How To Start A SAAS

<div class="p-3" >
                                       <h5  style="font-family: Helvetica;" >
                                        <b>
                                         Forming a Real Estate Fund
                                        </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                          Setting up a real estate fund requires legal advice in determining the investment terms, including the fund strategy and the specific needs and objectives of the fund. One of the main goals is to adequately protect fund sponsors and make the offer attractive to potential investors. Essentially, it is the fund's strategic objectives and investors' tax needs that determine the structure of the fund. The three main structures governing the addition and exit of limited partners (investors) are open structures, end structures, and continuous funds. In general, most real estate investment funds are closed-end or illiquid assets typically designed for fixed maturities of five to ten years. As a result, investors generally cannot withdraw funds or add additional capital contributions during the life of the fund, and funded capital contributions cannot be used to sell or refinance assets within the fund. It will be refunded only when positive cash flow from rentals and other income-generating businesses also rewards investors.
                                       </p>
                                       <p style="font-family: Helvetica;" >
                                         These funds offer partners significant cost savings as less structuring is required to get started.
                                       </p>
                                        <h5  style="font-family: Helvetica;" >
                                          <b>
                                            Mechanisms of domestic real estate funds
                                          </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                         <ul>
                                            In general, a net domestic fund structure includes the following entities:
                                           <li>
                                               Limited liability partnership as a fund company.
                                            </li>
                                            <li>
                                               An LLC acting as the fund's investment manager within the sponsor's jurisdiction.
                                             </li>
                                            <li>
                                               The fund's General Partner, or, in the case of an LLC, its managing director, is also incorporated within the sponsor's jurisdiction.
                                             </li>
                                         </ul>
                                         Management fees are sent to the Investment Manager once the sponsor is paid and carried interest is received.
                                       </p>
                                       
