Investment: Aron Capital Partners Fund 2
Completed
Overview
Aron Developers Inc is offering an opportunity to invest in a real estate development equity fund (the “Fund”) - Aron Capital Partners Fund II LP. The Fund will participate as equity level member in real estate development projects to acquire, renovate or reconstruct, and then sell the properties. Investment into this Fund is open only to accredited investors.
The Fund is an open-ended fund, and we intend to keep it opened in the foreseeable future. New investors can join in the Fund as long as it is open. Existing investors can also increase their commitment at any point in time. This Fund is different from our previous fund in that cash out options are available when a project is completed on a project-by-project basis.
An investor makes a commitment of an amount in the beginning, but no money is withdrawn at that point. When a project is found, the General Partner will make a capital call, asking all investors with uninvested commitments to participate pro-rata. Each investor must transfer the called capital. That portion of the investor's commitment is locked into that project for the duration of the project.
An investor can reduce his or her commitment by giving a 90 day notice. However, within such 90-day period, any investor that has provided his or her intent to reduce its capital commitment remains obligated to satisfy the terms of all capital call notices delivered by the General Partner.
When the project is completed, each investor also has the option to a) reinvest original capital and profit back into the Fund, b) reinvest only original capital back into the Fund and keep the profit, or c) keep both original capital and profit.
The Fund is structured as a limited partnership. Each investor will be a limited partner, while Aron Capital Partners Fund 2 LLC will be the General Partner for the partnership. Aron Capital Partners Fund 2 LLC is a single purpose entity created for the purpose of being the General Partner for this partnership. Aron Capital Partners Fund 2 LLC will have only one member & manager - Aron Developers Inc.
The Fund will be used as equity level capital for properties, while preferred equity will be raised through other means. As always, 1st lien debt will also be raised for each property to increase the purchasing power of the Fund.
Example
Projects
4 SFRs @ Aron Ct. (1320 Talbryn Dr. Belmont)
- Investment Amount (across all investors)
- $1,000,000
- Invested as
- equity
- Completion Date
- January 2019
1677 Whitham Ave
- Investment Amount (across all investors)
- $1,000,000
- Invested as
- equity
- Completion Date
- January 2018
10 Units @ 4170 Central, Fremont
- Investment Amount (across all investors)
- $150,000
- Invested as
- equity
- Completion Date
- 12/1/2021
18 Units @ 475 Fair Oaks Sunnyvale
- Completion Date
- 12/1/2022
Frequent Asked Questions
We don't always raise Preferred Equity for all the projects. We always try to balance risk and return for all of our investors. If it makes sense to raise Preferred Equity for a project, we will raise it on our website. Investors in Aron Capital Partners Fund II are welcome to invest in Preferred Equity also.
We don't have an upper limit on the amount we try to raise for this fund. Our objective is to continually source suitable real estate projects that will satisfy the investment returns sought by our investment Partners.
Our current constraint is the availability of suitable deals in the market. That said, we evaluate opportunities on an ongoing basis and are testing various acquisition strategies, including soliciting off-market deals.
Yes. The General Partners are responsible for all the day to day operations including fund raising and on-going investor communication, managing each of the real estate projects, deal evaluation and property acquisition, legal and accounting, etc.
It will be pro rata. We want all investors to have equal opportunity to partipate in all our projects.
This depends on the size of the project, risks involved with the project, and overall housing market outlook. The GPs will make the determination at the point of acquisition. Our goal is to balance risk and return for our investors while also ensuring that future projects can be most efficiently capitalized.
Construction soft cost covers architects, interior designers, civil engineers, permit fees, and all other fees not paid to general contractors and sub contractors.
We strive to find vendors (architects, general contractors, designers) who are willing to work at a lower rate and accept profit sharing instead. In the past, we have found this to be effective because the financial incentives are aligned with those of our investors'. Vendors who accept profit sharing are cognizant of our carrying costs and its impact on the bottom line.
We value the work performed by our real estate agents. They work very hard to bring us deals and try to close them aggressively. They are involved intimately during the design and construction process. Going forward, they are also responsible for creating marketing collaterals for pre-sale activity (3d modeling and photorealistic renderings). However, whenever we can, we negotiate with our real estate agents to provide a better outcome for our investors, but not at the cost of diminishing return.