Mr. Murphy has grown the business from a start-up and has overseen the acquisition of over $900,000,000 worth of real estate projects in Canada, the United States and Mexico. He has been directly involved in the acquisition, financing and re-development of 31 multifamily properties totalling over 3,000 residential units with a retail value in excess of $350,000,000; and five resort projects with a retail value in excess of $150,000,000.
Mr. Borgal is the President of 20|20 Investment Inc is responsible for developing the overall strategy of the business, as well as engaging key resources, budgeting, developing the timing for each offering and the overall performance of these offerings. Mr. Borgal has been involved with real estate projects located in Canada, the United States and Mexico. Since joining the company in 2005, Mr. Borgal has been instrumental in the acquisition of ten multifamily properties totalling 1,678 residential units with a retail value in excess of $300,000,000.
Mr. Mallmann is the Chief Operating Officer of 20|20 Investments Inc. Mr. Mallmann is an accomplished senior executive with an extensive background in corporate finance, real estate investment, finance, acquisitions, development and asset management gained over a 20 year career. Most recently, he oversaw the acquisition and financing of a US$240,000,000 portfolio of Class A multifamily properties totalling 1,200 units for condominium conversion for the 20|20 Group of Companies. Mr. Mallmann also developed investment strategies focused on value-added opportunities, including the analysis and identification of condominium conversion and development opportunities in major U.S. markets, such as Dallas, Texas, Phoenix, Arizona, Las Vegas, Nevada and Atlanta, Georgia. From 1998 to 2003, Mr. Mallmann was the President, Chairman and Chief Executive Officer of Del Cano Properties Trust where he led the successful turnaround of a distressed Real Estate Investment Trust (REIT) with a US$100,000,000 portfolio of 11 apartment properties located in Arizona and California.
The 20|20 Group of Companies (20|20) consists of three business units, 20|20 Properties Inc., 20|20 Resorts Inc. and 20|20 Investments Inc. 20|20 Properties was the first company to be launched in 2001, at which time John Murphy, the company’s founder, brought together a management team with extensive real estate syndication experience in multi-family properties. Since then, 20|20 Properties has acquired 31 multi-family building investments in British Columbia, Alberta, Saskatchewan, Ontario, the Maritimes and Arizona for our clients and has earned a reputation as a company that offers real estate expertise and product excellence. All 20|20 investment opportunities are delivered to clients through the three business units.
We use proven investment techniques to develop exceptional apartment and condominium conversion properties, as well as strategic resort investment opportunities in diverse markets across North America. This is complemented by our unique Virtual Apartment Building strategy, which supports the purchase, financing and management of investment properties, allowing clients to build a diversified portfolio of high quality real estate investments.
20|20 has built an enviable track record for maximizing returns and minimizing risk for our clients by being in the right markets at the right time and providing strategic management solutions through our exclusive partnership with asset management professionals.
This business unit within 20|20 represents another avenue through which we can deliver on our vision of providing you with single point access to high quality real estate opportunities in diverse and growing markets. 20|20 Investments Inc. allows us to create investment vehicles that offer you the potential for strong returns with the security of real estate and the option of enjoying these returns within the tax sheltered environment of your RSP. Also, the investment offerings from 20|20 Investments Inc. are designed to position you to take full advantage of the emerging market conditions, economic realities and demographic shifts that impact North America real estate markets.
The U.S. Apartment Opportunity Fund 2008 provides you with an alternative way to invest in real estate and helps you to further diversify your investment portfolio. By investing in a diversified multi-family apartment fund, you will hold a conservative investment that offers asset diversification and capital appreciation.
The U.S. Apartment Opportunity Fund 2008 has been established to invest in a diversified portfolio of multi-family apartment properties within the United States of America (or proportionate interests in such properties) in order to provide investors with ongoing positive cash flow and to provide an opportunity to enhance their return on capital. Funds received from the issuance of Units may also be invested in loans secured by mortgages of real properties, including multifamily apartment properties. The Trust’s objective is to earn a return on an investment in the 2008 U.S. Apartment Opportunity Fund of a minimum of 18% per annum.
The money invested will be returned from the lawyer’s trust account should the minimum offering not be achieved. Interest on the monies will be based on short-term bank deposit rates at that time.
Estimated Offering Costs include expenses (currently estimated to be approximately 3% of the subscription monies) of or incidental to the issue, sale and delivery of the Units pursuant to this Offering, including, without limitation, fees and disbursements of legal counsel and accountants, and the reasonable out-of-pocket expenses (including applicable taxes) of the Manager in connection with such issue, sale and delivery.
The Trust may pay a sales fee to registered securities dealers, or where permitted, non-registrants, in an amount not to exceed 8.5% of the subscription monies
The Net Subscription Proceeds will be invested as follow:
30% will be loaned to the Investment Company by way of an Investment Loan. The Investment Loan will be for a term of 5 years and may be renewed by the Trust for successive terms of one year each thereafter.
