Question 1

What exactly is SDAI’s current investment offering?

Accepted Answer

SDAI is currently offering investors participation in a carefully structured investment specifically focused on acquiring multifamily apartment properties within San Diego County. Initially, properties are acquired with all cash, strategically leveraging them later as market conditions improve. The fund targets properties with high appreciation potential, stable cash flow characteristics, and attractive initial purchase prices resulting from current temporary market conditions.

Question 2

Who can invest with SDAI, and what is the minimum investment?

Accepted Answer

Our current offering is available exclusively to accredited investors, as defined by SEC guidelines. Generally, SDAI’s minimum investment ranges from $50,000 to $250,000, depending upon specific fund terms and investor preference.

Question 3

What returns can investors reasonably expect from this investment?

Accepted Answer

While past performance cannot guarantee future results, SDAI has consistently delivered above-average returns historically. Our current investment is projected to produce an Average Annual Return of approximately 14.8% in a hold-through scenario and 29.4% in a refinance-and-trade-up scenario over an 8-year investment period. Initial cash-on-cash returns are expected to begin at approximately 4.75%, steadily rising to over 12% annually by Year 8. Investors are projected to realize substantial capital appreciation upon final asset disposition.

Question 4

How and when are investor returns distributed?

Accepted Answer

Investor returns are distributed regularly via quarterly cash flow distributions. Upon the sale of assets, investors receive their proportionate share of profits alongside their return of original invested capital.  During the capital formation period funds will be placed in a floating interest bearing SNSXX/SUTXX Schwab US Treasury Money Fund currently yielding approximately 4%.  Distributions from the SNSXX/SUTXX Schwab US Treasury Money Fund will be made prior to property acquisition.

Question 5

What fees does SDAI charge, and how are they structured?

Accepted Answer

SDAI is committed to transparency in its fee structure, which typically includes:
Asset Management Fees: Typically 2% of gross scheduled income annually, covering administrative costs, oversight, and investor reporting.
Property Management Fees: Typically 6% of gross rental income, covering direct property oversight, leasing, tenant relations, and routine maintenance management.
Performance-Based Compensation: SDAI utilize a preferred-return structure of 6% per year for capital investors ensuring investors receive specified returns before any performance-based compensation (carried interest) accrues to management.  
Organization and Overhead Fees: Typically 1-2% of capital raised to cover organizational startup expenses, legal, and marketing.
Acquisitions and Dispositions: 3.5% minimum commission fee on acquisitions and sales.
Detailed fee disclosures are always provided clearly to investors prior to investment.

Question 6

How does SDAI select and evaluate investment properties?

Accepted Answer

Our rigorous selection process involves detailed due diligence, comprehensive financial analysis, and thorough market research. Key evaluation criteria include:
Favorable acquisition price relative to market value
Clear opportunity for rent growth and expense control
Potential for significant appreciation post-renovation or repositioning
Robust local employment, demographic, and economic conditions
Detailed physical property inspections and environmental evaluations
Conservative risk management assessment and modeling

Question 7

What is the investment timeline and projected exit strategy?

Accepted Answer

SDAI targets a carefully planned 8-year investment horizon. Initially, properties are acquired in all-cash transactions to maximize buying power and negotiating strength. Strategic leveraging is applied when interest rates stabilize, amplifying investor returns. The final stage involves a carefully timed sale of properties at favorable market conditions, maximizing investor profits and delivering substantial capital appreciation.

Question 8

How does SDAI manage risks associated with this investment?

Accepted Answer

Risk management is a cornerstone of SDAI’s investment philosophy, and we mitigate risk through:
All-Cash Initial Acquisitions: Ensures initial investment stability and maximum negotiation power.
Conservative Leverage: When strategically applied, leverage is maintained at conservative levels to optimize risk-adjusted returns.
Diversification and Multiple Asset Acquisition: Spreading investments across multiple properties to mitigate single-property risk.
Comprehensive Due Diligence: Rigorous inspection, environmental assessment, financial modeling, and market analysis.
Proactive Property Management: Rigorous tenant screening, proactive property maintenance, and consistent occupancy optimization.

Question 9

What ongoing reporting and communication can investors expect?

Accepted Answer

SDAI believes strongly in investor transparency and proactive communication. Investors receive regular quarterly financial reports detailing:
Financial performance, cash flow, and distributions
Property operational highlights and key performance metrics
Market condition updates and strategic decisions made by management

Question 10

Does SDAI do “cash calls”?

Accepted Answer

We plan for and capitalize for all project improvements as well as a reserve.  Investors are not obligated to make any additional contributions beyond their initial investment.

Question 11

Are SDAI’s principals personally invested in the fund?

Accepted Answer

Yes. SDAI’s principals, Jeff Castellaw and Jim Stewart, personally invest their capital alongside investors in every project or fund. This alignment of interests ensures every investment decision prioritizes investor returns and underscores their confidence in the strategic value and potential profitability of each acquisition.

Question 12

How can I get started investing with SDAI?

Accepted Answer

Accredited investors interested in exploring this compelling investment opportunity should contact us directly. We offer personalized consultations, detailed investor presentations, and full access to our investor resources—including the 2025 report by London Moeder Advisors.

For further questions or to begin the investment process, please reach out through our investor relations contact provided on the next page.

Frequently Asked Questions