Knowledge base

Every question,
answered.

Fifty-nine questions asked live by real investors across seven sessions, kept in the order and the words they were asked in. Including the ones that were uncomfortable to answer.

59 questions 9 categories 7 live sessions Nothing softened, nothing left out

How to invest

9 questions

Minimums, timelines, documents, and the steps to actually get in.

What is the minimum investment for limited partners?
On Harmony Grove the minimum was $100,000. At that level a Class B investor received a 7% preferred return, roughly $7,000 a year paid quarterly, with a target of about 20% annually over a five-year hold, or around a 2x equity multiple. Minimums and terms are set per offering, so they change from one deal to the next.
Will the deck and offering documents be sent out? Can I get a copy of the presentation?
Yes. The presentation, the financial model and the offering memorandum all sit in the investor portal, and we will send them to anyone who asks. If you would rather go through them with someone, say so and we will book a call instead.
When are you aiming to close on the property?
Harmony Grove closed on 14 July 2026, fully subscribed in 65 days. Our raises have generally been oversubscribed, and the general partnership puts its own capital in first, so an equity gap has not been something we have had to solve.
What is the timeframe for this investment, and how often do new opportunities come around?
Not often, and that is deliberate. We hold to a strict acquisition screen and most deals do not pass it, so the pace is set by what clears rather than by a calendar. When one does clear, it tends to fill quickly.
What are the next steps if I am interested?
Open an account on the investor portal and review the offering memorandum, or reply to any of our emails and we will set up a call first. There is no obligation either way.
Will you share the presentation deck for review?
Yes. The full investor package, meaning the deck, the financial model and the offering memorandum, goes out on request, usually the same day.
Can we get access to the deck?
Yes, and we are happy to walk through it with you personally. We will share the due diligence as well, so you can look at it closely and decide whether it fits your own plan.
When is the closing date for this property?
On Harmony Grove we aimed to wrap the raise at the end of the month and close by mid July, and that is what happened. We move to close as soon as we can, because operational control is what lets us act on the rent lift we underwrote.
Is there an opportunity for fractional ownership if I only have $50,000 right now?
The stated minimum applies per subscription, but investors do sometimes pool capital to reach it, and several of ours started exactly that way. Ask us and we will tell you plainly whether it works on a given offering.

The deal and returns

6 questions

Structure, distributions, share classes, debt and the return profile.

How are distributions structured? Sponsors first, investors first, or everyone at once?
Limited partners are paid first. They receive their preferred return before the sponsorship team takes anything, and at exit they are paid to their target return before the sponsor shares in the upside. We only make money after you have made yours, which is the whole point of structuring it that way.
Your projection nearly doubles the property value in five years. How much of a discount are you getting today?
The discount is in the basis. Harmony Grove was bought at $103,000 per unit against a trailing six-month comparable average of $141,000, and a December 2025 sale nearby at $155,000. Replacement cost is around $200,000 per unit. The equity is built in on the day you buy rather than hoped for later.
Under what circumstances might investors not reach the targeted return?
Class A sits behind the lender and ahead of Class B, so its preferred return has priority, and in exchange it does not share in the upside. Class B carries the upside and therefore the variability. On Harmony Grove the sensitivity table ran worst case, target and best case, and the worst case still returned roughly 16.9% annually against the 20% target. Those tables are in every offering memorandum, and they are the page to read first.
What is the mortgage rate?
Harmony Grove carries 6.25%, fixed for the five-year business plan and amortized over 30 years. It is agency debt, and we deliberately did not over-leverage: loan to value is around 70%.
What is the timeframe to close, and when do returns start?
Distributions come out of the property's own cash flow, so the first one lands at the end of the first full quarter of ownership and then runs quarterly through the hold.
What type of apartment is it, and how are interests shared among investors?
Harmony Grove is a 75-unit community in Marietta, Georgia, roughly 53% two-bedrooms with the rest one-bedrooms and studios. There were two classes. Class A took a straight 11% preferred return and no share of the profit, for investors who want predictable income. Class B took a 7% preferred return plus a share of the sale, for investors who want growth alongside the cash flow. Because the renovation is capital-intensive early, part of the Class B preferred is held back in years one and two and paid out across years three to five with the exit.

Tax strategy

14 questions

Depreciation, cost segregation, K-1 losses, professional status and retirement accounts.

