Frequently Asked Questions

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General Questions Economics Investor Experience

General Questions

Who is Birgo Capital?

Birgo Capital is a real estate investment firm that acquires multifamily, office, and retail properties in and around the Pittsburgh metropolitan area. The firm has over $110 million in assets and approximately 1,500 units under management. Its principals are Daniel Croce and Andrew Reichert, who together co-founded the firm in 2015.

What is BG Real Estate Income Fund II LP?

BG Real Estate Income Fund II LP (“the fund”) is an investment fund formed by Birgo in April of 2018. This is the vehicle that the firm is raising capital into and investing out of currently.

Who can invest in BG Real Estate Income Fund II LP?

Birgo Capital’s offerings are available to accredited investors.

An accredited investor, in the context of a natural person, includes anyone who: earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). Source: investor.gov

What is this fund’s strategy?

The fund acquires and operates stabilized but underutilized real estate in the Pittsburgh metropolitan area and the Midwest. We add incremental value to these already cash-generating properties through modest improvements and operational efficiencies, which in turn improves the Net Operating Income. Most assets acquired by the fund are Class B multifamily properties.

Why does Birgo Capital focus on workforce housing/multi-family properties?

While some storage facilities, industrial warehouses, retail space, offices, and luxury development properties might experience fluctuations in demand based on economic trends, affordable multifamily housing rentals offer a level of stability and predictability, because people will always need shelter.

Who can I speak with about investing in Birgo Capital’s Private Equity Real Estate Funds?

You can contact us and we will set up a brief introductory call with you to answer any questions you may have.

Economics

How does the general partner make money?

The general partner is primarily compensated through an incentive allocation that is tied to the performance of the fund. It also receives property management fees, brokerage fees, and other transactional/operational fees for the ongoing servicing and management of the portfolio.

How is the incentive allocation calculated?

The first 8% of annualized return goes to the investors. For everything above 8%, the returns are allocated 60% to the investors and 40% to the general partner. Investors are entitled to an 8% annualized return before the general partner is compensated for its efforts.

Do I pay a premium or penalty for coming into the fund later than other investors?

No, there is no premium paid or repricing valuation performed for late-coming investors. They simply have the benefit of seeing what assets are already in the portfolio. Earlier investors will accrue an 8% preferred return for a longer time period than later investors.

Investor Experience

Can I invest through an LLC, LP, or trust?

Yes. Investors can invest through an LLC, trust, partnership, or whichever vehicle they prefer.

How will I be kept up-to-date on my investment?

Quarterly updates on fund activity are distributed via e-mail, and all investors are encouraged to attend the annual in-person investor meeting.

Is there a place that I can log-in to see information on the fund and my investment?

Birgo utilizes AppFolio Investment Manager as a one-stop-shop portal for investors. This contains all historical legal documents, quarterly reports, and contribution/distribution history, as well as details on the properties within the portfolio.

How often will I receive distributions?

Distributions are paid quarterly, typically one month following the quarter-end. So, distributions are paid at the end of January, April, July, and October.

When will my first distribution be?

The 8% preferred return begins accruing from the date the funds are contributed, but distributions are calculated based on capital that was in the fund at the start of the quarter. If an investor invested in December, the capital will count towards distributions starting in January, and the first distribution will be in April.

Are there tax benefits to investing in the fund?

Yes, there are significant tax benefits. Generally, investors can expect to have most of the current year cash flow sheltered through depreciation of the real estate. Additionally, excess losses are often generated through accelerated depreciation, which could allow investors to reduce overall personal taxable income.

Does the fund have a third-party CPA firm review its financial statements?

Yes, the fund’s financial statements are reviewed annually by a nationally recognized CPA firm.

Will I receive a K-1? If so, when can I expect to receive the K-1 each year?

Yes, all investors will receive a K-1. Our goal is to issue K-1s by March 15th of each year..

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