All Forum Posts by: Bruno Araujo

Hey @Basit Siddiqi, thanks for the response.  I want to be sure I understand.  

So, say I'm a nonprofit...and I have a bake sale.  An individual gives money for the cooking supplies i.e. eggs, flour, sugar.  The cookies are made, then sold thus generating revenue.  The cost of the supplies is returned to the individual along with 10% to cover the time that money was tied up during the bake sale.

And in the process, the nonprofit earned income from the sale of the cookies...for which it puts towards feeding the homeless for a day - its purpose.

What's the tax implication?

I have a client that would like to invest in one of our commercial multifamily properties.  We have an in-house 501c3 nonprofit.  What we want to do is route her investment through the nonprofit and into the commercial investment.  The goal is that any proceeds and fees we collect as a capital group would then be owned by the nonprofit - mandating they be used for our nonprofit's mission.  To me this sounds simple, legal and beneficial to everyone...but I want to make sure its being done right.  Here's the example:

1) Investor cuts a check for $100,000 to DEEDfeed, our nonprofit.

2) DEEDfeed cuts a check for $100,000 to fyre CAPITAL, our investment group.

3) Investor distributions and original principal of 100,000 are returned to DEEDfeed, and in turn to the Investor.

4) 100% of Investment Management Fees collected by fyre Capital are sent back to DEEDfeed.

5) Those Fees are now the donation to the nonprofit - And thus mandated to be spent in line with DEEDfeed's Mission and 501c3 rules.

The Investor wins by earning distributions.  The nonprofit wins by receiving a donation.  fyre CAPITAL wins by opening up a market of potential non-profit centric investors - while not collecting fees.  There seems to be some interesting tax implications though and I'm not sure how it could work.  

Enlighten me :)

@Ben Leybovich Could you elaborate on what it means to have a poor unit mix? And what is a desireable unit mix?

@Stacey C. Congrats on closing! Persistence pays.  I’m interested in buying a small Multifamily complex just like this one in an area potentially like yours and had a few questions:

1) Could you talk about the local market a bit? What area exactly, population demos, job prospects etc.

2) What are typical rents like? What’s the rental market look like?

3) While looking for properties, did you see any strong value add opportunities? 

4) Sorry for all the questions! What type of property and area is this (ABCD)?

Again congrats. Once things close and settle down, maybe we can talk some more :-)

Originally posted by @Cipriano G.:

@Bruno Araujo read wheelbarrow profits by Gino Barbaro and Michael Blanks new book financial freedom through real state investing both very good.

Ordered both. Thank you.

@Jonathan Marsh It sounds like we’re in a similar spot with the properties we’re looking for. What’s your thinking on apartment syndications? Anybody out there recommend a great multi family investing book? Perhaps one thats a bit more market focused (beyond the basics). @Russell Brazil is hitting on those topics.