Frequently Asked questions

Investing Essentials

What is the Peak Housing REIT?

The PEAK Housing REIT is a real estate investment trust (REIT) that primarily owns and operates single-family, duplex, quad-plex, build to rent, and other multi-family workforce housing units rented for income in high growth markets in Texas, Oklahoma, and other Southern US States.

PEAK Housing REIT will utilize a unique model in the single-family rental industry to grow the portfolio of homes by offering existing owners the opportunity to exchange their portfolio into the REIT utilizing the UPREIT tax incentive. UPREITs enable landlords to trade in management headaches for a diversified portfolio of homes without an immediate tax impact.

What does it mean that the REIT is evergreen?

An evergreen structure means the PEAK Housing REIT has no expiration date.

What is the per price of Units or Shares and how are the shares valued each quarter?

Each Unit and Share price had a fixed par value of $12.16 until December 31, 2021. The share and unit price will be reassessed and updated on a quarterly basis.

What is the minimum investment?

The minimum investment is $25,000.

Who can invest in the Peak Housing REIT?

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.

How do I know if I am Accredited?

Accredited investors can invest in the Company. This is a threshold set by the federal government. 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.
How does the accreditation verification process work?
Only investors who are “accredited investors” under Rule 501(a) of Regulation D may purchase Shares of the Company. 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.”
How do I invest?

You can indicate your interest in the PEAK Housing REIT, Inc. by submitting your offer via our portal at invest.peakhousingreit.com. To invest, PEAK Housing REIT will provide you with an electronic subscription agreement and a form to verify your accreditation status.

What is Advisors Co-investment in the Company?

The principals of the Advisor, including The PEAK Group will be investing a minimum of $3,500,000 into the PEAK Housing REIT in the form of share purchase and UPREIT transactions.

What is the target return?

Peak Housing REIT seeks to acquire SFR (assets) that provide investors with a targeted 15% annualized total return.  This return projection is comprised of both quarterly dividend payments  (2%+ annualized) and of growth in the Net Asset Value of the portfolio (NAV) generated from appreciating home valuations and higher net operating income during the investment horizon. 

Can I be both an investor in the Peak Housing REIT AND transfer my existing portfolio of homes?
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 the continued investment in single-family rental assets and have invested cash alongside equity into the Peak Housing REIT.
Can I invest in the Peak Housing REIT through my solo 401k, self-directed IRA, or other retirement accounts?

Yes, you can invest in the PEAK Housing REIT as an individual, jointly with your spouse or another related person, through several different types of retirement accounts, or through an LLC, Corporation, Trust, and many other types of entities. There’s no penalty for how you choose to invest, as long as you coordinate with your custodian appropriately. Please reach out to your custodian for this process.

 

We have been approved on the following platforms: TD Ameritrade, Charles Schwab and Fidelity Investments.

After I execute my subscription agreement, when will you call my funds?

The capital is called and invested immediately after the agreement is signed. Your money begins working for you right away. Please remember that the share price is determined on a quarterly basis, and the number of shares issued to an investor is dependent on when the funds are received in the bank. For example, if an investor commits to invest $100,000 on March 31, but doesn’t fund until April 1 the share price assigned to their investment is the new price as of April 1. Share prices are determined on Jan 1, April 1, July 1, and Oct 1.

Can I add to my initial investment later?

Yes. You can increase your commitment to the PEAK Housing REIT at any time by contacting us. There is no minimum amount required to increase your commitment.

Where will my distributions come from?

Distributions will come from the cash flow generated by the PEAK Housing REIT’s properties investments.

When can I expect to receive my distributions?

Distributions will be made on a calendar-quarter basis to investors who were invested during the preceding full calendar quarter.

What if I want to re-invest my distributions?

Distribution can be automatically reinvested if you opt in to the automatic reinvestment program.

Does the Company offer liquidity?

The Company intends to make tender offers on a twice-yearly basis in June and December to investors that elect to sell their investment back to the Company at the Company’s net asset value. The tender offers are subject to certain restrictions and limitations that are detailed in the Company’s Private Placement Memorandum.

How can my shares be redeemed? Is there a penalty for redeeming my shares? What are the redemption period dates and deadlines?

