Track Record of Success
For over 35 years, MLG Capital has owned and operated real estate while successfully managing through multiple economic cycles.
- Clients are Prioritized
- Established Team
- Low Fee Structure
- Institutional-Level Reporting & High-Touch Experience
- Tax Efficiencies
- Catered to Investment Advisors
- Capital Call Process
- Enhanced Profit Sharing Terms
- MLG does not share in the profits until clients have achieved an 8% cumulative preferred return and full return of original principal (European Waterfall).
- European Waterfall cash flow structure is considered the industry gold standard for showing alignment of interest between managers and investors.
Advisors that refer or invest over $5 million per fund receive enhanced profit-sharing terms: 80% to investors and 20% to MLG.
- Across all MLG affiliate companies there are 950+ total employees, as of 12/31/23
- MLG’s team includes in-house staff of 55+ professionals who focus on a wide variety of job functions including:
- Acquisition Professionals
- Investor Relations
- CPAs, Audit Staff & Tax Directors
- Internal Fund Administration
- Attorneys and Legal
- Engineers & Land Planners
- Real Estate Brokers & Professionals
- Accounting & Asset Management
- Property Management
- The management team consists of six principals who have been investing in real estate together at MLG for an average of 28 years.
- MLG’s Investment Committee is comprised of eight individuals including Principals, Senior Vice Presidents, and Vice Presidents with diverse real estate backgrounds.
- MLG seeks to manage fees and create a low fee structure for its investors.
- 1.25% asset management fee on invested capital.
- Market property-level fees
- 24-hour access to fund-level reporting through institutional-quality investor portal.
- Audits completed annually by Deloitte & Touche, providing investors comfort over financials.
- MLG’s Investor Operations team is a dedicated service team, focused on maintaining the quality of service and investor experiences.
- Customized communication preferences allow investment advisors to determine the depth and frequency of communication based on their preferences.
- Investing in private real estate may result in tax benefits that can be a benefit to investors. While tax consequences should not be the sole driver of investment decisions, it is wise to wrap smart tax planning around successful investments. MLG uses a range of strategies to maximize after-tax cash flow including cost segregation studies, utilizing the bonus depreciation rules, and being willing to sell investments to trigger long-term capital gains.
- Cost segregation studies can be used to break up the purchase price into various components with shorter depreciable lives to maximize depreciation deductions.
- Bonus depreciation may allow investors to claim much of the depreciation benefit in the first year, which may create passive losses that are typically passed through to investors. It’s important to note that these are paper losses and not an actual loss of value.
- For investors who have passive ordinary income, passive ordinary losses may be used to offset and defer such income.
- MLG expects to produce passive losses in the range of 40-50% of investor’s initial investment in their first year of investment in our Private Funds.
- MLG has unique product offerings to cater to Investment Advisors and their clients’ unique situations:
- Our Dividend Fund is an entrance vehicle into our Fund VI. The private REIT is structured to avoid UBTI (unrelated business taxable income) and multi-state filings for foundations, endowments, and retirement accounts.
- MLG’s Legacy Fund is specifically designed for investors to contribute property. The Legacy Fund is an alternative to conventional tax deferred exit strategies like 1031 exchanges, Delaware Statutory Trusts (DSTs), and UPREITs. The Legacy Fund offers contributors of property passive ownership, tax efficiencies, member flexibility, and diversification.
- We’ve written blogs to answer common questions your clients may have about our funds:
- MLG’s capital process is aligned with advisor needs: MLG does not have a capital drawdown process over many years like many institutions where capital is locked up while the fund is raising capital.
- Instead, a rolling subscription process is utilized, and targets original equity called within approximately 3-6 months of subscription approval.
- 100% of capital commitments are called at one time.
- Capital Call Process:
- The typical investor follows the traditional distribution model (8% preferred return, full return of capital, and a profit sharing split of 70% to investors and 30% to MLG.)5
- Advisors that refer or invest over $5 million per fund receive enhanced profit-sharing terms: 80% to investors and 20% to MLG.
How We Acquire Property
MLG has developed a proprietary dual-sourcing deal flow strategy to create opportunities regardless of market cycle. Historically, MLG has been able to source ±100 transactions per month, giving us the ability to be highly selective in our review process. We target 1-2 acquisitions per month, on average.
Joint Venture (JV)
We have established numerous partnerships across the nation from which we seek real estate investment opportunities, allowing us to capitalize on local knowledge and relationships to find deals. The joint venture acquisition strategy is focused on finding real estate in positive economic markets with job and population growth.
Key Relationships: Foster relationships with local real estate partners.
Diversity: By geographic, asset type and partner/sponsor.
Deal Flow: Critical selection of the smartest investments possible.
