Frequently Asked Questions

Why invest with Sapient?

Most crowd funding portals do not serve as Managing Members/General Partners of the real estate investment project entities being offered on their sites. They simply advertise and market the real estate offerings of other Sponsors like SPG. 


Whereas the Managing Members of SPG are actually the developers of each project and have the responsibility of providing quarterly reports, serving as the tax partner and achieving the financial performance for their investors. Further, the Managing Members of Sapient’s offerings typically have “skin in the game” on every project being offered on the SCPS portal. The Executive Team of SPG has over 100 years of extensive successful experience in almost every aspect of syndication, development and operational management spanning almost every real estate asset class. SPG’s projects are designed to create potential cash flow (mailbox money), appreciation, tax shelter, portfolio diversification and tax shelter. SPG performs extensive research and due-diligence on every potential project under consideration and only targets properties which have the potential to provide investors with a minimum targeted IRR of 20% (on leveraged projects) or 15% IRR on non-leveraged (“all cash – no debt). 


SPG puts its investors first. We typically have a structure which provides a preference return to the investor and is such that the investor receives its preference return and its original capital back prior to any sharing of profits by the sponsor takes place. 


Our primary objective is the elimination of risk and preservation of capital which is why we have made the decision to avoid debt wherever possible in our projects. 


SPG’s projects will utilize the EcoShield Building System (EBS) which provides a superior structure with provides its tenants with substantially lower utility costs than that experienced by competitive projects. EBS also provides superior sound proofing such that our tenants will not hear noise pollution from neighboring apartments or outside noise. This system also means that our projects can be built at a lower cost. Additionally, building with EBS will enable us to cut the construction time in half which means that our investors will start receiving cash flow much faster than if we had used conventional construction methods. SPG owns the exclusive license in Texas for this building method which means that no other competitive property will have these advantages which gives SPG’s properties a marketing advantage over the competition


SPG exclusively target projects located in the growth areas of Texas with a heavy focus on the thriving and rapidly growing areas such as Dallas/Fort Worth and SMSA. 



Why structure development projects on a non-leveraged basis (all cash with zero debt) when leveraged properties (utilizing debt) can produce higher rates of return?

Given the current interest rate market SPG is currently structuring its new ground up development projects on an all-cash basis with no financing because time and debt provide the greatest risk to a development project . Aspects such as city and county approvals, supply chain restraints and the weather are elements which are beyond the control of the developer and are therefore hard to predict or budget for. When you have construction financing on development projects these delays, caused by these unpredictable elements, translate into higher development costs due to the increased debt service amounts. And, with the recent increase in interest rates, debt can end up being the difference between a highly profitable project and a marginally profitable project. Or, worse, a failed project. Thus Debt translates into Higher Risk. Sapient targets new development projects which have the potential to provide its investors with a 15% plus IRR (on an all-cash basis with zero debt). And, when you remove the greatest risk (Debt) to a real estate project a 15% IRR is a very good rate of return.  

What is the Risks associated with Debt?

With new development projects there are certain factors which are beyond the control of the developer (as mentioned in the previous section). These factors can dramatically increase the timeline for construction which in turn increases the amount of debt service on the project. Additionally, rising interest rates tend to cause lenders to loan a lower percentage of the properties value when permanent financing is arranged to refinance out of the construction loan. This may cause the developer to come up with additional capital in the form of equity in order to refinance out of the construction loan into permanent financing. 


With existing projects, permanent financing typically has a term date of ten years or less. So, in periods of rising interest rates, such as what we are currently experiencing, when the due date arrives the loan must either be paid off or refinanced. That is usually accomplished by selling the property or re-financing it. Refinancing may be problematic during periods of rising interest rates as lenders tend to reduce the Loan To Value (LTV) or percentage of the property value on which they will lend. In some cases, this may mean that the owners/borrowers may have to contribute more equity to qualify for a loan. The office building market is a good example of this. COVID made it necessary for employees to work from home and therefore office building occupancies plummeted, reducing the Net Operating Income (NOI), thus dramatically reducing the property’s value. Even today, with the lower risk of COVID workers resist going back to the office so office building occupancy remains low. There is presently a valid concern that when the office building market’s debt becomes due we may see a dramatic rise in foreclosures as property owners are faced with either contributing more equity or being foreclosed by their lenders.   


