CO-INVESTING 101

The concept behind co-investing, particularly within the Arcus platform, is to empower individuals to pool their resources and invest in real estate collectively. Arcus is dedicated to this model, allowing investors to access larger or more diversified properties that might be unattainable individually. Groups of investors, referred to as "circles," come together with a shared investment goal, and each member owns a share of the property proportionate to their investment. This collaborative approach aims to democratize real estate investing by connecting like-minded individuals and streamlining the process of co-ownership.

The common legal options for co-ownership in real estate include:

• Tenancy in Common: 
  • Each co-owner possesses an undivided interest in the property, meaning they can use the entire property.
  • Shares among co-owners can be unequal.
  • An individual's share can be sold, transferred, or willed independently.

• Joint Tenancy: 
  • Co-owners hold an undivided interest in the property, similar to tenancy in common.
  • Shares are typically equal.
  • A key feature is the "right of survivorship," where a deceased co-owner's share automatically transfers to the surviving co-owners.

• Limited Liability Company (LLC): 
  • The property is owned by the LLC, and the co-owners are members of this LLC.
  • This structure offers liability protection, safeguarding members' personal assets from property-related liabilities.
  • LLCs provide flexibility in terms of management and how profits are distributed.

• Partnership: 
  • The property is owned by a partnership, with co-owners acting as partners.
  • Partners share in the property's profits and losses.

• Trust: 
  • The property is held within a trust, and the co-owners are the beneficiaries.
  • A trustee manages the property based on the trust agreement's terms.

The selection of a specific legal structure is contingent on factors such as the number of co-owners, their relationship, investment objectives, and desired levels of control and liability protection. Consulting with legal professionals is crucial to determine the most suitable structure.