Frequently Asked Questions
Q: How long does each project take?
A: A single family project typically runs about 10-14 months.
Q: What is our liability as investors?
A: You are limited partners of each LLC. Your only exposure is your capital investment, nothing more.
Q: How much do you pay the investors for capital?
A: Each deal is a little different. But typically, the investors get paid a Preferred Return for the duration of the project. This is usually 13.5% and I build it a bonus structure to make sure that if the project exceeds expectations that then the investors can be a part of that success. When the bonus occurs, it usually creates an ROI in the high teen range with regards to returns.
Q: What happens if the house does not sell at first?
A: My goal is always to protect the investors while getting the highest sales price as possible. If we don’t receive offers during construction completion, then I will reduce the price as necessary to sell the asset in a timely manner.
Q: What if the project only profits a small amount?
A: The first money out is to the investors so any profit made goes to them first. If there is not enough profit to fully vest, then it is sent back in proportion to what each capital investor contributed versus what was needed.
Q: How many projects have you done?
A: We have built and sold 23 units since Fierman Development, LLC began.
Q: How often do you get to the bonus?
A: Based on the past records, the bonus occurs two thirds of the transactions.
Q: Other than single family houses, what other projects have you done?
A: We have built and are currently building townhouses. Due to the higher risk, these pay out a higher return. The last project created a return at 27% of capital invested.