The Sapient Property Group believes that its primary goal is the preservation of its investor capital and thus strives to eliminate risk wherever possible and therefore has trended toward funding its investment offerings on an all cash basis rather than with substantial debt as has been the typical historical method. 

Why invest in commercial real estate as opposed to stocks and bonds?

Historically, real estate and stocks have been the cornerstones of wealth creation. Certainly, balance and diversification are generally a good strategy. However, over the past several years the stock and bond markets have become less predictable. Investments in single home flips and rentals have seen competition from institutional investors making it more difficult for individual investors to find viable single family investment properties. Increases in construction costs and higher interest rates are having the effect of reducing the demand for single family homes, driving people toward rentals which in turn, is driving multi-family properties toward higher occupancy and higher rents which translates into higher investor returns on multi-family investments. Higher construction costs and supply constraints are also contributing to supply shortages in the housing industry. On the other hand, the Dallas area continues to experience a tremendous amount of in-migration from other areas of the country, therefore increasing the demand for housing. Higher interest rates have had the effect of driving potential home buyers into the rental market. As prices and interest rates rise on single family homes and people contend with higher food prices people are increasingly seeking housing in less expensive homes or seeking rentals as opposed to purchasing. Passive investment in the Multi-family property market typically provide consistent cash flow as well as appreciation and tax shelter and they have the advantage of being a good inflation hedge since people always need housing. Sapient’s projects typically provide much higher rates of return that the stock or bond markets as all Sapient projects much have the potential to provide the investor with a 15% (non-leveraged) to 20% IRR (leveraged). 

What services does Sapient Provide?

Project capitalization, financing, organization and development, extensive due diligence on each project, feasibility analysis, rent comp surveys, market analysis, competitive bidding, operational management supervision, construction supervision, development design, quarterly operational and financial reporting, investor liaison and it functions as the tax partner.


Why Invest in the Dallas/Fort Worth and greater SMSA? 

The Dallas area is one of the most recognizable and fastest growing metropolitan areas in the U.S. — if not the world — and is considered a quasi-gateway city for investors looking for dependable, liquid real estate environments. Fortunately, despite its popularity and skyrocketing growth, Dallas is still an accessible market with lots of upside. We looked closely at the following related data to get a clearer picture of what makes this North Texas metropolis such a shining star: 


Population growth

Following a decade of proliferating population growth, Dallas-Fort Worth is expected in this decade to once again lead the nation’s metro areas for the number of new residents. The population of the DFW area is now the 4th largest metro area in the country, up from 6th place in 2010. In fact, DFW was only one of three metros to gain at least 1.2 million residents since 2010, along with Houston and NYC. Key Population Stats: • Dallas is home to over 1.3 million people in the city and more than 7.6 million residents in the metropolitan area. • Over the past 10 years the population of the City of Dallas grew by about 9%, according to the most recent census. • Dallas is the 3rd largest city in Texas and the 4th largest metropolitan area in the country. • Major counties in the Dallas metro area include Dallas, Collin, Denton, Kaufman, and Rockwall counties. • Suburbs around Dallas, including Collin and Denton counties and have seen their populations grow by more than 36% since 2010. • DFW could see the biggest population surge in the country this decade, with the population projected to grow by nearly 18% by 2029. • Per capita income in Dallas is $36,274 and median household income is $72,265. 


