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Frequently Asked QuestionsPrepared exclusively for Maxian Capital Investors

What are the risks of investing?Although multi-family properties are often considered stable and safe among various investment asset classes,there is always a risk to any investment. In order to manage risk, we leverage established relationships withlocal brokers to obtain “off-market” and “below-market” deals.We partner with local, experienced property management companies that know the neighborhood markets weinvest in, so the property is operated as efficiently as possible by optimizing income and reducing expenses.There are no guarantees in investing. We [the sponsors] invest our own personal capital into the deals so wehave aligned interests and goals with the investors in the group.What kind of returns can I expect?Every multi-family property investment is different and there is never a guarantee on an amount of return oninvestment. However, we typically strive to achieve a double-digit annual return with no guarantees over thelife of the investment, which comes from cash-flow, forced appreciation from adding value, and the profits fromthe disposition of the property.In addition, we target a 12%-15% IRR (Internal Rate of Return) over the life of the investment. We invest ourown capital into these properties and seek every opportunity to maximize investor returns. We discuss thebusiness plan, projected returns, and equity structure with investors for each investment property.How often should distributions be expected?An investor can expect to receive quarterly to sometimes annual distributions depending on the specificbusiness plan for each investment property. M Downing & Co. may also distribute capital to investors at theend of the year depending on the performance of the properties and when properties are sold or refinanced.How long do I commit my money to this investment?Investors can typically expect to commit their capital to an 18 month to 3 year hold period before we employ anexit strategy, such as a refinance or sale. This time period varies based on the specific business plan beingexecuted for each property. Economic conditions may alter the strategy. Investors will receive projected timelines upon acquisition of theproperty and throughout the life of the investment. We [the sponsors] will always attempt to remain consistentwith the initial projection and will execute the strategy that results in the greatest returns for all investors.Can I invest through my IRA, LLC, LP, or Trust?Yes. Investors are able to invest through their traditional self-directed IRAs. Investors are also able to investthrough their LLC, LP, or Trust. Please contact Max Downing if you have questions about how this works orneed help selecting a custodian.What is the minimum investment?$50,000 is the minimum to invest in a project depending on the investment property. Learn how to invest usingyour current IRA/401K money now without penalty from a third-party self-directed custodian company.Please contact M. Downing & Co. for more details.

Can I get my money out at any time?No. Commercial real estate investments are longer-term in nature than traditional liquid stocks and bonds.Investors would receive a projected hold period timeline from the beginning of the investment and consistentlythroughout the life of the project.Cash distributions are made through cash flow from the property during the holding period of the asset, andmany times investors may not receive their full principal investment back until the property sells and investorscash out from the profits upon disposition. M Downing & Co. makes no guarantees of investor returns.We understand there are unforeseen events in everyone’s life and you may need your money well before theend of the holding period. The three ways you could cash out from the investment in this scenario are:1. We sell the asset.2. M Downing & Co. buys you out.3. Another partner in the deal buys you out. If the company doesn’t have the cash to buy you out, we willcontact all partners involved in the investment for bidding.How long are the holding periods?Typically 5-7 years unless we feel the market conditions are right to sell at the highest price and greatest time.Am I an active property owner?Yes, unlike a REIT or other passive investment, you are an active owner and realize all of the benefits of runninga portfolio of apartment communities without spending your time finding, buying and managing the asset.These benefits include steady income, tax savings, appreciation, principal reduction, depreciation, interest writeoff, etc. What are the requirements?You must qualify as an “accredited” or “sophisticated” investor. These designations are to ensure that investorspossess a certain level of financial and investing competence. 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).On the income test, the person must satisfy the thresholds for the three years consistently either alone or witha spouse, and cannot, for example, satisfy one year based on individual income and the next two years based onjoint income with a spouse.The only exception is if a person is married within this period, in which case the person may satisfy thethreshold on the basis of joint income for the years during which the person was married and on the basis ofindividual income for the other years.

In addition, entities such as banks, partnerships, corporations, nonprofits, and trusts may be accreditedinvestors. Of the entities that would be considered accredited investors and depending on your circumstances,the following may be relevant to you:❏ any trust, with total assets in excess of $5 million, not formed to specifically purchase the subjectsecurities, whose purchase is directed by a sophisticated person, or❏ any entity in which all of the equity owners are accredited investors.In this context, a sophisticated person means the person must have, or the company or private fund offering thesecurities reasonably believes that this person has sufficient knowledge and experience in financial andbusiness matters to evaluate the merits and risks of the prospective investment.Source: www.investor.govHere’s How Easy It is to Get StartedStep 1: Subscribe to our private mailing list below and you will be notified when we identify an opportunity.Step 2: Contact mdowningco@gmail.com or call Max Downing at 716.425.6693 to receive our easilyaccessible investor documents to formalize your investment in a deal:a. Private Placement Memorandumb. Operating Agreementc. Subscription Agreementd. Accredited Investor Qualifier Forme. ACH Application [CBP form 400]Step 4: Submit applications. Step 5:   Is that all I have to do? Yep! You will receive live updates upon acquisition of the property andthroughout the life of the investment. Then, watch your profits snowball from income, appreciation, equitybuildup, and tax savings!Feel free to contact Max Downing with any questions at mdowningco@gmail.com or 716.425.6693.

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