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FREQUENTLY ASKED QUESTIONS

GET TO KNOW ASCENT

How did Ascent get started?

After investing in syndications for years, Peter and Pranay realized that there wasn’t a great educational resource for people getting started in syndications. They created a course and have had thousands of students go through it and successfully invest over $500,000,000. Despite having all the knowledge to be able to find, vet, and invest in deals themselves many students asked if they could invest in the deals that Peter and Pranay were investing in and potentially get better terms together. That’s where Ascent Equity Group started. Mith was brought on for his strategic gifts in finding and operating deals.

Ascent started doing small parts in big deals, but over time has been able to take down whole deals alongside an operator who runs the day-to-day.

Why invest with Ascent instead of another private equity firm? What sets you apart?

After investing with countless others, we realized that no one would do real estate as we would.

How long have you been in business?

Ascent Equity Group has been in business for nearly three years. However, we have been investing in syndications for many years prior to that and would partner with real estate operators in the past before. 

Have you had any exits?

Not yet, but one of the main criteria for the groups we partner with on every deal is a number of successful exits. We look at their track record very closely before partnering with them on a deal. We have a lengthy vetting process that we are happy to share.

Who is my main point of contact?

We work as a team at Ascent and the best way to reach us if you’re interested in learning more is through our email: info@ascentequitygroup.com. If you’d like to schedule an appointment with a member of our Investor Relations Team, you can find a time here that works best for your schedule. If you invest with us, we have an email specifically for you: investors@ascentequitygroup.com.

Who is on your team and what is everyone's role?

Mithulan Jepaprasan

He is the Chief Investment Officer and a principal at Ascent. He is focused on vetting new opportunities, asset management, working with our partners, overseeing the finances of Ascent, and making high-level decisions.

Pranay Parikh

He is the President and a principal at Ascent. He oversees the operations and make decisions together with Peter.

Peter Kim

He is the CEO and a principal at Ascent. He speaks to the staff and operations; making high-level decisions with Mith and Pranay.

Angelina Padilla

She is the Director of Operations and manages internal operations and our investors.

Who is on your team and what is everyone's role?

Mithulan Jepaprasan

He is the Chief Investment Officer and a principal at Ascent. He is focused on vetting new opportunities, asset management, working with our partners, overseeing the finances of Ascent, and making high-level decisions.

Pranay Parikh

He is the President and a principal at Ascent. He oversees the operations and make decisions together with Peter.

Peter Kim

He is the CEO and a principal at Ascent. He speaks to the staff and operations; making high-level decisions with Mith and Pranay.

Angelina Padilla

She is the Director of Operations and manages internal operations and our investors.

TYPES OF DEALS

Where do you invest?

Our focus has been on tax-free or reduced-tax states (at the property level). We have multi-family properties in Texas, Arizona, Wyoming, Washington, Georgia, Florida, North Carolina, and Oklahoma. 

What do your returns look like?

Each deal is different but we like value-add properties that are cash-flowing. However, returns may be lower early on with a property that needs to be stabilized. Importantly, we always present our returns as net meaning after all the fees are taken out. 

Can I do 1031 out of your deal?

1031 is a specific part of the tax code that allows investors to defer taxes. Ascent may offer this option in the future when exiting deals so our investors can defer taxes on their profits. In this scenario, we would provide investors the opportunity to do 1031 into our next offering. If investors wanted to exit, we would either buy them out or backfill their spot with another investor. If you decided to stay in, we would move your capital to the next property we purchased and this would delay the capital gain tax implications.

Can I 1031 into one of your deals?

1031 is a specific part of the tax code that allows investors to defer taxes. Typically, we are unable to accommodate people that sell their properties and want to use those funds to get into one of our deals, however, feel free to reach out to us. We are able to make it work in certain situations.

Are you worried about interest rates?

No, we are planning ahead and focused on getting the best terms possible. In some cases, we are purchasing rate caps that will cover a length of time and then saving for future rate cap purchases. People were making money in real estate when the interest rates were in the mid-teens. We’ve been spoiled a bit with low-interest rates in the 2000s. 

What types of assets do you invest in?

We buy large apartment complexes that need renovations, also called Value-add multi-family. 

What kind of debt do you get?

We usually get agency debt, Frannie May or Freddie Mac which is a security issued by a United States government-sponsored agency or federal budget agency.

How long is the hold?

Typically 3-5 years, though we may do longer holds in the future depending on the interest rates and economic conditions. We would consider longer holds for the right project.

Will there be cash flow?

Each deal is different with regard to the cash flow. It typically ranges from 3-5% in year one, then increases after that. A majority of the profits are seen on the backend at the sale of the property once we have executed our value-add business plan. 

Will there be capital calls?

A capital call is when a project needs more money to run and the sponsor would request that from the investor. We have never done a capital call. We plan a significant buffer so that we will never have to call one.

Will you refinance a property and return capital?

That is a possibility depending on the property, interest rates, economic conditions, etc. Ultimately our goal is to sell the property at a significant gain and provide excellent returns to our investors. 

What is your strategy for investing?

We are focused on finding high-quality, value-add multi-family properties across the US. We have developed partnerships with tenured groups that will bring off-market deals to Ascent and together we are able to purchase/manage the property. 

Do you have a fund or do you invest in singular properties?

Ascent has offered funds in the past, but we are focused on single deals at this point. Our investors prefer to have visibility into exactly what they are putting their money into and we have found that many don’t like the “blind pool.” We may consider a fund again in the future as we want to provide offerings that appeal to different people.

What if you can't sell after 3-5 years? Then what?