What are the tax benefits? Can you explain the K-1 loss?
A cost segregation study front-loads depreciation, which arrives as a paper loss on your K-1 for your accountant to apply. On Harmony Grove the study projected roughly a $35,000 first-year loss on a $100,000 investment. Whether that is useful to you depends entirely on your own income and circumstances, so run it past your CPA before you count on it.
How do people invest from a 401(k) or 403(b) without penalties or taxes?
Through a self-directed IRA. You move an existing IRA, or roll over a 401(k) from an employer you have left, to a custodian that allows private real estate. Handled custodian to custodian it is not treated as a distribution, and the growth stays inside the account. Most of our investors use cash, but this route keeps growing. Our IRA page walks through it step by step.
How much is never planning actually costing people?
More than most expect. Twenty to forty thousand a year is a common figure from straightforward planning alone, before any investing at all, and compounded across a career the gap gets large. The honest answer is that it depends on your situation, which is why it is a question for a planner rather than a webinar.
If someone puts $100,000 into a multifamily deal, how big is the paper loss from cost segregation?
Commonly around 25%, so roughly $25,000 on $100,000, allocated to you according to the operating agreement. It varies by asset and by study.
Why is one apartment building better than several single-family homes?
Mostly risk and scale. In a 75-unit building one empty apartment is a fraction of your income; in a single family home it is all of it. You also maintain one roof instead of many, carry one loan instead of many, and the value is set by the income the building produces rather than by whatever the neighbour's house sold for.
As busy professionals without time for real estate professional status, how do we still get the savings?
Most high earners in demanding careers do not qualify, and not because of the 750 hours. The test also requires real estate to take more of your time than your main profession, which for a working physician or executive it will not. A spouse qualifying is the usual route. If anyone offers to simply grant you the status, treat that as a warning rather than a solution.
Is there another way to use real estate losses against my salary?
A short-term rental is the common one. It requires material participation but not enormous hours, and the average stay has to be seven days or less. Long-term rentals are capped at $25,000 a year per property for most people. Confirm any of this against your own return with your CPA.
Which strategy gives the most back in year one?
If you have something for a passive loss to offset, cost segregation is usually the largest single lever. If you do not, the cap on long-term rental losses limits what it can do, and a 1031 exchange tends to matter more because it defers the whole gain rather than a slice of it.
Who initiates the cost segregation study on a multifamily deal?
The partnership that owns the property, at the entity level. The result then flows through to investors on the K-1, so it is not something you have to arrange yourself.
Can taxes disappear if you pass the property to your children?
Not entirely. Depreciation recapture is normally taxed at your marginal rate, and a step-up in basis at death moves it toward capital-gains treatment, after which heirs can defer further with a 1031. It reduces the bill substantially. It does not erase it.
How can you invest in real estate inside a cash balance plan?
By self-directing the plan. Rather than holding public securities it makes the investment directly, and the proceeds return to the plan and keep compounding inside it. It has to be kept at arm's length, which is exactly the kind of detail to confirm with your own adviser before you move anything.
Are there tax benefits for someone with a busy job and no time for another role?
Yes, and they do not require hours. REITs, qualified opportunity funds and syndications all work passively. In a syndication, a cost segregation done at the entity level passes the losses through to you, and as a passive investor any you cannot use carry forward rather than going to waste.
What is the most common mistake high earners make?
Two, really. Backdoor Roth conversions reported incorrectly, which are expensive and slow to unwind, and simply waiting. Almost nobody tells us they started too early.
If I take one thing from this and start this week, what should it be?
Find a tax professional who plans rather than one who only files. Filing tells you what you already owe. Planning is what changes the number, and it matters more than which vehicle you eventually choose.

Business and entity structure

5 questions

Entity setup, 1099 income, deductions, and the moves high earners miss.

Outside of real estate, what is the most common tax-saving move high earners miss?
Oil and gas comes up most often, where a large share of the investment is frequently deductible in the first year and can offset earned income. It carries a very different risk profile to what we do, so take it to your own adviser rather than acting on a general answer.
As a 1099 earner, how far can deductions go before raising flags?
It is not the count, it is the proportion. Tax authorities hold benchmarks for what each expense category normally looks like as a share of revenue for your kind of business. Claiming 30% of revenue as rent where 10% is typical is what draws attention, not the number of lines on the return.
For a practice owner, how much can the right entity save, and is it worth the paperwork?
Above roughly $80,000 of net income an S-corp election starts to save meaningfully, often five to six thousand a year or more, because distributions are not subject to self-employment tax. Some states tax S-corps in a way that erodes the benefit, so check yours before you file the election.
With the Augusta Rule, do you rent the whole house or a room, and how do you set the rate?
The rate follows the type of event rather than the room. Price a large gathering against event spaces or hotel ballrooms, and a smaller meeting against hotel meeting rooms or coworking space. Document the comparables, keep real minutes, and treat it as an actual rental, because that is what makes it hold up.
If I own an LLC and do 1099 work, how do I write off my car?
Not through the loan principal, which is not deductible. You take either actual costs, meaning fuel, repairs, interest and depreciation at your business-use percentage, or the standard mileage rate. Writing off the full purchase price in year one requires a vehicle over 6,000 pounds.

