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Frequently Asked Questions

What are your projected returns and how do you calculate them?
We are projecting an equity multiple of 2.00-2.85, on this specific project, which includes an 8% annual preferred return and profits at the time of sale. By way of example, $100,000 invested projects to a return of $200,000-$285,000. Keep in mind, that these are not guaranteed, but merely our best effort assumptions relating to occupancy rates and rental rates. Please review the PPM for important disclaimers and disclosures relating to any forward-looking projections.
When will the original investment be returned and how long will the holding period be?
Through our annual projected distributions of 8%, you would be receiving a piece of your original investment along the way as we work toward selling these cabins. However, the big payout (which will include the remainder of your original investment in addition to your profits) will be when we sell the cabins. Depending on market conditions, we plan to sell these cabins in 5-7 years.
How will I as an investor stay in touch with you and vice versa?
We will be sending out monthly statements to all of our investors once we begin the operations of marketing and managing these cabins as vacation rentals. Additionally, you can call or email any of our team members with any questions at any time, and we will be happy to help in any way that we can.
What is the tax impact?
We are not tax professionals and do not purport to provide tax advice or recommendations to our investors. We recommend you check with your own personal tax professional. From our personal experience, however, real estate syndications can provide numerous tax benefits. As an investor, all the tax benefits will be captured by the LLC and will flow through to you, proportionally, via an annual K-1 statement provided to you each March. This K-1 statement will capture your portion of the investment’s deductions for property taxes, loan interest and depreciation, and we intend to use cost segregation to maximize depreciation. We expect a $100k investment to generate an 8% preferred return in the form of capital returned while also generating a paper loss on your annual K-1.
What is the minimum investment required?
We require a minimum investment of $50,000.
How often will I receive distributions as an investor?
Investor distributions will be paid quarterly.
How would the fund handle a situation where an investor has a personal issue come up and needs their investment capital back before the cabins are sold?
You will receive “restricted” securities, meaning you will need to hold onto the investment for a minimum 1 year holding period, per SEC regulations. Following the 1-year hold period, you are free to go out and look for someone to purchase the investment from you at whatever negotiated price the parties want. We may also be able to connect you with other buyers. However, the intent of this investment is that not only is the investment illiquid, but there are no provisions for early withdrawal.
What if the economy faces a downturn during the anticipated sellout time?
While we would like to sell these cabins for a nice profit in 5-7 years, we may sell them sooner or even hold and manage them longer until we are sure we can earn the right returns for our investors.
How do I know if I am an accredited investor?

Accredited investors, as per the SEC, are individuals who either (a) have earned $200,000 on an annual basis or $300,000 as a married couple for the past 2 years, with a reasonable expectation of earning at least those amounts in the current year, or (b) have a net worth of at least $1,000,000 that does not include his/her primary residence. You must be able to verify to our satisfaction, your accreditation status. For more information, visit https://www.sec.gov/news/press-release/2020-191

How safe is an investment like this?
While all investments carry a certain level of risk, the two sponsors of the Fund have agreed to sign personal guarantees on the bank loans that are providing 60% of the financing for the cabins.
Why is there a 20% management fee? That seems expensive?
Vacation rental properties typically have higher management costs than long-term rental residential properties. This is because vacation guests are frequently coming and going and expect a much higher level of service than a typical long-term rental tenant. Other property management companies in the area are currently charging property owners management fees of up to 30-40%. Accordingly, 20% is a solid discount that still allows the sponsors to provide the resources necessary to properly manage the cabins.
How much experience do you have in this area?

Steve Trent, our CEO and one of our sponsors, along with his wife Carol have owned and operated several real estate investment LLC’s since 2010. Steve’s real estate businesses have involved single-family residential properties, apartments and vacation rentals. Steve has bought and resold over 300 doors and currently owns over 150 doors. Steve’s vacation rentals are located in the Myrtle Beach market and in the Smokies.

 

Additionally, our Chief Operating Officer, Andrew Trent, has vacation rental management experience in both the Myrtle Beach and GSP markets and will be leading our property management efforts for the Fund.

When will I start receiving distributions after I invest?
Should you choose to invest in our Fund, you will be eligible to receive your first distribution 9 months after you fund your investment. Thereafter, you will be eligible for distribution payments on a quarterly basis. This policy is in place to make sure that those who invest early are not at a disadvantage when distributions are made.
Will I be responsible for any capital calls?
No.
Am I responsible for any guarantees, or debt in the event the investment fails?
No.
Can I use funds from my IRA to invest?
Yes, you can invest in the Fund using IRA funds.
How much in taxes will I pay on the quarterly distributions and on the exit sale?
The answer here depends upon your personal financial situation. However, we do believe that paper losses from depreciation will make this a very tax-favored investment. As with any investment, you should consult your CPA for tax advice.
Why invest in the vacation niche? It seems that during these tougher times fewer people will take advantage of luxury items and trips?
While vacation travel has slowed down in many areas, the areas most impacted are vacation destinations that are deemed as offering a “luxury” experience in that they require air travel or activities that require a lack of social distancing. The struggles in these kinds of vacation markets actually benefit drive-to vacation markets like Gatlinburg / Sevierville / Pigeon Forge, as two-thirds of the nation’s population lives within a one-day drive of this area. Also, during an economic downturn, some travelers who would normally travel to a “luxury” destination will be more likely to travel to a drive-to vacation market like GSP. Additionally, our business model offers travelers the experience of renting an entire cabin with its own private pool, so they can travel with their friends and family and still practice social distancing should they choose to do so.
Are you refurbishing the properties?
These cabins will be new-constructions, so each of the cabins and all of their contents will be brand new.
How do you know the new properties will rent well?
The real estate market in the area is extremely vibrant. Market research and our experience reveals that there is high demand for cabins (both to rent and to own). Given the pricing that we are getting on the construction costs of these cabins, we have even more room than most investors to expand our profit margin on our rental numbers.
What is different about this real estate fund investment from other funds that I could invest in?
This Fund is unique in that it offers investors the opportunity to invest in the Gatlinburg / Sevierville / Pigeon Forge market at a time when it is rated the #1 short-term rental market in the country while also being on the cutting edge of the pool cabin theme that is rapidly becoming a new niche within the cabin rental market.
Do the sponsors or general partners receive any administration fees or other fees from capital raised or set up, etc.?
Yes. The sponsors receive an annual fee equaling 1% of the value of assets under management in addition to their management fee and their portion of the 70/30 profit split upon liquidation.

Disclaimers

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Accredited Investors only (506C)

iconAll offers and sales of any securities will be made only to Accredited Investors, which for natural persons, are investors who meet certain minimum annual income or net worth thresholds or hold certain SEC approved certifications. Any securities that are offered, are offered in reliance on certain exemptions from the registration requirements of the Securities Act of 1933 (primarily Rule 506C of Regulation D and/or Section 4(a)(2) of the Act) and are not required to comply with specific disclosure requirements that apply to registrations under the Act.

iconThe SEC has not passed upon the merits of, or given its approval to any securities offered by Star Chase, the terms of the offering, or the accuracy of completeness of any offering materials. Any securities that are offered by Star Chase Acquisition Fund are subject to legal restrictions on transfer and resale and investors should not assume they will be able to resell any securities offered by Star Chase Acquisition Fund.

iconInvesting in securities involves risk, and investors should be able to bear the loss of their investment. Any securities offered by Star Chase Acquisition Fund are not subject to the protections of the Investment Company Act.

iconAny performance data shared by Star Chase Acquisition Fund represents past performance and past performance does not guarantee future results. Neither Star Chase Acquisition Fund nor any of its funds are required by law to follow any standard methodology when calculating and representing performance date and the performance of any such funds may not be directly comparable to the performance of other private or registered funds.

iconGeneral Disclaimer

This Business Plan is for informational purposes and not intended to be a general solicitation or a securities offering of any kind. The information contained herein is from sources believed to be reliable, however no representation by Sponsor(s), either expressed or implied, is made as to the accuracy of any information on this property and all investors should conduct their own research to determine the accuracy of any statements made. An investment in this offering will be a speculative investment and subject to significant risks and therefore investors are encouraged to consult with their personal legal and tax advisors. Neither the Sponsor(s), nor their representatives, officers, employees, affiliates, sub-contractor or vendors provide tax, legal or investment advice. Nothing in this document is intended to be or should be construed as such advice.

 

The SEC has not passed upon the merits of or given its approval to the securities, the terms of the offering, or the accuracy or completeness of any offering materials. However, prior to making any decision to contribute capital, all investors must review and execute the Private Placement Memorandum and related offering documents. The securities are subject to legal restrictions on transfer and resale and investors should not assume they will be able to resell their securities.

 

Potential investors and other readers are also cautioned that these forward-looking statements are predictions only based on current information, assumptions and expectations that are inherently subject to risks and uncertainties that could cause future events or results to differ materially from those set forth or implied by such forward looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, such as “may,” “will,” “seek,” “should,” “expect,” “anticipate,” “project, “estimate,” “intend,” “continue,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. These forward-looking statements are only made as of the date of this executive summary and Sponsors undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

iconFinancial Disclaimer

This Business Plan further contains several future financial projections and forecasts. These estimated projections are based on numerous assumptions and hypothetical scenarios and Sponsor(s) explicitly makes no representation or warranty of any kind with respect to any financial projection or forecast delivered in connection with the Offering or any of the assumptions underlying them.

 

This Business plan further contains performance data that represents past performances. Past performance does not guarantee future results. Current performance may be lower or higher than the performance data presented.

 

All return examples provided are based on assumptions and expectations in light of currently available information, industry trends and comparisons to competitor’s financials. Therefore, actual performance may, and most likely will, substantially differ from these projections and no guarantee is presented or implied as to the accuracy of specific forecasts, projections or predictive statements contained in this Business Plan. The Sponsor further makes no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown in the pro-formas or other financial projections.

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