We are focused on buying properties that are cash-flowing so if we needed to hold them longer, we can continue distributing cash as the property appreciates. We may consider a refinance to pay back investors’ capital if the interest rates are competitive. This could potentially turn into an infinite return because investors would be getting a piece of the profits from their property, but have all their initial capital returned. 

WHO CAN INVEST

Can anyone invest in your deals?

We can only take accredited investors. An accredited investor is someone that makes more than $200,000 per year or $300,000 as a couple both for two years. You can also be accredited by having a net worth of over $1 million excluding your primary home. 

Do you only work with doctors?

No, we work with all accredited investors. We were started by three physicians and organically our business has grown with other physicians, but a number of our team members and investors are *not* physicians.

What is an accredited investor?

An accredited investor is someone that makes more than $200,000 per year or $300,000 as a couple both for two years. You can also be accredited by having a net worth of over $1 million excluding your primary home. 

Should I get accredited before a deal becomes available?

No, there’s no need to get accredited before a deal is available to invest in. Part of our deal process is to accredit you and we’ll cover the cost of it as well.

ACCREDITATION

How will you verify that I am accredited?

We use a third-party agency called Verified Investor. You will be asked to upload documents that are needed to verify that you qualify to be accredited. This can be either a letter from your lawyer or accountant stating that you are an accredited investor. Click here for a link to the template to give them. 

Or you can upload your bank account/paystubs. 

Do I have to be accredited to invest in your deals?

Yes, you do have to be accredited to invest in our deals. Unfortunately, this is a requirement by the Securities & Exchange Commission (SEC). 

Can I use an accreditation verification I got from a deal with another company?

It depends on where that accreditation letter came from and when it was completed. Either your CPA or attorney can provide a letter of accreditation within 3 months of the deal you are investing in with Ascent.

Should I get accredited before a deal becomes available?

No, there’s no need to get accredited before a deal is available to invest in. Part of our deal process is to accredit you and we’ll cover the cost of it as well

TAXES

Is there any way to defer taxes?

Yep! Some of our deals are eligible for 1031. 1031 is a tax code that lets you defer taxes if you buy a similar but more expensive property. 

What is the benefit of investing through an LLC or Trust instead of individually?

Because you will be investing in an LLC, you do not need to have your own LLC to invest in one of our deals for asset protection from the property. You may consider if there is a liability from you to the deal (ie. someone sues you and wants your assets). However, on paper, syndications do not have much value so are not going to be a great target for litigators. A trust can be used to invest in estate planning. 

Do I need to file state taxes in every state that I invest in?

Ascent typically focuses on states that have no state tax. For those states, you will not have to file state taxes. For the deals in states that do have state taxes, many of our investors do not file state taxes until the property sells because they just have a large negative loss until then. This, of course, is not financial advice, and you should discuss your individual case with your accountant.  

What taxes will I eventually have to pay on my returns?

Depending on your tax bracket, you’ll have to pay a certain amount of long-term capital gains on the increase in value of the property and depreciation recapture. Depreciation recapture pays back the losses that you were able to tax advantage of in the prior years before the sale of the property.

What taxes will I need to pay every year?

The tax code was written by property owners for property owners. It’s only gotten more lately. Real estate is considered a depreciating asset. The tax code says that over time it will be worthless so let you write off a certain amount of the value every year. We all know that’s just a paper loss because real estate for the past 200 years has been appreciating. This paper loss can be used against the distributions mentioned earlier to limit or cancel out any tax liability you have before the property sells. 

K-1’S

When do K-1s come out?

Usually, our K-1s will come out around March or April. We are dependent on our sponsors to get us the K-1s and we can turn them around in 1-2 weeks. We’ve had all of them come out before the tax deadline in the past, but cannot guarantee that. Most people who invest in syndications assume they will have to get extensions.

Will I have to get a tax filing extension?

In the past, all of our K-1s have come out before the tax filing deadline. We recommend talking with your accountant about the possibility of needing an extension just in case.

RETURNS/ DISTRIBUTIONS

How often are distributions?

Each deal is different. Distributions are typically monthly or quarterly depending on the partner we work with on a specific deal. 

How will I get my distribution?

You will get your distribution via ACH (automated clearing house) to the bank account we have on file for you. It usually takes 3-5 days after we send it for you to receive it. 

Can you explain the preferred return?

A preferred return is a profit distribution preference whereby profits, either from operations, sales, or refinance, are distributed to one class of equity before another until a certain rate of return on the initial investment is reached. 

Has Ascent been distributing regularly?

Every deal is different and some distribute monthly while others are quarterly. Most of our deals have been distributed regularly, though we have one partner that has chosen to hold back distributions for a few quarters to save money for rising interest rates. They would rather go this route than do a capital call. It’s important to note that the investor’s preferred return is still accruing and the payment(s) are being pushed back.

What taxes will I need to pay every year?

The tax code was written by property owners for property owners. It’s only gotten more lately. Real estate is considered a depreciating asset. The tax code says that over time it will be worthless so let you write off a certain amount of the value every year. We all know that’s just a paper loss because real estate for the past 200 years has been appreciating. This paper loss can be used against the distributions mentioned earlier to limit or cancel out any tax liability you have before the property sells. 

COMMUNICATIONS

Will we get regular updates on the property?

Yes, we send out monthly updates on each property via email. On a quarterly basis, we send out Office Hours Videos where Mith Jegapragasan shares a longer update on the property. He has weekly meetings with them and Ascent visits the property quarterly. 

Can we visit the property?

Yes, but please give us a heads-up so we can schedule the visit with the Onsite Property Management Team.