This acquisition strategy falls within target asset classes (i.e., apartments, industrial, retail and office) and includes states where MLG is located, or a state where we have long-established and historical relationships.
35+ Years Experience: Acquisitions and relationships are time tested and proven.
Local Staff: Ability to manage with “boots on the ground.”
Reach: Owning and operating multiple properties within a given MSA.
Private Fund investors benefit from geographic, asset type, and real estate manager diversification. The Fund targets 25 – 30 investments. Below summarizes the total square feet of our historic asset holdings for owned, sold or pending transactions across all acquisition strategies, since 1987. (Data below as of 9/30/2022)
With multiple ways to serve your clients, we have real estate investment solutions that may help advisors create and maintain wealth.
With an investor-centric fund structure, accredited investors can invest their money with confidence in a fund that targets diversification, prioritized cash flow, and low leverage with a unique dual-sourcing strategy.
The fund invests in multiple asset types, states and with different real estate managers. The fund targets 25-30 investments.
Real estate takes time. The time spent building a real estate portfolio is rewarded by producing cash flow and appreciation over time through the execution of business plans to improve asset cash flow.
Low Market Correlation
Private real estate is uniquely positioned to handle a growing economy.
The Legacy Fund was specifically designed to provide owners of commercial real estate the option to dispose of their property while benefiting from an investment in a professionally managed, diversified real estate fund. Owners may contribute their property via a tax deferred transaction in exchange for units in the fund.
Assist your clients avoid the day-to-day management concerns of being a landlord, and instead rely on the professional management of MLG Capital and our affiliates.
Assets can be contributed into the Legacy Fund, likely without recognizing capital gains. Potential benefits include the depreciation of new assets acquired by the Legacy Fund which may reduce current income for taxes.
Avoid the timing constraints of selling appreciated assets or having to trade into inferior assets through a 1031 exchange.
Frequently Asked Questions
How do you explain your “low fee” model and how is that sustainable?
MLG is a fully integrated real estate firm with multiple revenue streams and 30+ year history of operations. Our low 1.25% asset management fee is on invested equity (not committed equity). No loads. No catch-ups.
What is the minimum investment?
Fund units are valued at $1 million per unit, with fractional units available. Fund VI, our current fund, has a target of $400 million in equity raise#. Investments of $200,000 or more are encouraged.
What are your targeted returns?
Our all-in investor returns for Fund VI are targeted at a 11-15% IRR (net of fees / promotes), with quarterly distributions of available cash flow.
How does investing with MLG compare with REITs?
When many people think of real estate investments, they look to public Real Estate Investment Trusts (REITs); however, REITs are highly correlated to the S&P 500 and they are exposed to public market risk & volatility.
MLG’s non-traded REIT (“Dividend Fund”) is structured to avoid UBTI and multi-state filing for foundations, endowments, and retirement accounts, without the public market risk. Portfolios with only equities and fixed-income securities can leave investments over-exposed to public market risks and volatility.
What is the anticipated time frame to return my clients capital?
MLG Capital targets return of capital within 6-8 years of investment. Return of capital is dependent on distribution from asset sales.
How does MLG achieve tax efficiency?
Our professional staff seeks to structure all acquisitions and the fund in the most tax efficient way possible.
- Cost Segregation Studies
We break up building purchases into different asset classes to maximize depreciation deductions. Third-party engineers or CPAs perform the analysis and provide key documentation to support allocation.
- Depreciation Rules
Utilizing revised bonus depreciation rules has opened the door for more generous tax write offs for both commercial and residential rental real estate.
- Selling for Favorable Tax Rates
MLG is willing to sell investments (versus holding indefinitely) to trigger long-term capital gain tax rates and the ability to use passive ordinary losses to offset other ordinary income.
All questions and answers noted on this page are generated by MLG Marketing LLC and are not assumed to be fully correct. If there is any inconsistency between these Q+As and any offering Private Placement Memorandum, Subscription Document Booklet, all which can be amended from time to time, the Private Placement Memorandum of MLG Private Fund VI LLC, will govern.
Recipients are encouraged to review the entire PPM of Fund VI and relevant fund supplements, which are available upon request.
“Manager” means MLG Fund Manager LLC, the managing member of Fund VI
“Fund” means MLG Private Fund VI LLC, a Delaware limited liability company
“PPM” means the Confidential Private Placement Memorandum for the Fund (Version 1.0), as updated by the most current Supplement
“MLG Capital” or “MLG” means the Manager’s investment Affiliates, as more fully defined in Section IV of the PPM.
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Since 1987, we’ve owned and operated real estate while successfully managing through multiple economic cycles. Partner with the premier outsourced real estate manager.