Since Joel Frank began Equilus Capital Partners in 2017, the private capital equity firm has sourced and procured income-producing real estate ventures throughout the Pacific Northwest.
One of their goals is to help those who have decided to sell the family farm to create an income stream able to provide for them throughout the years ahead.
“I hate to see people who’ve worked hard all their lives retire and then, as time goes on, seem to get poorer and poorer,” said Jake Carpenter, partner and vice president of investor relations. “I call it the difference between the lake and the river. They sold their farm; they pay up to 24.3% Capital Gains Tax and put the rest in checking and savings accounts and draw a monthly amount, but eventually that lake dries up.
“We focus on educating and empowering people to be the decision-makers in building a strategy to create a river of income that doesn’t dry up,” Carpenter said. “Some of these folks become like family to us. It’s not about setting them up and walking away; it is walking beside them throughout their retirement years.”
Investors receive their share of the cash available for distribution in the form of quarterly dividends along with the opportunity to participate in the capital appreciation for investments held 7-10 years. Tax deductions from the depreciation allowance and other tax benefits are also passed on to the members.
A pivotal issue in selling large properties is the ability to avoid the capital gains tax through an Equilus investment strategy.
“It puts the tax bill back in their pocket,” Carpenter said. “They can then reinvest the proceeds into income-producing real estate without the use of a 1031 Exchange, providing passive income and growth without the investor having to deal with trash, toilets and tenants.
“A lot of people do not know if or where the opportunities are in real estate these days,” Carpenter said. “They are very hesitant to invest in stocks, bonds and mutual funds and want to remain invested in real estate. Our local income-producing real estate fund provides a great option for these individuals desiring to create tax-advantaged income, growth and additional diversity with their cash.”
Those with large 401(k), IRA, or other qualified retirement accounts can transfer those funds penalty free and tax free into a self-directed IRA. Self-directed IRAs allow investors to access alternative assets such as income-producing real estate.
Investment projects are composed of a bundle of holdings that often include apartments and other multi-family dwellings, hotels, mini storage facilities and solid, fast-growing companies.
“We help people significantly increase the amount of income they can earn from the sale of their property,” Carpenter said.
The company’s current offering is the ECP Opportunities Fund I, LP; a $40 million fund registered with the Securities and Exchange Commission earlier this year. Under the current trajectory it appears the offering will be completely funded within the next two years.
“Farmers are just such amazing people,” Carpenter said. “These people have turned out a certain way because of all the blood, sweat and tears they put into these farms.
“We just want to see every dollar work to its full potential for them.”