While you should view your investment as long-term, we have adopted a stockholder redemption plan which may provide an opportunity for our stockholders to have their Shares redeemed by the Company, subject to certain restrictions and limitations outlined in the Private Placement Memorandum. Shares may not be redeemed under our stockholder redemption plan until the second anniversary of the date such shares were purchased. Shares held for less than 5 years will be subject to a discount, ranging from 2.5% to 10%, depending on the amount of time such Shares were held by the investor. We cannot guarantee that any funds will be set aside for the redemption plan or whether any funds set aside for redemption will be sufficient to accommodate all requests made in any period. In the event that we do not have sufficient funds available to redeem all of the Shares for which redemption requests have been submitted in any period, we plan to redeem the Shares on a pro rata basis on the redemption date.

What is an Acquisition and Development Fee and how is it charged?

An acquisition fee of 1.35% percent is paid to Peak Real Estate Advisors, LLC at the time a property is

acquired. If the Advisor builds a new home, they are entitled to a Development Fee in the amount of up to 1.35% of the development cost of the property. For example, if an asset were acquired for $250,000, the acquisition fee Peak Real Estate Advisors, LLC earns would be $3,375. This fee is paid by the PEAK Housing REIT and is used to cover costs and expenses incurred by Peak Real Estate Advisors, LLC in pursuit of PEAK Housing REIT properties.

What is the Disposition Fee?

The intent of the Company is to hold each property indefinitely as a cash flow investment. However, in certain circumstances, the Advisor may sell a property it deems to not meet the Company’s long-term objectives. The Advisor will be entitled to receive a Disposition Fee in an amount of up to 1% of the gross sales price of each Property in connection with any sale, exchange, or other disposition of the applicable Property. This fee is subordinated to the receipt by the investors of the minimum annual distribution.

What is an Asset Management Fee?

The Advisor will be entitled to receive an annual Asset Management Fee in an amount of up to 1.35% of the net asset value of the Company. This is paid on a quarterly basis. This fee is used to cover costs and expenses incurred by Peak Real Estate Advisors, LLC such as employee expenses, rent, and other business expenses.

How do the fees impact my Unit price?

All fees are Company Level fees and are reflected in the net asset value of the Company’s Shares.

What is passive income?
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.
How is my investment more diversified within the REIT structure?
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 a 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.
Can I reinvest my dividends?
Yes! Investors can compound their returns by reinvesting quarterly dividends.
What are the redemption timeline and investment liquidation processes?
The REIT has a two-year lock-up and then a redemption at 10% of existing share price between years 2-3, 7.5% between 3-4, 5% between years 4-5, and then redemption at existing value thereafter.
What are the estate planning benefits of REIT ownership?
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 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.

Our strategy

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

The Peak Group's leadership team has over 20 years of experience and has overseen over$246.5M in investment transactions as of Q4 2021. Governance is provided by a Board of Directors and a Board of Advisors.

How is the company structured and how does it work?

The Company intends to qualify as a real estate investment trust, or REIT, commencing with its taxable year ending December 31, 2020, and is structured as an umbrella partnership REIT, commonly called an “UPREIT.”   As an UPREIT, the Company will own all of its assets and conduct all of its operations through PH REIT OP, LP, its Operating Partnership. The Company, as the sole general partner of the Operating Partnership, has exclusive control over the Operating Partnership. This structure enables PEAK Housing REIT to grow the portfolio through portfolio acquisitions utilizing the UPREIT Tax structure.

Why did The Peak Group decide to form a REIT?
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.
Will the Peak Housing REIT acquire assets solely or in joint ventures?

Most assets will be solely owned by the PEAK Housing REIT. However, in certain situations, a joint venture will be created benefiting the REIT. For example, the REIT will be the general partner of Joint Venture investments of new build for rent communities. This benefits the REIT as they will receive the excess return as the general partner (referred to as the carried interest or promote).

What is the target loan-to-value ratio for investments?

The target loan to value is 60% - 70% for assets as they are added to the portfolio. However, increased leverage may be used in certain circumstances to facilitate new acquisitions. The long-term target is to maintain a portfolio-level loan to a value of 50% or less as the portfolio grows in size and the existing assets appreciate in value.

What is an UPREIT transaction and how does the PEAK Housing REIT utilize UPREITS?

