Welcome to BAM Capital

Series A Units
and why you should take a second look.

Multifamily real estate syndication can be a consistent and lucrative option for passive income. However, it can be hard to find the right syndicator, the right offer, and the right type of investment. At BAM Capital, we want our accredited investors to feel confident and knowledgeable about the process. That’s why we offer an educational series, FAQs, and live webinars that are free and open to the public. 

One of the questions that we get the most at BAM Capital is what is the difference between Series A and Series B units? So, today, let’s take a deep dive into Series A Shares. 

Projected Investor Returns

Series A

0 x

EQUITY MULTIPLE

0 %

IRR

0 %

PREF

0

YEARS

*Above targets are the hypothetical capital contribution of and hypothetical sales proceeds. Hypothetical returns from (i) the operation, or (ii) a sale, of underlying assets, including, but not limited to, the timing and amount of available proceeds, have been arbitrarily included for illustrative purposes only. Returns are not guaranteed. Possibilities and examples do not represent or guarantee what the actual results.

First, the basics.

Series A units offer a targeted 10% annual return, paid out monthly, for the life of your investment. They offer stability and truly passive income.

Series A units offer monthly distribution for the life of the investment (typically 5-7 years). So, if you invest $100,000 then the targeted distribution will be $10,000 each year.

As a Series A Limited Partner, in Year 1, you’ll receive a passive loss of -$55,000 for tax purposes
via a K-1

Original Investment: $100,000
Year 1
Passive Loss

-$55,000

10% Distribution

$10,000

Year 2
10% Distribution

$10,000

Year 3
10% Distribution

$10,000

Year 4
10% Distribution

$10,000

Year 5
10% Distribution

$10,000

Capital Returned
$100,000

Capital Gain from Sale

Sum of $50,000 distributions ($10,000 per year

for five years) plus the $55,000 K-1 loss benefit

(returned Capital not included)

$105,000

Passive Income: money which flows in regular intervals without the need for putting in a considerable amount of effort to create it

 Distribution: The disbursement of cash is labeled as a distribution instead of rental income or investment income. Distributions are not taxed during the hold years of the investment. 

Passive Loss of -$55,000:  A cost segregation analysis allows for accelerated deprecation. This large passive loss gets passed onto investors through a K1. The passive loss amount is 55% of initial amount invested.

K-1: a federal tax document used to report the income, losses, and dividends of a financial entity’s partners 

The Fund has closed. Now what?

OPTION 1:REINVEST

Reinvest your funds into the next BAM Capital offering. Not only will you have the potential to earn a higher IRR, but there are significant advantages to reinvesting your funds. Reinvesting will give you another passive loss of -$55,000 (or 55% of initial amount invested), which will offset your Net Taxable Income of $50,000 from your prior investment.

Reinvest: the action of putting the profit made on a previous investment back into the same place.

Capital Gain from Sale

(pulled from chart above)

$105,000

Net Taxable Income

(Capital Gain minus original Passive Loss)

$50,000

Passive Loss

(from reinvestment)

-$55,000

K1 Carry Over

-$5,000

Taxed Owed

$0

OPTION 2:
DO NOT REINVEST

Keep your $150,000 (targeted returned capital plus distributions received) and pay the appropriate long-term capital gains tax

Long-term Capital Gains: (LTCG) the gain or loss stemming from the sale of a qualifying investment that has been owned for longer than 12 months at the time of sale

 

 

 

**Tax assumption, personal situation may vary.

Capital Gain from Sale

(pulled from chart above)

$105,000

Net Taxable Income

(Capital Gain minus original Passive Loss)

$50,000

Long Term Capital Gains

(15% from LTCG + 3.8% NIIT**)

-18.8%

Taxes Owed

-$9,400

Net Proceeds

$40,600

How does this compare to other options?

All stock examples below are based on an initial investment of $100,000. 

BAM Capital Stocks Stocks

Series A Units

Qualified dividend

/ LTCG

 

Interest Income

/ STCG

 Year 1

$10,000

$13,123

$14,451

 Year 2

$10,000

$13,123

$14,451

 Year 3

$10,000

$13,123

$14,451

 Year 4

$10,000

$13,123

$14,451

 Year 5

$10,000

$13,123

$14,451

Total Proceeds

$50,000

$65,615

$72,255

IRR

10%

13.12%

14.45%

Tax Assumptions


personal situation may vary

Reinvestment

(Option 1

above)

20% LTCG

+ 3.8% NIIT

27% blended income

tax + 3.8% NIIT

Net Proceeds

$50,000

$49,999

$50,000

Wage Increase

 

Based on initial

salary of $100,000

$13,699

$13,699

$13,699

$13,699

$13,699

$68,495

13.70%

 

27% blended

income tax

$50,001

Summary

Series A units provide targeted, consistent cash flow and a higher yield during operations whether they are your main investment choice, or if you split your investment between Series A and Series B.

About BAM Multifamily Growth & Income Fund II

BAM Capital created this fund in order to yield consistent and reliable cash flow, long-term appreciation, and accelerated tax benefits. The fund aligns with BAM Capital’s demonstrated track record of successful multifamily investing by continuing to implement our signature investment thesis, now in fund format. The fund aims for greater overall returns and lower risk through a multi-asset diversification strategy.

  • Consistent passive income
    Lower-risk assets with in-place cash flows with the ability to distribute preferred return after acquisition.
  • Significant tax benefits
    A cost segregation analysis allows for accelerated deprecation to years of ownership. This large passive loss gets passed onto investors through a K1.
  • Vertically integrated company
    In-house property management and construction allow for predictable cost reduction and value add.

The above link will take you to the free Investor Portal to view all current offerings. If you do not have an account already, please create one to view the information.

1.The above chart contains merely hypothetical examples to illustrate some differences between asset classes. Returns are not guaranteed. The possibilities and examples are not an indication, promise or guaranty of future results, of any particular return, or of any return at all. 2. BAM Capital LLC is not an investment advisor under the Investment Advisers Act of 1940 and offers no investment advice to the reader. Please contact a financial advisor or investment advisor for further information on investment advice. 3.BAM Capital LLC is not an accounting firm and offers no accounting advice to the reader. Please consult your own tax advisor for further information concerning the tax implications of any potential investment. Each prospective investor should consult its own tax and legal counsel. 4. For further information on the BAM Multifamily Growth & Income Fund II LLC, please see the full private placement memorandum. In the event of any conflict between this document and the private placement memorandum, the private placement memorandum shall control.