The purpose of this section is to assist you in making an informed decision about your investment. Key questions you will want to ask yourself:
1. Why invest in a land syndication?
When investing in private real estate syndications, individuals are pooling their capital together for the purpose of investing in larger and more lucrative real estate projects. Real estate syndications own residential and/or commercial real estate and are secured by owning title to the land through a Limited Partner structure, in turn, providing added security for the investment.
Land syndication offers an investor with limited investment capital the opportunity to get involved and be party to the benefits of owning real estate. Through this investment opportunity individuals are able to completely remove themselves from the tasks of locating, analyzing, purchasing and managing your real estate investment.
2. How does USC choose land projects?
The land development process is continually evolving. USC must be prepared to respond to fluctuating markets trends, decreased land availability and economic trends. The successful developer stays abreast of social, economic, legal and design factors. But typical indicators of a sustainable land development include.
- Proximity to a large or growing population
- Opportunities for future growth
- Land use constraints and availability of current or potential future services
- Economic circumstances and demographics of the community
- Political climate regarding development
The property must be approved by the land acquisition division of USC, and prior to being purchased we take it through a defined due diligence process.
3. How does USC assess raw land as an investment?
In general terms, land has historically been one of the safest investments; the rationale for investing in land at the raw land stage is simply the scarcity of available lands for development. By investing in the same way as larger real estate developers, investors position themselves to profit from the change in entitlements such as use and density as development nears.
4. Why invest in a land development project by USC?
Investing in land for future development involves substantial capital, by involving investors in the process it allows USC to purchase land parcels that are usually transacted in larger acreages. The first step is to establish goals and objectives for the long tem viability of the project. This requires extensive knowledge of interrelated factors that contribute to the success of the land project. Investing in land for future development also requires specialized, seasoned professionals and management that manage different aspects of the project that include:
- Market Analysis
- Financing Strategies
- Site selection and analysis
- Master plan conceptualization
- Environmental regulations
- Site engineering and storm water management
- Design of neighborhoods and streets
- Innovation in housing types
5. How to create value and the value cycle of land?
The value of your land investment varies as it goes through the development cycle starting as raw land through to zoned, serviced land. Value, therefore, is determined and dependent on the entitlements associated with your investment at any point in time and at each and every stage through the value creation process. Several factors drive the determination of land value including current development potential, zoning entitlement, availability and proximity to services, and market supply and demand for land.
6. What will be the return on my investment?
There is no standard answer to this question as each land offering has unique characteristics that will ultimately yield a different return to the investor. There will be an Offering Memorandum available to qualified investors for each individual project describing each project in detail.
7. What makes USC a good choice for investors in the market place?
While USC charges an up front fee as disclosed in each offering memorandum, its primary financial goal is to participate proportionately with investors in the properties’ increased value through its back end participation interest. This structure ensures that USC interests are aligned with its investors. In addition, USC fully discloses the facts surrounding the purchase of the lands.
8. How does USC make a profit from these land projects?
USC charges an up front fee for acquiring the land, marketing the land and a fee over time for managing the land through to an exit strategy. USC also maintains a back end participation on each project. Back end participation is success-based ensuring all stakeholder interests are aligned throughout the project. Exit strategies will differ from investment to investment and may include the sale of all of the lands or portions thereof to third party purchasers.
9. When is the best time to invest?
Parcels are targeted so that they can begin to be developed within an estimated 3-4 years, and a targeted full exit strategy for investors from 5-8 years.
10. Who are the principals of the company?
Asking this question is also important as the company or investment is only as good as its management. The track record of the principals, speaks to a long history of honesty and integrity in the business community.