Job market

While many other parts of the country are still struggling to recover, Dallas is still a job hub. In fact, DFW is the nations #1 job market thanks to solid employment gains and in-migration. As The Dallas Morning News reports, Dallas scores high in top leading labor indicators such as net migration, college degree holders, job gains and growth. Key Employment Stats: • GDP of the Dallas-Fort Worth-Arlington, TX MSA is nearly $535 billion, according to the Federal Reserve Bank of St. Louis, and has grown by more than 57% over the last 10 years. • Employment growth in Dallas-Fort Worth is 5.6% year-over-year, according to the BLS, with the metro area home to nearly 3.9 million employees. • Median household incomes in Dallas grew by over 4% year-over-year while median property values increased by more than 6% in the past 12 months. • Unemployment rate in Dallas is currently 3.9% (as of Nov. 2021) with the manufacturing, trade and transportation, professional and business services, and leisure and hospitality sectors showing the fastest signs of new growth (BLS). • Target industry sectors in Dallas include building design and construction, company headquarters and operations, food manufacturing, IT services, logistics, and telecommunications. • Baylor Scott & White Health, Texas Health Resources, Lockheed Martin, University of Texas Southwestern Medical Center, and Medical City Healthcare are the top five employers in Dallas. • Major colleges and universities in the Dallas metropolitan area include University of Texas at Arlington, University of Texas at Dallas, University of North Texas, and Southern Methodist University. • Nearly 87% of the residents of Dallas are high school graduates or higher, while over 36% hold a bachelor’s degree or an advanced degree. • Transportation infrastructure in Dallas includes four major interstate highways, two commercial airports, and several mass transit systems. • Dallas/Fort Worth International Airport (DFW) is the 2nd largest airport in the U.S. and is bigger than the island of Manhattan. 


Real estate market

Dallas is ranked by the National Association of Realtors (NAR) as one of the top 10 markets in a post-pandemic environment in 2021-2022. Looking at the recent housing statistics, it’s easy to understand why. According to the most recent report from the Texas Real Estate Research Center (Nov. 2021), single-family home prices increased by over 18% year-over-year, while months inventory declined from a 1.3 to 1.0 months supply. Key Market Stats: • Zillow Home Value Index (ZHVI) for Dallas is $290,564 through November 2021. • Home values in Dallas increased by 20.0% over the last year. • Over the last five years home values in Dallas increased by over 78%. • Median sales price of a single-family home in Dallas is $360,000 according to the most recent report from the Texas Real Estate Research Center (November 2021). • Single-family median sales prices in Dallas have increased by 18.1% year-over-year. • Days on market (median) is 62 days with single-family homes in Dallas selling nearly 14% faster than one year ago. • Active listings of single-family homes in Dallas have decreased by 26.06% year-over-year. • Of the 121 neighborhoods in Dallas, Preston Hollow is the most expensive with a median home listing price of $1.7 million, based on the most recent report from Realtor.com. • Most affordable neighborhood in Dallas is Pleasant Grove where the median listing price of a home is $195,000. 


Attractive renters’ market

Home prices are rising in most Dallas neighborhoods, creating one of the hottest home markets in North Texas. As the Dallas News recently reported, feverish demand from in-state buyers and remote real estate investors are continuing to push home prices up. High home prices in Dallas, along with increased interest rates, a growing population and thriving job market are three of the reasons why demand for rental property in Dallas should remain robust for the foreseeable future. Key Market Stats: • Median rent in Dallas is $2,360 per month for a 3-bedroom home, based on the most recent research from Zumper (December 2021). • Rents in Dallas have increased by 18% year-over-year. • Renter-occupied households in Dallas account for 44% of the total occupied housing units in the metropolitan area. 


Quality of life

Real estate prices in Dallas are still surprisingly affordable, the job market is robust, cost of living is low, and there’s an amazing culture scene. Add to this the fact that Texas has no state income or inheritance tax, and it’s easy to understand why so many people and businesses are moving to Dallas. Key quality of life stats: • Cost of living in Dallas is about 50% less than urban coastal cities like San Francisco and New York, according to NerdWallet’s cost of living calculator. • Forbes ranks Dallas as the 2nd best place for business and careers in the U.S. • Dallas is among the best places to live and retire in the country, based on the most recent research by U.S. News & World Report • Culture scene in Dallas includes the Downtown Art District, Dallas Symphony Orchestra, and the State Fair of Texas which started back in 1886. • Pro sports teams in Dallas include the Texas Rangers, Dallas Mavericks, NHL Dallas Stars, and the Dallas Cowboys – rumored to be the World’s Most Valuable Sports Team worth $5.5 billion. 