                                          <h5  style="font-family: Helvetica;" >
                                            <b>
                                              US Tax-Exempt Investor
                                            </b>
                                         </h5>
                                       <p style="font-family: Helvetica;" >
                                          Section 512(b) of the Internal Revenue Code makes certain investment income, including real estate investment income, subject to Unrelated Business Income Tax Income (or "UBTI") when derived from debt-financed property. Such distributions may subject the Fund to UBTI.
                                       </p>
                                       <h5 style="font-family: Helvetica;">
                                         <b>
                                            Offshore Investor
                                         </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                         One of the most important aspects of structuring a real estate fund is determining the investment terms. When properly structured, a real estate fund offering document contains terms that adequately protect fund sponsors and are attractive to investors. The terms of a real estate fund are determined by the fund's strategy, market trends within the fund's particular asset class, and the fund's specific needs and objectives. Investment fund legal counsel must have a deep understanding of current trends in the investment market and how these trends may affect the strategies adopted by the fund.
                                       </p>
                                       <h5 style="font-family: Helvetica;">
                                         <b>
                                           FIRPTA Considerations
                                         </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                          It is important to note that the primary concern for offshore individuals considering investing in U.S. real estate funds is FIRPTA, also known as the U.S. Foreign Investment Property Tax Act of 1980. Under FIRPTA, offshore investors are taxed on income from US real estate. Investments are taxed at very high tax rates. FIRPTA also requires offshore investors to comply with the investigative and subpoena powers of the IRS.
                                       </p>
                                       <h5 style="font-family: Helvetica;">
                                         <b>
                                            Offshore Fund Structure
                                         </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                          One of the most important aspects of structuring a real estate fund is determining the investment terms. When properly structured, a real estate fund offering document contains terms that adequately protect fund sponsors and are attractive to investors. The terms of a real estate fund are determined by the fund's strategy, market trends within the fund's particular asset class, and the fund's specific needs and objectives. It is important that investment fund legal counsel have a deep understanding of current trends in the investment market and how these trends may affect the strategies adopted by the fund.
                                       </p>
                                       <p style="font-family: Helvetica;" >
                                         Most funds established in tax-exempt jurisdictions (like the Cayman Islands or the British Virgin Islands) using a master-feeder structure are intended to protect offshore investors, but this is not the case for real estate funds. The primary way to reduce tax risk for offshore investors is through the use of more complex structures known as leveraged domestic blockers.
                                       </p>
                                       <h5 style="font-family: Helvetica;">
                                         <b>
                                            What is a leverage blocker?
                                         </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                          A leveraged domestic blocker is typically incorporated as a Delaware Corporation and capitalized with a mix of stocks and loans. The purpose of this facility is to protect offshore investors from the obligation to file US tax returns imposed by FIRPTA. The mechanism is complicated, but it is worth considering because you can use interest deductions. The protection offered by a blocker will vary depending on the investment and the particular investor, but if properly structured, it may prevent offshore investors from becoming subject to FIRPTA.
                                       </p>
                                       <h5 style="font-family: Helvetica;">
                                         <b>
                                            What is a "parallel fund structure"?
                                         </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                         A parallel fund structure, also known as a side-by-side structure, consists of an offshore fund and a domestic fund that run in parallel, each trading and investing under the same investment manager. Maintain a separate asset portfolio.
                                       </p>
                                       <h5 style="font-family: Helvetica;">
                                         <b>
                                            Offshore Jurisdiction
                                         </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                          Most offshore funds established by US investors are located in the Cayman Islands or the British Virgin Islands.
                                       </p>
                                       <h5 style="font-family: Helvetica;">
                                         <b>
                                            Cayman Islands:
                                         </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                          The Cayman Islands have long been a top choice for offshore funds due to its business-friendly structure. Known as the world leader in offshore investment funds, the Cayman Islands have a stable government and well-developed investment laws.
                                       </p>
                                       <h5 style="font-family: Helvetica;">
                                         <b>
                                            British Virgin Islands (BVI):
                                         </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                          With a low-cost and convenient regulatory structure, BVI aims to create streamlined processes and strong legal certainty, making it the most flexible jurisdiction. The BVI also offers lower application fees than the Cayman Islands.
                                       </p>
                                       <h5 style="font-family: Helvetica;">
                                         <b>
                                            Five types of Funds
                                         </b>
                                       </h5>
                                       <p style="font-family: Helvetica;" >
                                          When setting up a private equity real estate fund, the sponsor should communicate where the fund will operate along the risk-reward continuum. Investors look to specific metrics such as stock multiples, yields, and projected income to determine which fund best suits their objectives.
                                          <ul>
                                            <li>
                                               <b>1. Core:</b>
                                               They typically offer a 6-7% internal return on equity (IRR) through minimal risk and reward. These funds typically hold quality assets in prime primary markets.
                                             </li>
                                            <li>
                                               <b>
                                                 2. Core Plus:
                                               </b>
                                               These funds offer investors 8–12% net equity IRR and moderate leverage to boost IRR.
                                            </li>
                                            <li>
                                              <b>
                                                3. Added value:
                                              </b>
                                               These funds may include operational efficiencies, releasing or redevelopment, and assets improved through redevelopment. They employ more modest leverage of up to 70%, with capital appreciation playing a key role in investors' total returns and a net equity IRR of 11–15%.
                                            </li>
                                            <li>
                                               <b>
                                                 4. Chance:
                                               </b>
                                               These high-risk, high-return funds involve the relocation and/or renovation of poorly managed or dilapidated properties. Markets and locations play a secondary role in returning opportunities, many of which occur at the end of the holding period. The Opportunity Fund offers investors a Net Equity IRR of over 15%.
                                            </li>
                                            <li>
                                              <b>
                                                5. Bad Debt/Mezzanine:
                                              </b>
                                              These funds use leverage to boost their equity IRR and have no hesitation in taking on delinquent loans. Sponsors typically purchase senior loans or originate mezzanine loans. Distressed debt funds typically offer investors a net equity IRR of 8–12%.
                                            </li>
                                          </ul>
                                       </p>
                                </div>

How To Start A SAAS

Chapter-1

Chapter-2

Chapter-3

Chapter-4

Chapter-5

Chapter-6

Chapter-7

Chapter-8

Chapter-1

Chapter-2

Chapter-3

Chapter-4

Chapter-5

Dan Lesniak

Cody Davis

Samuel Zell