Question

Who can invest in the Peak Housing REIT?

Answer

The Peak Housing REIT is designed for accredited investors. This restriction on who may purchase shares in the company is determined by the federal government under Rule 501(a) of Regulation D. To be an accredited investor, you must meet one of the following criteria:

  • Have an individual net worth (or joint net worth with your spouse) that exceeds $1 million, excluding the value of your primary residence
  • Have a combined income with your spouse exceeding $300,000 in each of the past two years, and expect to reach the same this year
  • Invest on behalf of a business or investment company with more than $5 million in assets and/or all of the equity owners are accredited.

Question

How does the accreditation verification process work?

Answer

You can verify your accredited investor status by forwarding a certified form to a licensed attorney, CPA, or financial advisor that is privy to your financial status. The licensed individual will then need to complete the form on your behalf. Alternatively, you can utilize a third-party service provider to verify your accreditation status, such as VerifyInvestor. The accreditation form must be completed for the entity that the investor invests through. For example, if you invest as Bob Smith, then the accreditation form must refer to you as “Bob Smith.” If you invest through an LLC called “Bob’s Investments, LLC,” the accreditation form must state “Bob’s Investments, LLC.”

Question

How can I invest in the Peak Housing REIT?

Answer

After your status as an accredited investor has been verified, investing begins with a minimum buy-in of $25,000 cash or through the conversion of your rental portfolio's equity via 721 exchange. Visit invest.peakhousingreit.com and create an account to get started!

Question

How much of the Advisors' own funds are invested?

Answer

The principals of the Advisor, including The Peak Group, will be investing a minimum of $4,500,000 into the Peak Housing REIT in the form of cash investment and equity contribution via 721 exchange.

Question

Can I be both an investor in the Peak Housing REIT AND transfer my existing portfolio of homes?

Answer

Yes! Many investors have already chosen to transfer their rental homes to the Peak Housing REIT to better diversify their cash flow and reduce their management headache. These same investors see the long-term value of continued investment in single-family rental assets, and have invested cash alongside equity into the Peak Housing REIT.

Question

Can I invest in the Peak Housing REIT through my solo 401k, self-directed IRA, or other retirement account?

Answer

Yes! You can invest in the Peak Housing REIT as an individual or jointly with your spouse (or other related person) through several different types of retirement accounts, LLCs, corporations, trusts, and many other types of entities. There’s no penalty concerning how you choose to invest, as long as you coordinate with your custodian appropriately. Please reach out to your custodian for this process.

Question

How is my investment more diversified within the REIT structure?

Answer

As a shareholder of the REIT, investors own a small portion of many different properties in different markets rather than owning a single asset or limited number of assets. The REIT will provide similar benefits of appreciation, depreciation tax sheltering, and income (in the form of dividends) without the workload.

Question

Can I reinvest my dividends?

Answer

Yes! Investors can compound their returns by reinvesting quarterly dividends.

Question

What is the redemption timeline and investment liquidation process?

Answer

Redemption is locked for two years for each investment and is then subject to discounts of 10%, 5% and 2.5% over the next three subsequent years. Liquidations are planned twice per year.

Question

How do I start the process of investing?

Answer

You can indicate your interest in the Peak Housing REIT by submitting your offer via our portal at invest.peakhousingreit.com. Alternatively, you can reach out to us via email or phone call to discuss the offering directly. To invest, the Peak Housing REIT will provide you with an electronic subscription agreement and a form to verify your accreditation status.

Question

How do I get more detailed information on the REIT?

Answer

You can check out the Private Placement Memorandum and other detailed information by going to https://invest.peakhousingreit.com/ and hitting "Get Started." This will provide access to our Investor Portal where more information is readily accessible.

Question

What is passive income?

Answer

Passive real estate income is income earned without participating in active, day-to-day management of a property. REIT shareholders are passive in that managers oversee the operation of the REIT and manage its assets. This allows investors to have a hands-off approach. Investors receive communication about acquisitions, dispositions, and distributions, but will not be involved in any of these decisions.

Question

What are the estate planning benefits of REIT ownership?

Answer

When an investor is preparing to pass down their assets to their chosen beneficiaries, a 721 exchange is a strategy that is often used to maximize this gift. If the estate should exchange by way of 721, benefactors will still receive all of the advantages of real estate investing during their lifetime. Upon their passing, gifted shares can be split equally and either held or liquidated by the beneficiaries of the trust. Since the shares are passed through a trust, heirs will enjoy a step-up in basis, and will avoid all capital gains and depreciation recapture taxes that were deferred by the estate.