Fortune 500 companies located in the Dallas area

Whitacre Tower – AT&T’s corporate headquarters in Dallas
Headquarters of AMR Corporation, American Airlines, and American Eagle in Fort Worth
Southwest Airlines headquarters in Dallas
Comerica Bank Tower
The following are the Fortune 500 companies headquartered in the Dallas–Fort Worth metroplex:[3]
• 3 ExxonMobil (Irving)
• 7 McKesson (Irving)
• 9 AT&T (Dallas)
• 59 Energy Transfer Partners (Dallas)
• 68 American Airlines Group (Fort Worth)
• 128 CBRE Group (Dallas)
• 141 Southwest Airlines (Dallas)
• 181 Fluor Corporation (Irving)
• 189 AECOM (Dallas)
• 174 Tenet Healthcare (Dallas)
• 175 Kimberly-Clark (Irving)
• 222 Texas Instruments (Dallas)
• 184 HollyFrontier (Dallas)
• 183 DR Horton (Arlington)
• 206 Jacobs Engineering (Dallas)
• 251 Charles Schwab Corporation (Westlake)
• 341 Pioneer Natural Resources (Irving)
• 270 Vistra Energy (Irving)
• 464 GameStop (Grapevine)
• 425 Builders Firstsource (Dallas)
• 483 EnLink Midstream (Dallas)
• 426 Celanese (Irving)
• 491 Commercial Metals (Irving) 

