What are the requirements?
Requirments for Investing with Rise48 Equity
You must qualify as an “accredited” or a “non-accredited” investor. These designations are to ensure that investors possess a certain level of financial and investing competence.
Non-accredited
In this context, a “non-accredited” or sophisticated person means the person, 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.
Accredited
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. You 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 this 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.
What is the minimum investment?
Minimum Investment
$50,000 is the minimum amount to invest in a project. Learn how to invest using your current IRA/401K money without penalty from a third-party self-directed custodian company. Please contact Rise48 Equity for more details.
Can I invest through my IRA, LLC, LP, or Trust?
IRA, LLC,LP, and 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 Rise48 Equity if you have questions about how this works or need help selecting a custodian.
What are the risks of investing?
RiskS of Investing
Although multi-family properties are often considered stable and safe among various investment asset classes, there is always 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.
How long do I commit my money to this investment?
Length of Investment
Investors can typically expect to commit their capital to an 18 month to 5 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.
What kind of returns can I expect?
Returns on Investment
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. This 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?
Distribution Expectations
An investor can expect to receive monthly distributions depending on the specific business plan for each investment property. Rise48 Equity may also distribute additional capital to investors from time to time. This depends on the performance of the properties and when properties are sold or refinanced.
Can I cash out of my investment at any time?
Cash Out of investment?
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 done through cash flow from the property during the holding period of the asset. Many times investors may not receive their full principal investment back until the property sells and investors cash out from the profits upon disposition. Rise48 Equity makes no guarantees of investor returns.
Do we accept 1031 exchanges?
Do we accept 1031 exchanges into our deals?
Yes, Rise48 Equity accepts 1031 exchanges. Please contact our team at connect@rise48equity.com, and we will guide you through the process and assist in executing the 1031 exchange. For further details, please review our 1031 exchange guide.