70% of the Net Subscription Proceeds will be used to acquire shares in the Investment Company
The Investment Company will invest the proceeds in limited partnership units (Property LP Units) of the US Limited Partnership (Property LP). Property LP will invest the proceeds in multifamily apartment properties in the United States of America. Pending such investment, the Net Subscription Proceeds will be invested in Authorized Interim Investments. The Manager will use its best efforts to make suitable investments of the Net Subscription Proceeds as soon as possible following each Closing.
No. The Fund’s investments in the project will be carefully managed by the Manager; however, there is no guaranteed rate of return and no guarantee of your principal investment.
Yes, the investment is RSP eligible. If you have a self-directed RSP, simply advise us of the name of your plan holder and plan number, and we will assist you with the transfer of investment funds. In the event that your plan holder will not hold this investment in your plan, we can assist you with opening a new self-directed RSP account with a trustee that will hold this type of investment in client accounts.
You will receive quarterly management reports that will note the activities of the Fund including any properties acquired and the Fund’s operating results. As well, you will be provided with annual audited financial statements and quarterly financial statements for the Fund from the 20|20 DIT.
Subscription price ranges per Unit ranges from $800 - $909. Early subscribers will pay less per unit. Subscription price is based on available pricing on the receipt date of executed subscription documents based cumulative aggregate unit sales to that date. Pricing schedule is as follows:
700 units @ $800/unit;
800 units @ $830/unit;
900 units @ $850/unit;
1000 units @ $870/unit;
1100 units @ $890/unit, and
909/unit thereafter
Distribution are based on a per unit distributions, therefore, the less you pay per Unit, the higher your returns.
The Trust will make a distribution to each Unitholder on a quarterly basis, in an amount equal to the Manager's estimate of net income and net realized capital gains of the Trust, less estimated non-capital losses carried forward, if any, for each quarter ending March 31, June 30 and September 30. For each year ending December 31, the distribution will equal an amount equal to 100% of the Trust's net income and net realized capital gains, less non-capital losses carried forward, if any, for the year, less the amounts distributed for the three previous quarters. Such quarterly distributions will be paid in arrears on the 15th day following the quarter to which distribution relates, except the December 31 distribution which will be paid in arrears on the 60th day following that quarter.
Upon their initial subscription, Unitholders may elect:
to receive distributions on all Units subscribed for by way of cash payment; or
to receive distributions on all Units subscribed for by the issuance of additional Units (at the price of US$909 per Unit).
Thereafter, on an annual basis, Unitholders may elect to alter the manner in which distributions are paid on the Units subscribed for. In each Fiscal Year, distributions will be proportionate to the number of days the Unit has been issued and outstanding in the quarter and year to which the distribution relates.
The Trust intends to distribute its net income and net realized capital gains, if any, in the year they are earned or realized to ensure that no income tax is payable by the Trust. If distributions to Unitholders are in excess of net income and net realized capital gains, if any, of the Trust, the adjusted cost base of the Unitholders' Units will generally be reduced. See Item 5.1 "Terms of Units – Distributions" and Item 6 "Income Taxes and RRSP Eligibility".
The Trust’s net income available for distribution will be distributed on a quarterly basis once all associated costs, including creating a reasonable working capital and a capital improvement fund, have been paid.
Unit-holders must be residents of Canada. If a Unit-holder becomes a non-resident, the Manager may require redemption of Units or a transfer by the Unit-holder to an affiliated resident.
No. There is no “income” or “net worth” test for potential investors in BC. You simply have to acknowledge having received and read the Offering Memorandum.
Note: This also applies to residents of New Brunswick, Nova Scotia, Newfoundland and Labrador, and the Yukon Territory.
On an investment below $10,000, you simply have to acknowledge having received and read the Offering Memorandum.
On an investment of $10,000 and above, you will have to meet the test for an “eligible investor”. An eligible investor is a person whose:
Net assets, alone, or with your spouse, exceed $400,000, or whose
Net income before taxes exceeded $75,000 in each of the two most recent calendar years and reasonably expects to exceed that income level in the current calendar year, or
Net income before taxes alone, or with your spouse, exceeded $125,000 in each of the two most recent calendar years, and reasonably expects to exceed that income level in the current calendar year.
Note: This also applies to residents of Saskatchewan, Manitoba, Prince Edward Island, the Northwest Territories and Nunavut.
Yes. To qualify the Subscriber has the relationship or qualifications pursuant to the Private Issuer Exemption as an Accredited Investor or subscribing for Units which have a Purchase Price of not less than CDN $150,000.
The definition of an “Accredited Investor”, is:
An individual who beneficially owns, or who together with a spouse beneficially own, financial assets (as defined in MI 45-106) having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds CDN$1,000,000; or ,
An individual whose net income before taxes exceeded CDN $200,000 in each of the two more recent years or whose net income before taxes combined with that of a spouse exceeded CDN$300,000 in each of those years and who, in either case, has a reasonable expectation of exceeding the same net income level in the current year; or,
A corporation, limited partnership, limited liability partnership, trust or estate, other than a mutual fund or non-redeemable investment fund, that had net assets of at least CDN $5,000,000 as reflected on its most recently prepared financial statements.
Note: For an expanded explanation of an “Accredited Investor”, please contact your Investment Account Manager.