Question

Is REIT dividend income tax-sheltered?

Answer

A portion of REIT dividends may be ordinary income and a portion may constitute a non-taxable return of capital for federal income tax purposes. Consult your tax professional for details.

Question

How do you plan to grow the portfolio?

Answer

We have three strategies in place to grow this portfolio:

  • The UPREIT structure or 721 exchange: This highly-underutilized tax shelter allows real estate investors to transition out of property ownership while continuing to enjoy the tax and financial benefits of owning real estate. An UPREIT structure also addresses estate and taxation issues that come with liquidating real estate investments.
  • Build-for-rent communities: BFR meets the market demand for high-quality residential housing, and caters to a large sector of the workforce that doesn't have interest in owning real estate long term.
  • Wholesale or off-market acquisitions: This strategy allows the Peak Housing REIT to acquire assets at below-market pricing, creating faster equity growth for our investors.

Question

How do you evaluate potential expansion markets?

Answer

We utilize data-driven decision making when looking at new markets. The inputs to our analysis include:

  • The Zillow market health index
  • Zip code level job growth
  • Zillow potential appreciation data
  • Senior management marketing knowledge
  • Seller-direct purchasing opportunities.

Question

What are wholesale acquisitions?

Answer

The Peak Group uses our collective buying power and experience to acquire wholesale homes at prices lower than the traditional investor cost. Even accounting for the lower leverage, arbitrage on price, expenses, and debt costs, wholesale acquisitions result in higher total returns within the REIT than a standalone investment can provide.

Question

What are infill builds?

Answer

Building new homes to scale within established communities can often be more cost-effective for investors than acquiring existing real estate. Developing infill homes provides the Peak Housing REIT with instant equity at completion, as the value of the completed home is expected to exceed the costs of development. This also serves to increase the availability of much-needed affordable housing inventory in new or improving neighborhoods. These properties also provide the opportunity for higher rental rates coupled with lower maintenance costs, while diversifying the company’s asset portfolio.

Question

What does build-for-rent (BFR) mean?

Answer

Build-for-rent is a term used to describe the development of an entire neighborhood for the sole purpose of renting all of the units. The efficiencies created by building at this scale are an excellent way to create built-in value and strong revenue within the REIT.

Question

What kind of financing does the Peak Housing REIT use?

Answer

The Peak Housing REIT utilizes 60-65% loan-to-value financing on properties in the portfolio. We are able to utilize affordable portfolio or agency financing because of the large volume of properties we acquire.

Question

How does The Peak Group manage the cost of ongoing property maintenance?

Answer

Operating hundreds of properties in one area allows for bulk negotiations of repair contracts as well as the full-time hiring of dedicated maintenance staff. These economies of scale reduce our maintenance costs while providing responsive service for our residents.

Question

How do you approach property management?

Answer

The Peak Housing REIT is focused on acquiring and managing profitable single-family real estate investments, while providing high-quality, cost-effective housing with convenience and simplicity.

Question

How do you keep turnover times and costs down?

Answer

We list our available homes on aggregator websites, which leads to faster lease-up and fewer commissions paid to outside agents.

Question

What do you do to help retain renters?

Answer

Our proven processes result in an enhanced resident experience, which yields longer tenancy and fewer costs on each unit.

  • We use professional photography and offer an online application process to make it easy for potential residents to see the property and apply.
  • We also utilize a self-guided tour process, so applicants can see the property on their own time and without the sales pressure of an agent.
  • Once approved, the resident receives their own online account which allows them to do everything from paying their lease payments to communicating with our property management staff and reviewing lease documents.
  • As an additional benefit, we incorporate smart-home technology to enhance the resident experience.

Question

Do you use smart technology in your units?

Answer

Yes! We use a smart access control system which provides keyless entry and the option to customize visitor entry codes as well as smart thermostats and smartphone-enabled garage access.

Question

What does it mean that the Peak Housing REIT is "evergreen"?

Answer

An "evergreen" structure means the Peak Housing REIT has an indefinite term, and investors can enter and leave the fund throughout the length of this term.

Question

How is my investment more diversified in the REIT?

Answer

As a shareholder of the REIT, investors own a small portion of many different properties in different markets rather than owning a single asset or limited number of assets. The REIT will provide similar benefits of appreciation, depreciation tax sheltering, and income (in the form of dividends) without the workload.

