Frequently Asked Questions:
- SMK Capital Management General
We are based out of Bend Oregon and you can schedule a call directly with the Co-Founder, Mark Khuri here.
At SMK we take a personal approach to our business and want to connect directly with each and every one of our investors.
If you want to invest in commercial real estate with us, please start here. We will then reach out to schedule a phone consultation. This will allow for you to answer questions and see if we may be a good fit.
Dr. Khuri began investing in real estate in the 1970's and Mark began in 2005. We formed SMK Capital Management in 2010.
We have been involved in over 120 investments with a combined asset value over $1.5 billion. This includes both commercial and residential real estate investments. View our track record
We do not work directly with real estate agents or brokers and do not look at the MLS to source investments.
SMK Capital leverages it’s established relationships with best-in-class operating partners. These key relationships are built over the years primarily through referrals and then by investing with and testing our partners.
When one of our operating partners sources an investment, they contact us to see if we'd like to participate. We then underwrite and analyze the opportunity to see if it meets our investment criteria. Once an opportunity passes through each category of our due diligence process, we consider it for an investment.
Yes, in 2019 volunteers of the Keiretsu Forum underwent a 4-month due diligence assessment of Mark Khuri and our Recession Resistant Fund. Their findings and final due diligence report can be viewed here.
Keiretsu is a global angel investor network with more than 2,500 accredited investor members.
The minimum investment amount per deal usually ranges between $25,000 - $50,000. We understand that investing with partners requires trust, and trust takes time to build.
We may be able to accept lower investment amounts for first time investors, connect with us and let's talk.
- Investment General
The real estate company we partner with, otherwise known as our "Operating Partners" will typically make decisions in the LLC. In some instances, SMK may have decision making rights. Please review the specific offering materials for each investment to fully understand the structure and the duties of all entities involved.
The majority of our investments are illiquid as the capital is used to acquire real estate. Investors should not invest money that is needed within the near term. In the event that an unexpected liquidation is needed, please refer to the offering documents for specific details on the withdraw process.
No, this is one of the big benefits of our investment structure. Our Operating Partners secure the debt. Investing passively allows you to avoid being exposed to credit risk. You do not need to personally guarantee multi-million dollar loans.
As an equity limited partner and passive investor, you are protected from lawsuits and liability, including lawsuits and liabilities arising from the underlying property which the fund or entity owns, and you are personally protected from any lawsuits by buyers of assets of the investment, tenants of property, other claimants against any investment property, and would be indemnified by and against any management activities.
The only risk is the money you invest. You can’t lose more than what you invest as an equity limited partner. There are no real “protections” like FDIC or other investment insurance, but in our typical structure, the risk and loss would be limited to only what you invest, and only if the entire asset base becomes worthless. Otherwise, you’re likely to see some recovery of assets even in a total liquidation, and would not have exposure beyond your invested capital.
The majority of our investments do allow self-directed IRA investments. Learn more about SDIRA's.
Although not all of our investments require you to be accredited, the majority do.
An accredited investor is an individual or a business entity that is allowed to trade securities that may not be registered with financial authorities. They are entitled to this privileged access by satisfying at least one requirements regarding their income, net worth, asset size, governance status or professional experience. Learn More Here
To be an accredited investor, a person must have an annual income exceeding $200,000 ($300,000 for joint income) for the last two years with the expectation of earning the same or a higher income in the current year. An individual must have earned income above the thresholds either alone or with a spouse over the last two years. The income test cannot be satisfied by showing one year of an individual's income and the next two years of joint income with a spouse.
A person is also considered an accredited investor if they have a net worth exceeding $1 million, either individually or jointly with their spouse. The SEC also considers a person to be an accredited investor if they are a general partner, executive officer, or director for the company that is issuing the unregistered securities.
Accreditation requires third-party verification to validate an investors accredited status. This can be done through this simple form and also at www.verifyinvestor.com.
In conjunction with our operating partner, SMK provides investors with quarterly investment updates, which reports various activities, performance and operations of the property. Annually, investors will receive a K-1 for tax reporting.
The minimum investment amount per deal usually ranges between $25,000 - $50,000.
We understand that investing with partners requires trust, and trust takes time to build. We may be able to accept lower investment amounts for first time investors, connect with us and let's talk.
- Investment Specific
Most of our investments are equity positions. We occasionally source and offer debt investments as well. Each investment offering will specify if it is an equity or debt investment.
Investors are typically purchasing shares or units in a Limited Liability Company (“LLC”) that SMK creates and manages. That LLC in turn invests into an LLC that owns real property along with our operating partners and other investors. Investors become members and earn a share of the entity that owns the property.
Most of the investments we target range between 3-10 years in duration.
We provide investors with quarterly updates and distributions. Reach out to us if you're interested in seeing examples.
One of the benefits of investing in real estate equity through limited liability companies (LLCs) is that LLCs can be treated as partnerships for tax purposes. Partnerships generally are not taxed at the entity level (other than annual franchise taxes and filing fees) and can “pass through” applicable items of income, loss and depreciation to their members.
Non-cash depreciation deductions can shelter or eliminate the amount taxable income that may be otherwise passed through to an investor from a real estate equity investment, particularly in the early stages of the investment. As a result, cash distributions received by an investor, in a year when there is no corresponding pass-through of taxable income (again, due to depreciation deductions), may result in lower or deferred taxes. Learn More Here
The special purpose entity (an LLC) you own when you invest in an equity transaction reports your annual share of income and loss and distributions on federal and state K-1s that you can then use to prepare your tax return. While the special purpose entities (the LLCs) that are formed for each equity transaction typically are Delaware entities, there may be filing requirements and tax liabilities in other states depending on the details of a particular transaction, your state of residence, and the location of the investment property.
SMK and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. See offering documents for additional details, disclosures, and disclaimers.
Disclaimer: All investments involve risk. You should consult your attorney, financial advisor, and/or accountant to understand the risks of this investment prior to considering any investment in this fund. Any projections, estimates, or targets are aspirational only. No return is guaranteed. Any information reflecting past performance is no guarantee of any current or future performance. None of the information contained in this website constitutes any offer to sell nor is any information herein the solicitation of an offer to buy any security. Securities may only be purchased through offering documents which contain details about the risks associated with an investment in the fund. Any investment details herein or in the offering materials are believed to be reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor.