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S.H.A.R.E. COMMUNITY DEVELOPMENT CORP

SCDC FREQUENTLY ASKED QUESTIONS

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*All videos and renderings that are representations of our proprietary building models were designed by our founder and are subject to changes in design upon actual construction.

F.A.Q. AT SCDC

Here are some of the most common questions asked by potential Investors about our program. With an opportunity as great as this one, it's understandable to have additional questions. You can also ask any additional questions on our Contact Us page form and get a detailed reply. Phone calls are reserved for our current investors, partners, affiliates, etc. 

Potential investors, please do not call, but submit your questions via our contact page.

GENERAL QUESTIONS

How can I become an Investor-Purchaser with SCDC if I don't qualify currently?

While we generally sell our buildings to investors that meet all qualifications already and are ready to take their financial lives to the next level, SCDC understands that there are many people that would like to get started in multifamily investing in order to elevate their financial freedom and independence who at this time don't meet all of the necessary qualifications. 

Therefore we occasionally offer services to help those individuals with seminars, webinars, or podcasts that help them to restore their credit, get the money needed for the low entry fee, and institute ways to qualify on the income level utilizing our creative methods developed from decades of experience.  You can learn more and get started at scdctexas.com.

Why does SCDC utilize this program instead of keeping all of their own buildings?

We believe that by creating a win-win-win strategy for ourselves, our investors, and their tenants, we can build more units of affordable, quality housing than we could if we financed all of our properties ourselves.

SCDC will also build and hold some of our own apartment communities as well.

Can the 4-Plex & 8-Plex buildings be built on my own land, or only in your communities?

All SCDC multifamily apartment buildings are built and sold as individual buildings, but are only built within communities developed by SCDC.  This allows us to coordinate supplies and services better in order to produce a higher quality product at the best possible price for our Investor-Purchasers.

Do I have selection options of where I want my property to be located?

In your Pre-Sale Agreement, you can reserve a building(s) in any community that we have available for Pre-Sale at the time of your agreement.

How are my taxes affected as an Investor-Purchaser?

We are not tax advisors and offer no tax advice or legal representation of such to any investor.  SCDC highly recommends each investor to seek out and obtain their own legal, tax and investment advice before doing business with SCDC.

In general, SCDC also recommends that each individual consult not only federal tax laws, but the laws of each individual state that the property is located in, as well as the resident state that the investor lives in. It is our goal to help you earn a profit. It is your responsibility to learn how to keep it and set up any necessary tax strategies to manage your investments.

Do I have selection options for things like upgrades to my building(s)?

Each community project will have a standard/upgraded features list that will show both the mechanical standard and upgraded features, as well as the aesthetic standard and upgraded features of the investment property. These standards/upgrades are enough to have a move-in-ready home for your tenants.

These features will be of the exact same quality throughout the entire community, while some design elements and furnishings may vary slightly based on what our designers and furniture buyers purchase. Exterior features will always be exactly the same within the same community, with the exception of variations in paint color or landscape choices that still give the overall community a cohesive feeling.

Investors are not allowed to change the options of individual units, whether purchasing 1 or up to 5 units, as all units of a particular community will be of equal quality and style.  While slight variations within the same community will occasionally occur due to supply availability, the variations are not intended to give one investor a higher quality unit than any other within the same complex.
SCDC INVESTMENT GENERAL QUESTIONS

PRE-SALE QUESTIONS

What is a Pre-Sale with SCDC?

A Pre-Sale Agreement with SCDC is a reservation agreement to purchase our 1-bedroom 8-Plex and 2- & 3-bedroom 4-Plex buildings in one of our multifamily apartment community developments.  We Pre-Sale all of our buildings prior to building the communities. 

Our sales inventory is limited by the number of buildings we have committed to build in each year, so reserving is the only way to guarantee that you will have the opportunity to own one of our multifamily apartment buildings.

What is the refund policy for a Pre-Sale building?

Our Pre-Sale Agreements come with commitments on both parties and a robust refund policy for the interests of our Investor-Purchasers.  You can find some of the refund policy via our website footer, but we recommend that you read and review the entire Pre-Sale Agreement with the full refund policy.