Question

How do I get more detailed information on the REIT?

Answer

You can check out the Private Placement Memorandum and other detailed information by going to https://invest.peakhousingreit.com/ and hitting "Get Started." This will provide access to our Investor Portal where more information is readily accessible.

Question

Can you tell me about The Peak Group's experience?

Answer

The Peak Group's leadership team has over 20 years' experience and has overseen over $100M in investment transactions. Governance is provided by a Board of Directors and a Board of Advisors.

Question

What is the advantage to investing with The Peak Group?

Answer

The Peak Group is a vertically-integrated group of companies headquartered in the DFW area that manages each stage of successful single-family rental operation. Whether it's acquisitions, the full development stack of build-for-rent communities, property management, maintenance, or title, we have experience in every aspect of real estate. Over the past twenty years, we have done over $100m worth of profitable single-family projects.

Question

What is an "UPREIT"?

Answer

The term "UPREIT" can be a little confusing as it carries two meanings. One is as a noun, an acronym for Umbrella Partnership Real Estate Investment Trust. This is the entity type of the Peak Housing REIT. It is also a verb which refers to the act of contributing real estate portfolio equity into the REIT as an investment ("I am going to UPREIT my properties to the Peak Housing REIT.").

Question

What are the benefits of an UPREIT?

Answer

Passive Income, Tax Advantages, Diversification, Estate Planning, Click here for more information

Question

How do you evaluate neighborhoods in a selected market?

Answer

We use data-driven analysis to select neighborhoods to buy and build. We target neighborhoods: with more owners than renters, that are surrounded by homes that are higher than median market values, where the median income is greater than 30% of average rent and where annual rents are growing faster than the overall market.

Question

Why did you launch the Peak Housing REIT?

Answer

Our objective is to provide stockholders with risk-adjusted returns through high-yield investments in stable, income-producing rental homes. We believe that the properties we select and our organizational structure will enable us to:

  • Preserve and protect our investors' capital
  • Provide our stockholders with long-term income via stable cash distributions to achieve an attractive distribution yield
  • Realize growth in the net asset value (NAV) of our portfolio of properties as a result of proactive investment and asset management
  • Provide a superior investment vehicle for investors looking to access the benefits of residential rental real estate with lower volatility than publicly-traded real estate companies (including other REITS).

Question

Why does The Peak Group prefer single-family rentals (SFR)?

Answer

Single-family rentals as an investment have NEVER had more tailwinds than they do right now.

  • Institutional investors like Invitation Homes and American Homes 4 Rent control less than 5% of all single-family rentals.
  • Baby Boomers own the majority of these properties and are ready to exit the market.
  • Choosing to be a long-term resident rather than homeowner is on the rise across every age group.
  • The shortage of new homes being built continues to put upward pressure on home prices, making leasing the more attractive option.

Question

What is the Peak Housing REIT?

Answer

The Peak Housing REIT is a private, non-traded real estate investment trust (REIT) that primarily owns and operates single-family, duplex, quad-plex, build-for-rent, and other multi-family rental housing units that meet the growing demand for workforce housing. These units are rented for income in high-growth markets in Texas and across the South and Midwest.

Question

What is the minimum investment?

Answer

The minimum cash investment for an accredited investor is $25,000.

Question

Why did The Peak Group decide to form a REIT?

Answer

We strongly believe that all investors should own real estate as part of their portfolios. However not all investors should actually be on the title. In other words, having to make decisions pertaining to individual properties is NOT for everyone. We wanted to create an opportunity for investors to take advantage of the experience we have gained as operators without the associated risk of holding title.

Question

What is a 721 exchange?

Answer

In a 721 exchange, or "UPREIT exchange,” an investor contributes property to a REIT in exchange for units in an operating partnership. OP Units are valued in the same manner as shares. If the investor would like to liquidate any portion of their OP Units, they will be converted into shares first and then redeemed, at which point they are considered taxable income.

Question

What are the benefits of a 721 Exchange?

Answer

Due to the structure of a 721 exchange, an investor's equity is contributed to the REIT in exchange for OP Units, rather than being sold outright in exchange for cash proceeds. Since no actual sale takes place, the investor would avoid the costly taxes associated with a typical sale and be able to use 100% of the equity in their property to obtain OP units in the REIT. Additionally, OP Units can be passed to heirs with a step-up in basis, which significantly reduces the amount of capital gains tax and eliminates the extensive workload of liquidating a real estate portfolio.