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Once your proof of funds is verified, you will be official clients of the Sciturus Real Investment Group. An email will be sent to you with information available properties under or completed negotations and how you may connect with us directly to discuss your needs and answer any questions you may have.
Your job is to let us know in which properties you may be interested going forward. If there’s a specific kind of properties you wish to own, share that with the Sciturus Investment team.
Once you choose a property that you wish to own and can fund the requirements yourself, we can go forward and close on the property. If you cannot fund it on your own, we will need to look for others (investment partner(s)) that are interested in that same property that are willing to share the ownership with you.
In this phase, we will make informal visits to the property and we will attempt to lock down the prices and financing.
This phase begins when we have chosen a property and have the funds to cover the purchase of the property. At this phase, we will put in a formal offer and commit funds to the property.
We will also perform Due diligence and verify the information that had been provided is accurate.
At this time, the banks/lenders will also commit their funds. If lenders are not required, the closing will be within days; however, lender requirements and their time to process elongates this process.
We will also be working with attorneys to form the LLC and sign official purchase documents.
Then we close, and the property is yours!
Now the property is yours. Sciturus will maintain your properties for you including handling tenant needs.
Each year, you will receive payment of about 10% of what you have invested on a monthly basis (See Financial Model for more details). This means that within ten years you will have received back what you have put in AND still own the property with all benefits of ownership!
When you are interested in making bigger quick gains (capital gains), you can sell your property. Sciturus will handle the sale for you, and again, you just need to worry about signing the paperwork and collecting the money.
Below are examples of how the money flows in Real Estate transactions and how we will get paid for our services to you.
An office building in NYC generates rental income of $900,000 annually. The seller wishes to sell at $9.495M. The bank agrees to lend 70% of property value at 4.5%, 20 year amortization.
Summary of Purchase
Purchase Price: $9,495,000
Cap Rate: 9.48%
Loan: $6,646,500
Closing Costs: $101,500
Reserves: $400,000
Required funds: $3,350,000 (This is the cash you bring in)
Annual Upkeep
NOI: $900,000 (income)
Debt Service: $441,060 (expense)
Additional Reserves: $25,000 (expense, estimate)
Annual Cash flow: 433,849 (income total)
Payout
To you, the owner: $347,152 (divide by 12 for monthly, prorate by ownership percentage) - 10.36% Cash on Cash Return.
Property Management costs: $86,788
Above assumes that you were able to pay $3.35M for the purchase on your own and was able to meet the criteria for the loan (Bank covers $6.65M). An LLC will be opened up with the ownership allocation as follows:
LLC Name of Choice, LLC
85% You. You take bank liability
15% Sciturus. Sciturus will manage the property and its tenants during your ownership of this property. You can simply enjoy the recurring cash in your bank account.
In this model, you will own 85% of the property; Sciturus will own 15%. You do not need to deal with any complications as Sciturus will fully manage the property and its tenants (normally 12% of property income). There is also no brokerage fee to be collected from you (normally 15% of purchase price). You can simply enjoy the money in your bank account. This is beneficial to you because Sciturus will manage the risks and has a stake to ensure minimal loss to your investment.
Again assuming you were able to pay $3.35M for the purchase and meet the criteria for the loan (Bank covers $6.65M), but wish to own this property 100%, an LLC will be opened up with the ownership allocation as follows:
LLC Name of Choice, LLC
100% You. You take bank liability
You pay 15% of purchase price for brokerage.
In this model, you completely own the building 100%. Your fees to secure this building is 15% of the purchase price, or $1,424,250 in this example. Part of this cost may be borne by the seller.
There may be times when:
In that case, Sciturus will manage the investor relationships and help gather the necessary parties.
Suppose four (4) investors including you are investing together. An LLC will be opened up with the ownership allocation as follows:
LLC Name of Choice, LLC
14% You - investing: $670,000 (20%)
28% Investor Joe - investing: $1,340,000 (40%)
21% Investor Mary - investing: $1,005,000 (30%)
22% Investor John - investing: $335,000 (10%). John takes bank liability (15% ownership)
15% Sciturus. Sciturus will manage the property and its tenants during your ownership of this property. You can simply enjoy the recurring cash in your bank account.
In this model, Sciturus manages the investor relationships, property, and tenants (15%); each investor takes part of ownership for the amount they bring in. Additional 15% ownership is given to the person that takes the risk of using his/her credit. This is calculated as follows:
100% - 15% - 15% = 70%
20% * 70% = 14%
40% * 70% = 28%
30% * 70% = 21%
10% * 70% = 7%
Add 15% to person providing credit (7% + 15% = 22%)
Sciturus takes 15% ownership and manages the property and tenants. No additional brokerage fee will be collected from you (the buying investors).
