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West End Investment Groups strategy is to invest in quality properties with our growing network of private investors to achieve significant returns and economies of scale for our acquisitions. We invest in a diverse blend of quality properties; including apartment complexes, office buildings, and retail centers. Our investors enjoy cash flow and tax benefits while the property value matures.
Investment Structure
West End Investment Group, LLC intends to initially raise up to $2,000,000, which will be place in an interest bearing account to be held in escrow (the “Initial Escrow Account”).
Upon the initial closing, West End Investment Group, LLC will receive an organization fee equal to 6% of the funds raised. West End Investment Group, LLC will then identify and enter into contracts to purchase one or more multifamily properties on behalf of West End Investment Group, LLC, and the initial real estate entity. Funds will be drawn from the Initial Escrow Account to acquire the multifamily properties. At the time of each acquisition, Investors will receive a promissory note from West End Investment Group, LLC evidencing their pro-rata share of the funds advance from the Initial Escrow Account. Such promissory notes will be secured by a mortgage on the multifamily properties or other commercial purchased and will bear interest at 12% per year, payable from available cash flow, as defined. West End Investment Group, LLC will then undertake and complete, on behalf of West End Investment Group, LLC, any improvements or renovations that, in its sole discretion are needed to improve the profitability and value of the multifamily properties. Funds needed to perform such improvements and renovations will be drawn from the Initial Escrow Account and additional promissory notes issues as described above. The acquisition and renovation/improvement advances are collectively referred to as “Investor Loans.” To the extent possible, West End Investment Group, LLC will seek to continue rental operations during any improvement and renovation projects. A subsidiary of West End Investment Group, LLC will receive a management fee equal to 7% of collected rents.
Upon completion of any improvement and renovations, West End Investment Group, LLC intends to re-finance the properties on a conventional basis, releasing the investors’ mortgages on the properties and granting a mortgage to the financing source. West End Investment Group, LLC will seek to obtain permanent financing equal to 80% of the appraised values of the properties. Upon refinancing, West End Investment Group, LLC will earn a development fee equal to 50% of the excess of: (a) the appraised value at the time of refinancing over, (b) the initial acquisition cost of the property plus the cost of any renovations and improvements. The proceeds of any refinancing (the “Permanent Loans”) will be used in the following order: (1) pay accrued interest on Investor Loans, and (2) pay principal on Investor Loans. Any additional proceeds may be maintained by West End Investment Group, LLC or distributed to its members. To the extent that any Permanent Loan is insufficient to repay all Investor Loan accrued interest and principal related to the specific property refinanced, such shortfall will be credited to the individual members’ West End Investment Group, LLC capital account. As a group, the Investors will hold a 25% membership interest in the project entity and West End Investment Group, LLC will hold a 75% membership interest.
On an annual basis, available cash flow from operations will be distributed as follows:
1. Accrued and unpaid interest on Investor Loans.
2. Preferred Investor Equity Return equal to 10% of Investor Capital Account Balances.
3. Funding of a cash reserve account equal to three months operating expenses and debt service on Permanent Loans.
Any remaining available cash will be distributed 25% to Investors and 75% to West End Investment Group, LLC.
Investment Risks
The investment involves a high degree of risk and is suitable only for persons of substantial financial means who have no immediate need for liquidity in their investments. In analyzing this opportunity, prospective investors should carefully consider the risk factors. These risk factors are not meant to be exhaustive of all potential risks associated with an investment in a Limited Liability Company or real estate. Each prospective investor should consult their own tax, investment, and legal advisors concerning the merits of this offering.
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