Property and due diligence

5 questions

What we found on site: roof, HVAC, plumbing, electrical and insurance.

Given the 1966 vintage, will insurance go up for the new owner?
On Harmony Grove it went the other way. We budgeted about $1,950 per door and quotes came back nearer $600 to $700, which helps net operating income. We budget insurance conservatively as a matter of course, and real quotes usually land under it.
Have you physically inspected the property? Plumbing, roof, mechanicals?
Yes, all of it. About a week and a half before the session we walked every unit, opened every door and closet, went up on the roofs with our general contractors and inspected the pipes, then ran a full audit of the lease files and the operating history. The film on our approach page is from that visit.
Why are the current owners selling?
Usually for the same reason we will sell at year five. An apartment building is a business, and people sell when their plan for it is finished and they are moving on to a larger one. It is rarely more complicated than that.
What condition are the roof and HVAC in?
On Harmony Grove, across nine buildings, the newest roof was two years old and the oldest was five. The HVAC had already been replaced by the seller. Everything we checked is expected to hold through the business plan. The age of an asset is often exactly where the opportunity sits: a 1964-vintage comparable nearby traded at $155,000 per door.
Are electrical or plumbing upgrades needed to meet code, or did the seller handle it?
The electrical work was already in the renovation plan before we made the offer, and our general contractor was on site during due diligence and quoted it at the scale we had underwritten. Nothing was a surprise. It sits inside a $1M renovation budget carrying a 10 to 15% contingency on top of it.

The renovation plan

6 questions

Budget, sequencing, and how occupancy is protected during the work.

How is the renovation funded? Are you borrowing more?
Out of the raise, not new debt. Every line is sourced and estimated with a 10 to 20% contingency on top, and on Harmony Grove we also hold a $155,000 operating reserve that sits in the bank untouched unless something unforeseen happens.
How long does the renovation take?
About twelve months end to end, in phases. Exterior first, meaning fencing, paint and the things residents see every day, before any conversation about rent. Interiors follow. People should feel they are getting something for a higher rent rather than simply being charged more.
How will the work affect rental income and occupancy? Is there a roadmap?
Exterior work starts around month three and interiors around month nine. On Harmony Grove the lowest occupancy in five years was 94%, and it was at 97% when we bought it. Year-one break-even occupancy is roughly 76%, falling to about 68% as operations improve. We renovate around three units at a time with roughly a month of downtime each, so the rent lift never comes at the cost of occupancy.
On a nearly full property, $1M seems high for renovations. Renters do not seem to want to move out.
There are two ways through it. We renovate units as they naturally turn over, and where residents want to stay we offer them a finished unit to move into and renovate the one they leave. On Harmony Grove the on-site team told us residents wanted in-unit laundry, new counters and new cabinetry, so both routes appeal. Rents there were $1,092 against a market of $1,435, and the previous manager had already planned $75 increases at renewal without any work at all. We would rather carry a budget we do not spend and return the capital than be caught short.
How is occupancy managed during the work, and will you price current residents out?
The plan is phased precisely so the property is never turning over at once, and residents paying at or near market stay through their renewal. Even after the renovation and the premium, the rents land below what the surrounding market already charges.
How do you renovate at 97% occupancy?
Slowly and in sequence. Roughly three units a month from month nine, working through the units that come free as twelve-month leases end. Where nobody moves, we offer a resident a finished unit and renovate theirs. And if someone prefers to keep their classic unit that is fine: the rent still rises around $75 at renewal and we have spent nothing to get it. If they move, we spend about $12,000 and capture about $175. Both outcomes work.

Market and rents

6 questions

The submarket, comparable rents, supply, and whether the growth holds.