UpREIT transactions involve the exchange of limited partnership units (“OP Units”) issued by the Operating Partnership (Peak Housing REIT, Inc’s limited partnership entity for the Common Stock in the entity or entities holding real estate assets being acquired by the Company. Each OP Unit is the economic equivalent of a share of Common Stock and is redeemable by the holder thereof for either cash or at the option of the Company, shares of Common Stock on or after the second anniversary of the closing of the applicable UPREIT transaction. The use of an UPREIT exchange enables the Company to acquire properties through cashless transactions, thereby allowing the Company to retain capital to acquire assets not suitable for UpREIT exchanges. The seller of the real estate in an UPREIT transaction acquires the OP Units in a tax-deferred exchange, which only becomes taxable, subject to certain limitations, upon the exchange of the OP Units for shares of Common Stock. As a result, sellers of properties will get the advantage of owning a more diversified portfolio of assets through the ownership of the OP Units, while generally being able to control the timing of the taxation of the sale.

How is the net asset value of my investment determined? How often is my investment in the Peak Housing REIT, Inc re-valued?

The Net Asset Value per Share will be calculated by the Advisor at the end of each fiscal quarter, subject to approval by our board of directors, on a fully-diluted basis, using a process that reflects several components, including (1) estimated values of our real estate assets and investments, including related liabilities, based on (a) market capitalization rates, comparable sales information, interest rates and net operating income and (b) in certain circumstances individual appraisals of the underlying real estate provided by an independent valuation expert and (2) the price of liquid assets for which third party market quotes are available including cash available. The valuation of an individual investor’s account will be determined by their respective Shareholdings multiplied by the Net Asset Value.

What is the target size of the REIT? How many properties will be in the Company?

The PEAK Housing REIT can issue up to $200,000,000 in shares, however, the company will only grow when it can purchase income-producing properties that meet the company’s risk and return objectives. PEAK Housing REIT owns over 1500 homes as of the middle of Q4 2021 and expects to grow to over 10,000 homes within the first five years after launch and to continue to grow strategically to a size that provides ample diversification and stable cash yield to investors.

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

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 a 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.

How do you evaluate potential expansion markets?
  • Focused on secondary markets where yields are higher as institutional competition remains low. Portfolio construction of higher-yielding secondary markets mixed with appreciating lower yield markets
  • Peak Construction Group develops BFR in-fill communities in the DFW market ranging in size of 20-300 units. They intently build townhomes, patio & traditional single-family dwellings, square footage ranging from 1,250-2,300 per unit.
  • Peak Group pursues a strategic focus on acquiring SFR’s (portfolio & single asset) typically priced between $125,000 and $350,000, renting to middle-income residents 

Target rents = ~30% of average income for an area. The target Price is a Gross Yield of .85 or higher.

Target homes that meet the neighborhood strengths (commuter neighborhood = smaller units vs great schools = family-sized units)

Target path of progress: maintain smart rent analysis to watch for trends where rent growth is surpassing 30% of average income, that is a positive sign of an area improving

What does build-for-rent (BFR) mean?
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.
How do you plan to grow the portfolio?

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. The 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 an 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

Tax Considerations

How are distributions taxed for investors of PEAK Housing REIT?

Stockholders of PEAK Housing REIT, Inc receive a Form 1099 at the end of the calendar year which shows their dividends and distributions received. Dividends received are taxed as ordinary income. However, any distributions above the PEAK Housing REIT’s income are considered a return of original equity in which the investor will not be taxed. How does this happen? As the PEAK Housing REIT, Inc. assets are all invested in the PH REIT OP, LP any income and depreciation produced at the PH REIT OP, LP level will flow through to the PEAK Housing REIT, Inc. The PH REIT OP, LP will utilize depreciation of each home to offset the rental income received by each home. This may result in more distributable cash flow than recognized income which will flow through to the REIT. This in turn will convert some of the investors' cash distribution received into the return of original capital instead of operating dividends.

As an investor of PEAK Housing REIT, what tax forms will I receive?

You will receive a form 1099 - D every year.

When can I expect to receive my annual tax forms?

We target to have all tax forms in investors' hands by the middle of March.

Is REIT dividend income tax-sheltered?
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.