How do I get started to invest in Real Estate with Centrious?
Contact us and set up a phone call with a member from our team to learn more about our process or past investments(financials available upon request).
Do I have to be an accredited investor to invest?
An individual does not have to be an accredited investor, Under Regulation A, an individual can invest up to 10% of annual earnings or net worth (minus primary residence).
An accredited investor is anyone who earned more than $200,000 ($300,000 together with a spouse) in each of the prior two years or has a net worth of $1,000,000 (excluding the value of your primary residence).
What type of projects does Centrious invest in?
We target commercial and residential properties that meet our strategic objectives to minimize risk and increase the adjusted rate of return for our partners and investors.
Our analysis of properties allows projections to determine quickly if a deal is truly a deal:
We acquire properties at 60% or less of the full property value after renovations
We allot 15-20% of property value into renovations
After renovations, we refinance the property at 70% in order to pull out the down payment
What is a K-1?
To purchase real estate as a partnership, an individual will file taxes as an LLC. K-1s are a tax form used to file each investor's share of the partnership's income, gains, losses, deductions, and credits. These are provided annually so each investor can include the K-1 amount when filing their tax return.
What is the CARES Act?
Coronavirus Aid Relief and Economic Security Act (CARES) - Real Estate Tax Benefits
Due to the 2020 impact COVID-19 has brought to the United States Economy, we are all aware of the aid our government has agreed on assisting small businesses. There are few areas of importance within the CARES Act that is intended to assist the Real Estate industry and investors during this period. These tax benefits reduce current tax liabilities and provide refunds to taxpayers that have filed taxes for 2018 and 2019 based on details below:
What is the Depreciation of Qualified Improvement Property?
The 2017 Tax Cuts and Jobs Act (TCJA) had an error that resulted in a 39-year depreciation schedule for “qualified improvement property” as opposed to immediate, 100% depreciation. Qualified improvement property comprises of improvements made to the interior portion of a Non-residential building completed after the property was placed in service. The CARES Act makes these improvements eligible for 100% depreciation. This will apply to the 2020 tax year, as well as retroactively to 2018 and 2019. This will require a taxpayer to file an amended tax return, which benefits individuals with taxable income.
What is the Five-Year Carryback for Net Operating Losses (NOLs)?
Prior to the CARES Act, tax deductions for net operating losses (NOLs) could not be carried back to prior years and were limited to 80% of a business’s taxable income. Under the CARES Act, NOLs from 2018–2020 can be carried back for the five years prior to the NOL. Additionally, the CARES Act provides for a suspension of the 80% of taxable income NOL deduction limit and allows businesses to use NOLs to offset 100% of their income accruing in 2020. The 80% limit will go back into effect in 2021.
What are Net Interest Deduction Limitations?
The CARES Act increases the maximum amount of tax deductible business interest expenses from 30% to 50% of adjusted taxable income (ATI) for 2019 and 2020. Taxpayers may also elect to use their 2019 ATI, rather than their 2020 ATI, in determining their maximum business interest deduction for 2020. Special provisions for partnerships apply, please speak with a Real Estate CPA.
What are Loss Limitations for Non-Corporation Taxpayers?
In the TCJA, non-corporate taxpayers had a $500,000 limit on tax deductions claimed against other income resulting from business losses (“excess business loss limitations”). For 2018–2020, the CARES Act removes the excess business loss limitations. Taxpayers who were subject to these loss limitations on filed taxes in 2018 and 2019 may be able to amend their filings.
We strongly encourage all of our partners, investors, and participants to review the CARES Act in detail with a Real Estate CPA to understand that this is a great entry point into Real Estate Investing.
Why grow with Centrious?
Centrious has a proven track record with 10+ properties in its portfolio. Averaging annualized returns higher than that of the S&P 500. For more information about the current portfolio, submit a request on the contact us page.
What is the Cost of Capital?
Required rate of return for the projects that make sense from an investment standpoint.
What is Yield?
A real estate transaction generating a specific return, in our case, attractive returns for our investors.
What are the tax changes comparing personal and rental properties?
Your mortgage interest deduction, Home Equity Line of Credit (HELOC) and property taxes from your primary home have limits and non-deductibles but from your rental property all of that are deductible with no limits.