Did you calculate the rent delta on a square-foot basis? The units look small.
We benchmark against the market rent of properties in the condition we intend to deliver, choosing comparables of similar vintage and similar renovation level, then take the gap between those and ours. On Harmony Grove the average rent was about $1,092 against a submarket rent of $1,435. We underwrote a $175 premium per renovated unit rather than the full $343, deliberately.
What amenities are nearby, and what is coming?
Harmony Grove sits close to the Battery Atlanta, the Atlanta United practice facility, a golf course, and roughly 38 miles of trails along the Chattahoochee within a six-mile radius. Employment nearby includes Lockheed Martin, the Home Depot headquarters, Truist, and around 80,000 jobs at Cumberland Galleria. On the property itself we are adding a clubhouse, grills and a picnic area, and refreshing the playground.
There is no new construction for two years. Does that mean nothing sizeable is coming to the submarket?
For eight quarters, nothing new is scheduled for delivery there. What exists is what people have to rent, and we can already see it in the rent roll: units that have not been touched are pushing toward market because the demand is there.
Could rents be rising simply because there is no new construction and people are moving in?
Largely yes, and that is rather the point. The market sets the rent, not us. When demand rises the comparables around us pull rents up, and the fact that this property was already achieving them before we renovated a single unit is the clearest evidence of demand there is.
Are those rents circumstantial? Could they fall?
Competing properties nearby were already charging about $1,450, so this asset was trailing its market rather than leading it. Rents can flatten, and across five-year stretches in most major cities they have gone up rather than down. We also underwrote 2 to 2.5% rent growth against a market growing around 4.1%, and there are ancillary items the previous owner never charged for, so a good part of the upside does not depend on the market at all.
What is the longest-standing resident paying?
On Harmony Grove, someone who has lived there 24 years and pays around $1,100. We met her on site. That single fact is most of the thesis: rents well below market, in a place people do not want to leave.

Risk and downside

5 questions

Recessions, stress tests, funding shortfalls, and what could go wrong.

What happens if the funding target is not reached?
Our raises have been oversubscribed, and the general partnership invests its own capital in every deal. If a gap ever did appear, that capital and the network around it would close it rather than the deal changing shape.
How would a recession affect income and returns?
Over the five years to acquisition, a period covering the pandemic and a sharp inflation cycle, Harmony Grove never fell below 94% occupied. People need somewhere to live, and rents sitting well under market have further to fall before they meet it. History points the same way: apartment rent growth was strong through 2008 as people moved out of houses, and the months after the initial 2020 shock produced some of the strongest rent growth of the decade. Even the cap-rate-expansion worst case in our sensitivity still sold at a profit.
What if you cannot raise enough from limited partners?
The same answer, and it is worth repeating because it is the question that matters: the sponsors are in the deal with their own money, the raises have historically been oversubscribed, and on Harmony Grove the operating data was already supporting the underwriting before we closed.
It sounds good. What could go wrong?
A fair question, and the right one to ask. Population growth could stop, though Atlanta is growing. New supply could arrive and stall rents, though there was none within three miles. Nobody could move out and the renovation could stall, in which case rents still rise about $75 at renewal and we have spent nothing to get it. What protects you is not optimism, it is the basis: buying at $103,000 per unit into a market trading at $141,000 to $155,000 means the equity is there before anything goes right.
Do you have a stress test?
Yes, and it is in the deck. On Harmony Grove the Atlanta market cap rate was around 5.5% and we underwrote at 5.6% to stay conservative, against a five-year forecast of compression to roughly 5.3%. The worst case, assuming no compression at all, still sold the property for $12.6 million at roughly a 16.9% annual return. That is the floor, and it is the number we were willing to buy at.

Team and track record

3 questions

Who operates the asset, and how previous deals actually performed.

Which property management company do you use, and what is their record?
Our operating partners have more than $250 million of multifamily under management, and the management firm already runs another asset in the same Atlanta submarket and has worked on three of our partners' deals there. We would rather use a firm that knows the submarket than one that only knows the spreadsheet.
How did your last deal perform against projections? Have you had one underperform?
No deal we have participated in has underperformed, which owes more to conservative underwriting than to luck. We also put our own money into every deal we ask you to put yours into.
How many deals has the partnership taken full cycle?
Claude is personally invested across ten deals. Full-cycle experience sits with our operating partners, who have taken multiple deals from purchase through sale and hold over $270 million under management, much of it in Atlanta. We would rather say that plainly than imply a track record we do not personally have yet.

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These questions were asked during investor sessions held by Mila Penn Chazak, where our founder is a founding principal, and the answers are reproduced here in our own words. Figures given for Harmony Grove describe that offering, which is closed, and are not the terms of any current or future offering. Nothing on this page is an offer to sell or a solicitation of an offer to buy any security, and nothing here is tax, legal or investment advice. Any offering is made only through formal offering documents. Targets and projections are not guarantees, real estate involves risk including the possible loss of principal, and past performance is not indicative of future results. Please confirm anything tax-related with your own CPA.