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Unique Investment Opportunity.

Invest Cash or Real Estate Assets.

The SMI Legacy Fund is run by a team of real estate, investing, accounting, and law experts. Our fund focuses on value-add investments throughout the Pacific Northwest. When you pool your portfolio with ours, by utilizing our 721 Exchange Program, we are able to accelerate net operating income and equity growth for our combined real estate holdings.

SMI Fund Management brings a significant amount of industry knowledge and experience, and couples it with unique approaches to investment and tax advantages, like our 721 Exchange Program, where investors may complete a tax-deferred contribution of real property, utilizing Section 721 of the Internal Revenue Code, in exchange for membership units in our managed fund. Our team’s goal is to bring their experience to assist other investors to grow their respective portfolios through SMI Fund Management’s Legacy Fund by acquiring value added properties, utilizing our 721 Exchange Program, enabling estate planning benefits, maintaining the four benefits of real estate ownership, and diversifying portfolios.

Legacy Fund - SMI Fund Management

Benefits of Real Estate Ownership through the Fund:

Retention of the Four Economic Benefits of Real Estate Ownership

The SMI Legacy Fund is a pass-through entity, in the form of a limited liability company (“LLC”). Investors maintain direct participation in the four economic benefits offered through real estate investments. Investors own membership interests in the SMI Legacy Fund, LLC (the “Fund”), and therefore participate on a pro-rata portion of the four economic benefits offered by each real estate asset the fund owns. To summarize these four benefits:

  1. Spendable Income (i.e. Cashflow). The Fund invests almost exclusively in income producing real estate assets. Net rental income, that amount leftover after paying operating expenses and debt services, and after allowing for sufficient operating reserves, is distributed to investors of the Fund on a quarterly basis.
  2. Principal Reduction. The Fund utilized a modest amount of leverage, typically around 50% to 60% LTV, to improve overall yield for its investors. Assets are scheduled to positively cashflow while amortizing debt on a 20–30 year schedule, providing the opportunity for long term wealth accumulation through principal reduction and debt payoff.
  3. Tax Shelter. Investors benefit from additional depreciation as the Fund makes new acquisitions and exchanges into larger assets. Additionally, the Fund utilizes cost-segregation, when appropriate, to accelerate depreciation losses for its investors.
  4. Appreciation. Investors benefit from organic appreciation of the diversified portfolio. Additionally, the Fund targets value-add investment opportunities in multiple real estate assets classes to accelerate appreciation opportunities and overall return on investment.

Limited Liability
Investors own membership interests in the Fund, organized as an LLC, alleviating the investor of tort and debt liability through direct ownership of real property. Additionally, the Fund’s operating agreement prohibits an investor from being required to ever make an additional contribution or “capital call.”

Depreciation
Investors maintain their existing individual depreciation schedule. Investors may gain additional depreciation on a pro-rata basis as the Fund makes acquisitions and grows its portfolio. Additionally, the Fund often utilizes cost-segregation to accelerate and increase its depreciation benefit to its investors.

Consistent Income
Investors receive quarterly distributions of all spendable income earned by the Fund.

Diversification
Investors own membership units in the Fund and a corresponding pro-rata interest of the diversified real estate holdings of the Fund, all while preserving their passive pass-through tax treatment.

721 Exchange Benefits
In addition to the foregoing advantages of investing into the Fund, there are other potential benefits described in our 721 Exchange page.

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Time.

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Enjoyment.

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Consistency.

Legacy Fund - SMI Fund Management

Enjoy your time and income without the hassles of property management, negotiating with lenders, or vendors. No building improvements to oversee, no rent increases to post, no tenant conflicts to manage, and no rules and regulations to track. The Fund is focused on providing consistent, increasing passive income to its investors.

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Active Management.

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Upside.

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Diversification.

Legacy Fund - SMI Fund Management

The SMI Fund Management team takes care of all facets of property and asset management. The Funds real estate portfolio is taken care of properly so as to maximize potential upside through proper maintenance, increased rents, and efficiencies of scale. The SMI 721 Exchange diversifies your risk by balancing its portfolio with various asset classes in varying locations. The Fund utilizes debt at more modest levels to preserve a higher ratio of cashflow to interest expense (debt service coverage ratio), and providing greater risk mitigation during times of volatility.

Prospective investors are not to construe the contents herein, or as described above, as legal, business, tax, accounting, investment or other advice.  Each prospective investor should consult its own advisers as to legal, business, tax, accounting, U.S. Employee Retirement Income Security Act of 1974, as amended, and other related matters concerning an investment in the Fund. Any reference to contribution and investment herein is not an offer to sell to any person, or a solicitation to any person to buy, such interests in any state or jurisdiction in which such an offer or solicitation would be prohibited by law or to any person who is not an “accredited investor” as defined in Regulation D under the Securities Act.