Frequently Asked Questions

Real estate investments are comprised of two types of parties, General partners (GP) and Limited partners (LP). General Partners are typically asset managers. They are responsible for managing the property themselves or via a third party. Limited partners are passive investors who do not make decisions about the day-to-day operations of the property or a property’s management.

Seneca’s offerings are classified as Regulation D, 506(b) and 506(c) and governed by SEC regulations. Therefore, Seneca must receive verification for all investors. Accredited investors have higher incomes, high personal wealth, or have otherwise been “cleared” for these types of investments.

Yes. It would simply entail a slight difference in how an investor signs the subscription agreement and fund the deal, with no added degree of difficulty. There are some things to consider, however, such as the UBIT (unrelated business income tax), which is why Seneca recommends seeking the counsel of a CPA, licensed financial advisor, or other trusted, licensed advisors.

Regardless of the entity chosen for the investment, it will still need to be verified as an accredited investor. For example, a multi-member LLC would need to have all members verify their status as accredited investors. This can create some complications if the net worth and incomes of the multi-member LLC vary significantly. When such variations exist, members may need to consider restructuring or reallocating their wealth.

Investors often do not realize that, by moving their IRA funds into a self-directed IRA, they can diversify their retirement portfolios by investing in real estate. For Self-Directed IRA, we have preferred relationships with vendors to expedite the onboarding and can accept retirement assets for investment.

Good sponsors invest alongside LPs in their deals. If a Sponsor does not co-invest, their interests may not be aligned with the investor. If a sponsor has put together a strong deal, they should want to share in the success of a project. Sponsors often participate in multiple deals throughout the year, which is why sometimes their share in a given deal may seem relatively limited, on paper. Furthermore, most Sponsors are also the loan guarantors and require some liquidity in their personal balance sheets. Structurally, sponsors are exposed to greater degrees of personal risk than many of their counterparts.

Seneca takes a disciplined and conservative approach to leverage. On most projects, we target approximately 65–70% Loan-to-Cost (LTC) and 50–60% Loan-to-Value (LTV) at stabilization.

We size debt based on in-place, untrended cash flow, not projected rent growth, and underwrite to maintain a minimum 1.30x Debt Service Coverage Ratio (DSCR) in the current interest rate environment. This ensures our properties can comfortably service debt without relying on future assumptions.

Our objective is to optimize returns while maintaining strong downside protection, balance sheet flexibility, and long-term capital preservation.

Yes. Self-directed IRA, Solo 401k, and many other types of retirement accounts can be used for investing. As long as your retirement funds are in an account that allows for your investment discretion, i.e. Self-directed IRA, we can accept these investments. Be sure to speak with your accountant or financial advisor to discuss your possible investment options.

We do not anticipate making capital calls. When you are ready to commit to the fund, we will ask that your entire commitment be funded at that time. However, should additional capital be needed, we retain the rights to do so in the subscription agreement. Please refer to these legal documents for more details.

Once an investor executes the Subscription Agreement, they are provided with wire or ACH instructions to fund their investment. Capital is deposited directly into the designated single-purpose entity (SPE) bank account for that specific investment and administered in accordance with the operating agreement.

Distribution frequency is project-specific and dependent upon the specifics of each operating agreement. Lenders govern some distribution schedules, and the timing can be monthly, quarterly, semiannually, or annually. Changes in the distribution schedule might also be connected to changes in risk, IRR expectations, and other variables. Each fund provides its’ own set distribution schedule. Please review the fund private placement memorandum.

Communications and updates being sent to investors will vary by firm. Some firms provide information quarterly, semiannually, or even annually. Generally, riskier and more speculative investments will provide investors with more frequent communications.

Seneca sends statements to investors quarterly. All updates and communications will be accessible from the investor portal. Any additional announcements that are made, including refinance updates, disposition updates, and others, would be sent via the investor portal as well.

No. By their nature, real estate investments have a longer-term time horizon than that of stocks or bonds. Real estate investments are structurally illiquid because it can take a considerable amount of time to convert a real property into its cash equivalent. However, deals do allow for the sale or transfer of an interest in an investment. Each deal’s operating agreement will specify what needs to be done for the process to be completed. Reading these agreements, in full, will make it easier to determine how risky (and rewarding) a prospective investment might be.