An Offering Memorandum for the Series C Units US Apartment Opportunity Fund 2008 will be provided together with a Risk Disclosure Statement for you to review in detail. Thereafter, a Subscription Agreement together with a cheque or transfer of funds from a self-directed RSP will be required to complete your purchase.
You must purchase a minimum of eleven units and with a subscription price per Series C Unit which is equivalent to a $8,800/$9,999 investment depending on qualifying subscription price. There is no maximum number of units that may be acquired.
Online links provide access to forms; detailed step by step instructions and fee schedules are readily accessible through Investment Account Manager and online.
New Account Application Form
Transfer Authorization
Letter of Indemnity or Private Issuer Exempt Form (dependent on financial institution)
Unit-holders of Series C Units who wish to redeem their units may do so, subject to providing notice to the Trustee. Unit-holders may only redeem Series C Units in increments of not less than $5,000. Redemptions will be subject to provincial securities laws and certain other conditions as outlined in the Offering Memorandum.
The Declaration of Trust restricts transfers of the Series C Units except if required as a result of a Unit-holder becoming a non-resident of Canada. Units will not be listed on any stock exchange. In addition, provincial securities laws restrict your ability to transfer your units. This is an illiquid investment.
Because we are going into the US there is slightly more complicated investment structure than used in the Canadian Apartment Fund to minimize taxes. The cross-border nature of the investment strategy requires the insertion of the Canadian Investment Company (CanInvesco). By using the CanInvesco it ensures that we are dealing with an eligible investment for a mutual fund trust and WE ARE ON very safe grounds to satisfy the criteria for RRSP eligibility.
This structure minimizes withholding taxes and the major benefit is that it avoids Series C Unitholders having to obtain a US tax # or file US tax returns and avoids U.S. estate tax implications.
Income from the US Master LP flows back to CanInvesco. CanInvesco distributes proceeds in three ways:
by making interest and principal payments on the loan;
by repaying original equity through redemption of preferred shares; and,
by paying dividends on the common shares
CanInvesco files Canadian and US tax returns and pays any withholding taxes.
THE RESULT -- We end up with a very tax efficient structure and get as close as we can to having the same tax efficiency as a pure flow through model we would have in Canada.
Only relevant if it is outside The Trust flows through all of the income it earns to the Unit-holders since the Trust only pays tax on income earned if it fails to allocate any of this income to the Unit-holders. You will receive distributions in 3 different forms.
First tranche of money will be used to repay the loan between 20|20 DIT and the Canadian Investment Company (30% of the subscription proceeds) and this will be taxes as interest income.
The second tranche of money will be repayment of capital through redemption of preferred shares. There will be no taxation. 70% of the subscription proceeds purchased preferred shares in the Canadian Investment Company.
The balance of the remaining money to be distributed to the Unitholders will be through regular or special dividends of the common shares and will be taxes as dividend income.
By blending the investment structure in this manner we have provided the Unitholders the lowest possible taxation available. You will be taxed at your marginal tax rate on income you receive from the Trust. Of course, if you hold the Trust units inside your RSP, then any tax is deferred.
On a redemption or other disposition of Units, the Unitholder will realize a capital gain or loss to the extent that the proceeds of disposition exceed or are exceeded by the adjusted cost base of the Units, respectively. One-half of a capital gain must be included in income as a taxable capital gain. One-half of a capital loss is an allowable capital loss which may be applied against taxable capital gains realized in the year, with any excess (adjusted to reflect the appropriate inclusion rate) available for carry back three years or forward indefinitely and applied against taxable capital gains realized in those earlier or later years.
There are no U.S. tax implications for the Unitholders. There is no withholding tax requirement, no requirement to file a U.S. tax return or no U.S. estate tax exposure. The proceeds from the Series C units are investing in a Canadian corporation pursuant to “Use of Proceeds”. Income and capital gains realized are paid from the Canadian corporation to the Series C Unitholders.
In computing their taxable income, Unitholders will be required to include the income and the taxable portion of capital gains distributed to them by the Trust. Distributions not included in taxable income, other than the untaxed one-half of capital gains, will generally reduce a Unitholder's adjusted cost base of the Units held.
On a redemption or other disposition of Units, the Unitholder will realize a capital gain or loss to the extent that the proceeds of disposition exceed or are exceeded by the adjusted cost base of the Units, respectively. One-half of a capital gain must be included in income as a taxable capital gain. One-half of a capital loss is an allowable capital loss which may be applied against taxable capital gains realized in the year, with any excess (adjusted to reflect the appropriate inclusion rate) available for carry back three years or forward indefinitely and applied against taxable capital gains realized in those earlier or later years.
The tax commentary in the Offering Memorandum was prepared by the Trust’s tax advisors PricewaterhouseCoopers (PwC) and to the best of our knowledge is accurate and reliable advice. The Trust is a mutual fund Trust which is a very common corporate structure with well-established tax characteristics. The Manager believes there would be no marginal value in attempting to obtain an advanced tax ruling from CRA. Furthermore, the current practice of CRA is to avoid issuing advance tax rulings whenever possible, even in situations where the tax treatment of a particular issue is well-established
