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MINI Risk

Real Estate Funds: How EOG High Growth Fund Works

 

 

Q: What are the benefits of investing in a fund? 

A:

1) When high net worth individuals or financial institutions invest in EOG real estate funds, they can expect a fund that combines high returns with low volatility.

2) Investors expect to rely on the fund management experience of EOG to screen thousands of properties in conjunction with EOG’s proprietary underwriting system to identify high-quality real estate acquisition opportunities.in line with our portfolio objectives. Diversification and risk minimization is achieved by acquiring properties in different geographic locations and in differing types of commercial real estate investments..

3) Real estate funds create an opportunity for individuals and small investment groups to invest in large commercial projects that would normally exceed their capability.

4) An individual may have full control if they invest on individual projects. However, they are fully at risk for for paying property taxes, insurance, property maintenance, finding and keeping tenants and repaying any debt used to purchase a property. If not managed well the entire investment is at risk.

 

Q: What is the commitment to capital injection?

A: The investor makes a capital commitment during EOG’s initial fund raising period, and then gradually contributes capital to the maximum commitment as EOG identifies a worthwhile project to pursue. The fund manager will send a notice of payment (Capital Call) to the investor, and notify the investors in batches to pay in the capital until the actual amount needed to pursue the large scale projects are achieved.

From the initial commitment to the end of funding, can take up to 24 months. Comparatively speaking, as a lone investor, you would need to invest full amount on the first day.

 

Q: How will my capital be called during the first two years?

A: Generally, capital calls will be made over a 24-month period from entering or closing a purchase contract EOG cannot predict how evenly capital calls will be made during the two-years of an investment.

 

Q: Does the capital that an investor commits to EOG High Growth Fund immediately transfer to EOG? 

A: No. Initial capital calls are made as we buy or enter to contract, or close escrow, or after closing escrow properties for the fund. We will notify you to transfer only a percentage of the money you’ve committed for a pending acquisition. The investor’s full commitment is to be called in tranches over a period of no more than two years after the fund’s initial close.

 

Q: How is it decided how much capital to call? 

A: The amount is based on your pro-rata share of the Fund. This is calculated by investor’s commitment divided by total Fund equity. This number is multiplied by the required funds to complete an acquisition.

 

Q: When can I expect for capital return?

A: Investors can expect to receive their principle returned after Year 4. However, investors will receive principle back during the capital call period when assets are sold or refinanced.

 

Please email hello@eog-capital.com or call 919-896-8271 with any further questions.

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