Real Estate Crowdfunding Investor Answers
Have questions about Premier Crowdfunding, our projects and our processes? You’ve come to the right place. Below are answers to some of the common questions we get from potential real estate crowdfunding investors.
What is Premier Crowdfunding?
Premier Crowdfunding is a website where you can browse real estate investment opportunities.
Is this like Kickstarter?
No. In Kickstarter, you make donations to businesses and get nothing in return other than “rewards.” On our platform you are making real investments.
What kind of Crowdfunding is this?
This is Title II Crowdfunding, for offerings under SEC Rule 506(c), where only accredited investors may invest.
Aren’t there other kinds of Crowdfunding as well?
Yes. The JOBS Act of 2012 created three kinds of offerings, all of which are sometimes referred to as Crowdfunding. The other two are:
- Offerings under SEC Regulation A, often referred to as “Title IV Crowdfunding” or “Regulation A+.”
- Offerings under section 4(a)(6) of the Securities Act of 1933, often referred to as “Title III Crowdfunding” or “Regulation Crowdfunding” or “Regulation CF.”
Do you plan to offer those in the future?
We are constantly evaluating new offerings…
So you’re saying that for now, only accredited investors may participate in the opportunities on your site?
What is an accredited investor?
In general, a person is an “accredited investor” who (i) earns at least $200,000 per year, or $300,000 per year with their spouse; or (ii) has a net worth of at least $1 million, excluding their principal residence. For the SEC’s full definition, please visit http://www.sec.gov/answers/accred.htm.
What if I’m not an accredited investor?
You can still sign up and see projects, you just can’t invest yet.
How do I get started?
To get started, register and create a password. Then you can start seeing and using all the benefits of the site.
Are there fees to join?
No, it’s absolutely free.
Is the information I give you secure?
Yes. We use SSL (Secure Sockets Layer) for security by making an encrypted link between your browser and our associated servers. SSL is an industry standard for protecting the integrity of online transactions.
What kinds of projects will I see on your site?
Quality commercial Real Estate opportunities throughout the U.S.
How do you select projects?
We select projects based on various factors, depending on market conditions.
Why should I consider an investment in real estate?
Allocating some portion of your portfolio to a direct investment in institutional quality real estate could provide you with a reasonably predictable and stable level of current income from the investment; the opportunity for capital appreciation; and diversification of your portfolio, by investing in an asset class that historically has out-performed the stock market. But we are not investment advisers and do not offer investment advice.
How much should I invest?
That’s up to you and your investment advisers. As a general matter, most people recommend a balanced portfolio that includes both low-risk and high-risk investments, with the right mix based on lots of factors including your age and your own tolerance for market fluctuations. As you consider how much to invest, you should definitely think of most of the projects on our site as high-risk investments.
Are there minimum investments?
We will stipulate a minimum investment in each project.
Are these risky investments?
Real estate is a very risky investment and a financial equity loss is possible. However, history proves that risky investments often bear the highest returns. Before investing, determine what your own risk tolerance is.
If I invest in a project, do I become personally liable for anything?
No, you are only personally liable only to make your investment. We choose our legal structures to protect investors from personal liability.
Describe the investment process.
First, review our active projects. When you decide to invest, click “I’m Ready to Invest” and we will guide you through the process. We’ll have you review important information about the project, we’ll ask you to sign our Investment Agreement, and then – and only then – we’ll ask you to pay for your investment.
Where does my money go when I invest?
Your money is held safely in an escrow account (which we don’t control) until the project is fully subscribed, i.e., until the full amount is invested. Then, it is distributed to the sponsor of the project. If the project is not fully subscribed, your money will be returned to you without any deduction.
Will I own actual real estate if I invest?
You won’t own real estate directly in your own name, the way you own your home. Instead, you’ll own an indirect interest in real estate. Often, you will own an interest in a limited liability company that itself owns real estate. In other cases, you will own a promissory note that is backed by real estate. We’ll describe exactly what you own in the information we provide for each project.
What will I receive for my investment?
That will vary from project to project. In some projects you would expect to receive a regular flow of income, while in others you would expect your interest to appreciate over time. We’ll describe the investment goals of each project as clearly as we can.
The real estate market crashed in 2007-8. Could that happen again?
Yes! Real estate can be a volatile investment and you should be prepared for ups and downs.
How should I choose among the projects on the site?
We might provide some general educational material. At this point, however, we’re not allowed to provide investment advice. If you’re not sure, you should consult with your own financial and investment advisors.
How do I pay for my investment?
Usually by a transfer straight from your bank account. There are no fees to you.
Can I invest through my IRA?
Usually, yes. For tax reasons we have to cap how much IRA money any one project can accept.
How are the returns estimated for each project?
We review all materials available on the project and use standard industry metrics to estimate returns. You have to keep in mind that these are only estimates. It is very, very hard to predict what is going to happen two, five, seven years in the future. For any given project, our estimate is likely to be inaccurate either up or down.
Will I be able to sell my shares?
Generally speaking, no. However, we will put forth reasonable effort to other investors first within the property ownership and then to other investors signed with Premier Crowdfunding, LLC. A fee of 5% will be charged if successful in finding a buyer.
Where can I learn more about the projects?
When you click on a project, you’ll see a lot of information right away. For more information, after you click on the project click on Investor Information. There’s you’ll see even more in-depth information about the project and the investment.
Does the government review these investments?
No. No Federal or State agency reviews these investments. You and your advisers have to make the decision whether to invest.
Can I invest in pools of real estate assets, rather than one at a time?
Some of our offerings will involve individual properties, while others will involve multiple properties.
Can I track the performance of my investments?
Yes, we give you a tool – we call it our Dashboard – to keep track of all the investments you make at our site.