After Pre-Sale, how long before the final contract and my building(s) built?

The time to sign the final purchase Contract can vary and the maximum time frame is clarified within the Pre-Sale Agreement.  Ultimately it depends on how soon you execute the Pre-Sale Agreement in reference to our construction ground breaking time frame for the community that your Pre-Sale Agreement is for.

What happens if I sign the Pre-Sale agreement, but the property is never built?

You would receive a 100% refund according to the terms of the Pre-Sale Agreement, no questions asked.

How do I sign the Pre-Sale Agreement and Deposit the Fee with SCDC?

Pre-Sale Agreements can be executed in person or via Docusign.  All Deposit/Reservation Fees are collected only via bank wire transfer to SCDC.
SCDC PRE-SALE QUESTIONS

INVESTOR PURCHASE QUESTIONS

What is the Price of each multifamily apartment 4-plex or 8-plex?

In general, the price of our 1-bedroom 8-Plex and 2- & 3-bedroom 4-plex range from $1,000,000 to $1,500,000; even though you can still purchase with only $5,000 total out-of-pocket costs.  Prices will vary due to location, time of year, manufacturing, amenities, changes in supply chain costs, etc. 

Your final price is set at the time the final purchase contract is executed. Your price can never increase once contracted, but can only decrease in the event the appraised amount from the 1st Lien lender's appraiser is less than the sales price after a contract is signed, which in that case would benefit the Investor-Purchaser.

Is my price guaranteed to not increase if you have cost overruns building the buildings?

Once the final sales contract is executed, your price can never increase even if there are costs overruns or delays.  Your contract is a "fixed bid" type of contract so that you never have to worry about flucuating costs or price increases, as these would all be absorbed by SCDC.

How many buildings can I buy at once or per year?

You can purchase either 1 building or a 5 building package in any of our multifamily apartment development communities. We limit each individual investor-purchaser to a maximum of 5 buildings purchased per year currently. 

If a couple or group is purchasing in the LLC, these limits apply to each invidual in the group.  So if a LLC has 5 members for example, they can purchase up to 25 buildings per year.

How does an Investor start the process of buying a new fourplex through SCDC?

The first step  to become an Investor-Purchaser is to contact us and request a Pre-Sale Agreement for the building(s) you wish to purchase.  Every building in each of our communities has a unique ID number for use with our Pre-Sale agreements. 

After reserving your buiding by completing your Pre-Sale Agreement, the next step is when your final Purchase Contract is presented for your review and execution according to the terms of the Pre-Sale agreement.  After executing the Purchase Contract, the final step is your scheduled closing at a Title Company or Law Firm to execute your financing agreements.

Do I purchase the building(s) in my personal name? And what if there is a group of us?

All SCDC buildings sold and utilizing our Investor-Purchaser $5000 total out-of-pocket program must be purchased in the name of a LLC, with the qualifying individual personally signing and guaranteeing the loans.

In some cases, multiple members of the LLC may be asked to sign the loan documents, and in other times only 1 qualifying member may be asked to sign and guarantee the loans. If an individual is purchasing one of our buidings via 100% cash or other means, they may purchase it using whatever name or entity that they choose.

How do I know if the price you are selling the building(s) to me for is a fair price?

All SCDC building sales are financed using a 3rd party 1st Lien holder who will request a 3rd party appraisal from a company of their choosing to verifty the value of the building in order to determine the Loan-to-Value percentage that they will make a 1st lien financing agreement with the Investor-Purchaser for. 

SCDC has no way to influence or change these 3rd party valuations, insuring each Investor-Purchaser that their purchase price is supported by a licensed appraised value and therefore not over-priced by SCDC.

How can I be sure the quality of your construction will meet all standards and codes?

The 1st Lien holder loans for the purchase of our buildings are "Construction Loans", meaning that once closed we are not given all of the money for the purchase until construction is 100% completed and passes all inspections.  SCDC receives money from the Lender at various stages of construction after inspections are completed by the lender before each "draw". 

