should be taken into account. We strongly recommend finding a CPA that has experience in real estate taxes and K-1 filings.
What’s your competitive advantage in the market?
What does your typical distribution waterfall structure look like?
https://fairwayamerica.com/resources/what-is-a-private-equity-waterfall/
A waterfall is the order in which cash is distributed to investors and the manager. There are many ways to structure waterfalls, but typically they include a preferred return, the return of investor capital, and a split of cash between the investor and the manager which can be called a performance fee, promote, or profit split. Our preferred returns are typically set between 8-10%, and the profit split varies based on the deal and the performance of that deal after investors receive a return of 100% of their original investment.
Multi-Asset Funds
Is this offering made through North Capital Private Securities?
Yes, this type of offering is solicited through North Capital Private Securities, Member FINRA/SIPC.
What is middle market real estate?
Middle market real estate is a term used to describe commercial real estate properties that are located in mid-tier cities and owned by private individuals or private companies. Middle market private real estate investing is a process of investing in real estate that can provide investors with the potential for risk-adjusted returns through active investment manager involvement. Middle market private real estate investing can be more opportunistic and entrepreneurial than investing in REITS, which typically pay high prices for large, stabilized properties in gateway markets. The middle market by contrast is primarily made up of sub-$100M properties that are often found in a variety of stages (high vacancy, deferred maintenance, new construction, leasing up, stabilized, etc).
How Does the Investor Get Paid?
What Are the Fees Charged/Associated with an Investment in Fairway’s Funds?
What Are Your Historical Returns?
Please see the historical track record for our current funds here. Past performance does not guarantee future results.
What leverage does the fund currently have?
How many assets are in Fairway’s Open-End Funds?
What are some potential tax advantages of investing in private real estate?
Long-Term Capital Gains: Successful real estate projects may generate a capital gain at the sale of the property. Long-term capital gains are treated at a lower tax rate than ordinary income for some investors.
Interest Deductions: For equity investors specifically, another potential tax benefit is that the IRS allows the interest paid on the principal mortgage to be expensed.
Depreciation: Real estate projects may include an opportunity for some investors to claim depreciation. Depreciation is treated as an expense, often generating significant tax losses, and thus has the potential to offset operational income that is being generated for some investors.
Taxes are a highly complex and specialized area, and each individual investor will have a unique set of circumstances that should be taken into account. We strongly recommend finding a CPA that has experience in real estate taxes and K-1 filings.
What happens if a sponsor doesn’t execute?
What does your typical distribution waterfall structure look like?
A waterfall is the order in which cash is distributed to investors and the manager. There are many ways to structure waterfalls, which typically include a preferred return, the return of investor capital, and a split of cash between the investor and the manager which can be called a performance fee, promote, or profit split. Fairway Funds do not all have a preferred return, but rather distribute 100% of net distributable cash flow after management fees and other Fund expenses.
What are the risks?
Is there a Preferred Return associated with an Equity Investment?
Closed ended Fairway Funds may offer a preferred return depending on the Fund. Read the Private Placement Memorandum before investing in any fund.
How Long Can I Expect My Investment to Be Tied Up?
Open-End “Evergreen” Funds: Note holders can expect a 1-3 year commitment for their funds. This is also known as a “lockup period.” In Fairway’s open-end funds, after a 2-year lockup, investors may redeem 50% of their commitment. The remaining 50% can be redeemed after the 3rd year. Redemptions are subject to available cash and made in the manager’s discretion. Redemption requests may take time to fulfill.
Can I redeem out of my investment?
Open-End “Evergreen” Fund: Yes, investors can request up to 50% of their investment back after 2 years and the remainder of their investment back after 3 years subject to the availability of cash to fulfill redemption requests and the manager’s discretion.
How do I make an investment?
We partner with Verivest, our affiliated investment administration firm, to make your experience as seamless as possible. Once you are ready to commit to an investment with Fairway America, you create an account on their investor platform and they will walk you through the subscription process.
What kind of tax documents will I receive?
How Do You Source Your Deals?
Our unique co-manager investment platform allows us to partner and collaborate with emerging sponsors who are high in human capital and experience but haven’t proven their investment platform or strategy at scale yet. These co-managers are our most common source of deals for the funds. We attempt to find sponsor partners we believe will be scrappy, passionate, and skilled at finding new opportunities or novel ways of adding value because of their local market expertise.
What’s your competitive advantage in the market?
Real Estate Investments and Securities offerings are speculative and involve substantial risks. Consider the risks outlined in the applicable investment offering documents before making any investment. Risks include, but are not limited to illiquidity, lack of diversification, complete loss of capital, default risk, and capital call risk. Investments may not achieve their objectives. Investors who cannot afford to lose their entire investment should not invest in such offerings. There is no guarantee that any stated valuations or other terms appearing on this website are accurate or in agreement with the market or industry terms or valuations. All securities will be offered through North Capital Private Securities, member FINRA/SIPC