Other notable companies based in the Dallas–Fort Worth area[edit]
• 7-Eleven (Irving)• Advent Concept (Irving)• Alon USA (Dallas) • Alcon (Fort Worth) • Assuras (Dallas) • At Home (Plano) • The Beck Group (Dallas) • Ben E. Keith Company (Fort Worth) • Beyond The Horizon (Dallas) • Black-eyed Pea (Arlington) • BNSF (Fort Worth) • Borden Milk Products (Dallas) • Boston Pizza Restaurants (Dallas) • Briggs Equipment (Dallas) • Brinker International (Dallas) • Capital One (Plano) • Cash America International (Fort Worth) • Chief Oil & Gas (Dallas) • Chili’s (Dallas) • Christus Health (Irving) • Cicis (Irving) • Cinemark (Plano) • Comerica (Dallas) • Continental Electronics (Dallas) • Copart (Dallas) • Corner Bakery Cafe (Dallas) • Chuck E. Cheese (Irving) • Crossmark (Plano) • Dave & Buster’s (Dallas) • Darling Ingredients (Irving) • Dickey’s Barbecue Pit (Dallas) • DXC Technology (Plano) • D-BAT (Addison) • Ericsson (Plano) • Essilor of America (Dallas) • Fairmount Food Group (Dallas) • FedEx Office (Plano) • FFE Transportation (Dallas) • Flowserve (Irving) • Fossil Group (Richardson) • Frito-Lay (Plano) • Funimation (Flower Mound) • Galderma (Fort Worth) • GAINSCO (Dallas) • Gamestop (Grapevine) • Gap Broadcasting Group (Dallas) • Gartner, Inc. (Irving) • GE Capital (Arlington) • GM Financial (Fort Worth) • Goldman Sachs (Dallas) • Greyhound Lines (Dallas) • Gutterth (Denton) • Haggar Clothing (Dallas) • Half Price Books (Dallas) • Hall of Fame Racing (Dallas) • Harwood International (Dallas) • HBK Investments (Dallas) • Hoak Media Corporation (Dallas) • id Software (Dallas) • InfoCom Corporation (Dallas) • Interstate Batteries (Dallas) • Intuit (Plano) • KidZania (USA headquarters) (Plano) • Knockouts (Irving) • Jamba Juice (Frisco) • JPMorgan Chase (Plano) • La Madeleine (Dallas) • La Quinta Inns & Suites (Irving) • Lennox International (Richardson) • Liberty Mutual Insurance (Plano) • Lockheed Martin (Fort Worth) • Mary Kay (Addison) • Match.com (Dallas) • Matrix Business Technologies (Dallas) • Merit Energy (Dallas) • Metro by T-Mobile (Richardson) • The Michaels Companies (Irving) • Microsoft (Irving) • Mohr Partners (Dallas) • MoneyGram (Dallas) • Monitronics (Farmers Branch) • MumboJumbo (Dallas) • NCH Corporation (Irving) • Neiman Marcus (Dallas) • NEC Corporation of America (Irving) • Nexstar Media Group (Irving) • Niagara Conservation Corporation (Fort Worth) • Nokia (North American Headquarters) (Dallas) • NTT Data (Plano) • The Odee Company (Dallas) • TPG Sixth Street Partners • PlainsCapital Corporation (Dallas) • Pizza Hut (Plano) • Pioneer Corporation (Fort Worth) • Primoris Services Corporation (Dallas) • Prodea Systems (Plano) • Red Mango (Dallas) • Reddy Ice (Dallas) • Rent-A-Center (Plano) • Rolex (Dallas) • Sabre Corporation (Southlake) • Salesforce (Dallas) • Sally Beauty Holdings (Denton) • Sammons Enterprises (Dallas) • ScrewAttack (Flower Mound) • Securonix (Addison) • Six Flags (Grand Prairie) • Skagen Denmark (Richardson) • Smoothie King (Dallas) • Solera Holdings (Westlake) • State Farm Insurance (Richardson) • TD Ameritrade (Westlake) • Think Finance (Dallas) • Titanium Metals (Dallas) • Topgolf (Dallas) • Torchmark Corporation (Headquarters) (McKinney) • Toyota Motor North America (Headquarters) (Plano) • Trinity Industries (Dallas) • Tuesday Morning (Dallas) • TIP TOP Services (Dallas) • Tyler Technologies (Headquarters) (Plano) • Uber Technologies (Dallas)[4] • United Surgical Partners International (Dallas) • Verizon (Irving) • Wingstop (Dallas) • XTO Energy (Fort Worth) • ZTE (USA headquarters) (Richardson) • HotelPlacer.Com (USA headquarters) (Dallas)  

Why invest in Multi-family (MF) ground-up development projects rather than existing value add MF projects?

Due to the high demand for quality existing projects, it has become a seller’s market with higher prices which have driven investor’s returns to unattractive levels. However, in this increasing interest rate environment there may be some opportunities to acquire properties from sellers who find themselves caught with the debt on their property coming due and the prospect of not being able to refinance without putting in more equity. And, that may present a buying opportunity. As Warren Buffett has said, pounce when others are fearful.  


However, new ground up development projects continue to offer the greatest potential for creating above average rates of return. As a result, investor returns in development properties are typically much higher than for existing properties. The SPG’s current offerings are in the most vibrant real estate segment, the multi-family market. Multi-family rents in the Dallas area consistently increase creating increases in revenue and value for multi-family projects. Occupancy rates in multi-family properties are consistently stable with low vacancy rates. SPG’s ground-up new development projects are targeted to provide its investors with a 20% IRR (on a leveraged basis) or 15% IRR on a non-leveraged basis (all cash – no debt). With ever increasing interest rates many potential home buyers are being priced out of the market and therefore relegated to the rental market. This fact alone makes investing in multi-family properties a wise option. Muli-Family properties have also historically been a very good inflation hedge. 


SPG’s current multi-family ground up developments are located in cities which have been growing rapidly, are in Opportunity Zones (which offer substantial tax benefits) and which are under served for multi-family housing.