SCDC also has to pass every inspection and permitting requirements by all local authorities every step of the way.  This protects the Investor-Purchaser so that they can be assured of a high quality finished product that has been fully inspected and that has passed all permiting requirements before we are fully paid for the sale.
SCDC INVESTOR PURCHASE QUESTIONS

FINANCIAL RETURNS QUESTIONS

How much Return on my Investment Purchase should I expect or am I guaranteed?

As with any Investment in the world, there are NEVER any guarantees, or it would not be called an "investment".  There are always calculated and hidden risks when engaging any investment opportunity whether it is the stock market, opening a business, purchasing property as an investment vehicle, etc. 

Our Projected Returns are based on sound years of real estate investment experience and financing models that are realistic and can face scrutiny.  Please read all our investment disclosures and risks notifications located on our website, in particular in the footer of each page.

When will I start to see monthly income after my purchase?

Once your buildings are finished being constructed, after your first tenants move in, you will start to receive monthly profits wired to you as early as 30 days, or potentially longer if rent concessions are given. 

Every month that your property generates positive income, your profit is wired to the bank account of your choosing.

How does the rate of ROI buying a building from SCDC compare to other investments?

Most savvy investors consider a rate of return of 20% per year to be excellent.  Meaning that if you invested $100,000 and received a profit of $20,000 at the end of the year, that would be an excellent investment. 

With SCDC, the potential is multiple times this amount because of our low $5,000 total out of pocket entry which gives you tremendous leverage in your investment, thus making the percentage returns many times the multiple of what is considered an excellent investment rate of return by most experienced investors.

Is $15,000 the minimum and $25,000 the maximum annual income for 1 building?

Those numbers are our average Projected Net Returns per building on an annual basis.  Many factors affect the final net income of a building, but there is no minimum or maximum amount that the income could be. The projected returns used assume the buildings are rented all the long term traditional renters. 

If units out of a 4-Plex or 8-Plex building are for example instead reserved for corporate or Airbnb type short term renters, the potential profits could be much higher, but also come with a risk of not securing those rentals which could make the income lower, or non at all. 

Each investor can choose how they want to rent their apartments with our property management company.

What happens if I don't make any profit or potentially lose money?

SCDC and our subsidiary companies can not guarantee any rate of return on investment or profit.  You could break even or potentially lose money if the rent your property generates does not cover the associated costs of the debt and management of the property. 

Since SCDC is also one of your Lenders, it is in our best interest to insure that your property generates income to protect our lending interests.  You are always able to sell, refinance, or do whatever you want with your property, limited only by your contracts, in whatever way that you feel benefits you as the Investor-Purchaser first and foremost.
SCDC FINANCIAL RETURNS QUESTIONS

FINANCING QUESTIONS

Who are the lenders that will be financing my purchase(s)?

SCDC has relationships with several preferred lenders that will finance your 1st lien on your building(s).  In addition to the 1st Lien, SCDC (or a subsidiary company of SCDC) will also be your lender and carry a 2nd Lien on the property(s). 

We utilize additional creative financing methods that allow us to achieve 100+% financing for you which include all closing costs.

Why is it so strongly recommended to use SCDC's preferred lenders?

Our $5,000 total out-of-pocket program is not only very unique, but very complex as well.  In order to obtain these results, it is required to use our Preferred Lenders that are already vetted and set up to execute this process without difficulties.  If you choose to purchase our units otherwise, you will not be able to utilize our $5,000 total out-of-pocket program.

There are several complexities and therefore communication between parties is critical (buyers, seller, builder, investors behind the land, title companies, agents, lenders, etc., can be streamlined with one voice). Because our process is more streamlined and takes less time, SCDC can offer better pricing to the investor.

What if I still want to use my own lender?

If you choose to use your own lender, financing, or pay in any other method, you would not receive the $5,000 total out-of-pocket program, and you may or may not receive some discounts or immediate equity that we offer our investors who finance with our preferred lenders.
 
If you do choose to use your own lender, be aware of the following:

You may not get first priority in reservations due to the complexities a new lender brings and the extra work involved in training a new lender on how SCDC's process works. It may delay construction and/or closing if it is allowed under a special exception. Some contract guarantees or incentives offered when the preferred lender is used may disappear with an outside lender.

What are the interest rates for the loan to purchase the buildings?

Interest rates vary by Lender, time of year, and many other factors that determine the final rates.  We can never guarantee that a Lender will give you a certain rate or their best rates. SCDC always uses an equal or lower interest rate than the 1st Lien Holder for your 2nd Lien. 

While interest rates are important, we encourage our investors to focus on their bottom line annual net income potential for each building using our financing model compared to other financing options that may even offer lower interest rates. 

Interest rates are only 1 component of the investment scenario that will determine how much profit you earn.

Do I need to get permanent financing after the construction loan?

SCDC uses a combination of loan products to make sure your entire financing cycle is taken care of.  Most times there will be a construction loan that turns to a long term permanent mortgage for your property.

In other situations, SCDC will make sure that you are pre-approved for your permanent long term loan to kick in after construction is complete without having to requalify.

How long do I have to wait before refinancing my loans?

You can refinance your loans at any time that you can find a lender willing to do so.  You can even do cash-out refinances if your property appraises for more than the amount purchased for after you have established rental income history.
SCDC FINANCING QUESTIONS

HOA & PROPERTY MANAGEMENT QUESTIONS

How are my investment buildings managed?

All buildings developed, constructed and sold to Investor-Purchasers by SCDC will have a Homeowners Association that regulates the community, and come with a property management agreement for the properties to be managed by S.H.A.R.E. PROPERTY MANAGEMENT, LLC, a subsidiary of S.H.A.R.E. COMMUNITY DEVELOPMENT CORP. 

You will have an opportunity to view these agreements in full along with your legal counsel before executing any final purchase contracts.

What is the benefit of having an HOA and use S.H.A.R.E. Property Management?

Having an HOA insures uniformity among all of our branded communities and helps to ensure and maintain property values.  Without an HOA, buildings values would descrease just like any neighborhood without an HOA. 

Having S.H.A.R.E. Property Management, LLC to manage your property insure that you have the best possible management in place that has your interest forefront in their management style.  This is because as a Subsidiary of SCDC, who is also one of your lien holders on the property with a vested interested in your success, our property management teams understands that making sure your properties are fully occupied and collecting rents, insures the security of all of our interests as mutual business partners. 

It's a WIN-WIN scenario where your success is directly tied to the success of our property management team, insuring that we care as much about your tenants and income as you do.

Can I hire my own property management company, or manage the buildings myself?

Our contracts for purchase include an exclusive right to manage the properties, especially while you are being partially financed by the SCDC family of companies. There are contingencies in cases of extreme circumstances to exit the contract after all liens are paid off. 

We also guarantee the best service and lowest property management rates for our level of services.  So the initial answer is no, but only in special circumstances that are covered in our contract agreements.

When do I get my Certificate of Occupany and can start renting the units?

SCDC and it's subsidiaries takes care of every step of the process from construction completion to moving your tenants in.  Our property management starts to market your property for rent many times even before construction begins. 

Our construction specialists handle all permits, inspections and certificates of occupancy for you.  Every Investor-Purchaser can monitor all activity and documents via their online investor portal from any computer, tablet or mobile device. 

In the event that you would like to have an on-site visit and walk-through of your fully furnished finished apartment building(s) once completed, this can be scheduled through your Investor Relations Specialist.

How do I contact the HOA and Property Management team when I have questions?

Every Investor-Purchase with SCDC has a dedicated team of Investor Relations Specialists that are your personal concierge to handle all of your needs.  For any question or concern that you have about your property whether it is property management, insurance, sales, and even HOA, your Investor Relations team will handle all of your concerns so that only have one department to deal with. 

If you choose, you are also be welcome to sit in on HOA meetings or become a member of the board if you like and have time.
SCDC HOUSTON HOA & PROPERTY MANAGEMENT QUESTIONS
SCDC's FAQ Disclaimer:

All investments with SCDC vary by location, scope, and description. Investor-Purchasers are advised to seek their own personal legal and accounting counsel to ensure the expected outcomes are clear and in their best interests.

This FAQ is not exhaustive or all-inclusive of every investment that SCDC offers and, therefore, SCDC represents these FAQ's as general information.

You must verify with an authorized SCDC representative to make sure all information provided herein is still accurate and up to date before making any purchase decision. 
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