Frequently Asked Questions (FAQs)
Private real estate investments of the type selected by MinnowCfunding are not traded on a public market and involve transferability restrictions. By Regulation Crowdfunding, you are restricted from reselling your equity shares for the first year. Furthermore your shares in these investments cannot be easily traded, sold, or otherwise converted into cash. Each investment has a unique projected "hold period," which is the approximate period of time that investors can expect to hold the investment prior to any "exit" or maturity date. These hold periods vary by investment, and can vary from less than 6 months to greater than 5 years. They are estimates only, and actual hold periods may be longer or shorter than the periods initially projected. Expected hold periods are generally described in the investment offering document. Investors should review such expected hold periods carefully and consider whether such hold periods are suitable for them in view of their own investment objectives.
Yes. Investments in real estate are speculative and risky like investments in stock. The real estate market has economic cycles and it is difficult to know how and when the economy will change. You should be able to afford and be prepared to lose your entire investment. Although no investment is guaranteed, one benefit of investing with MinnowCfunding is that, as a passive equity investor, you hold an interest in a limited partnership or LLC entity. that invests in physical assets around the United States
The frequency of any investor returns depends on the type of investment. Typically the returns on real estate investments draw from cash flow and appreciation. An investor's share of any returns would be based on the equity ownership share of any distributions. There are not, of course, any guarantees with respect to any of the investment returns by the issuer listed on MinnowCfunding and there can be no assurance that actual return rates will meet those that were projected or even that investors will have all of their investment capital returned to them.
"Crowdfunding" generally refers to the use of the Internet by small businesses to raise capital through soliciting relatively small individual investments or contributions from a large number of investors. Over the last few years, crowdfunding websites in the US have proven a popular way by which to solicit charitable donations and to raise funds for artistic endeavors like films and social cause.
Under recently adopted rules by SEC known as Regulation Crowdfunding, the general public now have the opportunity to participate in the early capital raising activities of start-up and early stage enterprises and projects. Effective May 16.2016, eligible enterprises can use crwodfunding to offer and sell securities online to the general public.
Title III of the Jumpstart Our Business Startups Act (JOBS Act) established crowdfunding provisions that allow early-stage businesses to offer and sell securities. The SEC subsequently adopted Regulation Crowdfunding to implement the crowdfunding provisions of the JOBS Act. Broker-dealers and funding portals that are registered with the SEC and are FINRA members are permitted to offer and sell securities on behalf of issuers to the investing public using crowdfunding. By the RC rules, investors will be subject to investment limits and there will be an annual capital raise cap for the issuers as well. Accredited investors are also allowed to invest in crowdfunding as long as the investors meet the Accredited Investor definition per Rule 501(a) of Regulation D.
MinnowCfunding LLC ("Minnow') is a "funding portal" for crowdfunding as defined under Section 3(a)(80) of the Securities Exchange Act of 1934 (SEA), as revised by the JOBS Act, and Rule 300(c)(2) under Regulation Crowdfunding.
Minnow is a real estate crowdfunding online portal that assists small real estate entrepreneurs, developers and operators to raise capital through securities offerings to a pool of individual investors online. It is Minnow's objective to offer the investors the education and direct investment opportunities while offering a low-cost efficient channel to the issuers to raise the capital they need.
Minnow offers access to a wide variety of properties types located in major cities like Los Angeles, San Francisco, Seattle, New York, Chicago, and Miami, including multi-family, office, retail, hospitality, industrial and ground-up development. We are to connect investors who want to invest in real estate with the real estate companies who need real estate capital. MinnowCfunding has a team of professionals with experience in real estate, credit, finance, technology, and regulation. We are headquartered in Los Angeles, California, but you can reach us anytime 24/7 online through our website.
MinnowCfunding offers investors access to equity investment opportunities involving a variety of real estate property types, including multi-family residential, office, industrial, self-storage, retail, medical office and hospitality facilities. Single-family residences being used for investment purposes (not owner-occupied) are also the subject of many investment opportunities We will select real properties in or near a significant metropolitan area, but it all depends on the particular situation. Investors may have the opportunity to receive a share of the cash-flow from rents as well as a share of the proceeds when the property is eventually sold or refinanced. The hold period for an investment like this may range from 1-7 years.
MinnowCfunding first reviews prospective investment opportunities to ensure that they meet some threshold criteria for listings on our online platform. We’re looking for issuers with good integrity and a proven track record. Among other diligence inquiries, we will run background and credit checks on the principals of the issuer, and will perform a more thorough review of the project -- such as pro forma financials, title and inspection reports, comparable sales data, and other pertinent information -- and assembles such data on the platform so that investors can review the information directly. Once we are comfortable with the issuer and the project, we will proceed to make the project available to the investor on our platform. By applying strict underwriting discipline, MinnowCfunding estimates that only a relatively small percentage of all of the prospective projects that are brought to us will get listed for our investors to curate.
Once an investment is listed, the information will include not only the general information about the particular opportunity but also the legal documents that contain detailed "risk factors" which investors should review carefully before making any investment. Each investment has a target funding amount, although the ultimate aggregate investment made may be more or less than this amount depending on the success of the raise and the other capital commitments of the issuer.
MinnowCfunding provide access that was historically limited and pre-vet every investment on the portal. We will review the offering information presented by the Issuer and run background and credit checks on the principals of the issuer, and will perform a more thorough review of the project -- such as pro forma financials, title and inspection reports, comparable sales data, and other pertinent information -- and assembles such data on the platform so that investors can review the information directly.
Commercial real estate investing traditionally involves large investment amounts and limited regional opportunities. MinnowCfunding, on the other hand, allows investors to invest for as little as $3,000, all from the convenience of an investor's laptop or tablet computer. This means that investors have the ability to participate in opportunities that historically may have been available only to large institutions.
MinnowCfunding presents the relevant investment information in an easy-to-use format so that investors can make their own decisions about which opportunities they want to pursue. And our platform technology will make the process frictionless – allowing you to screen investments online, sign legal documents online, and have access to all your documents in one place on your investor account. Once an investment has been made, investors are be able to monitor the progress of an investment via the investor "account" -- again, all from the convenience of your laptop or mobile device. The account will contain earnings history, management updates, and other follow-on information to be reviewed.
You can begin the investment process by registering for the site to create your account. After registering you will gain access to the portfolio of our investment opportunities where you can read about each opportunity and decide which investment is right for you. You should also review the materials and information in the Education Center. Should you have any questions regarding to the offering, you can contact the Issuer through the communication channel provided on the portal which is accessible by you 24/7. Once you confirm that you have reviewed the education materials and affirm that you can bear the investment loss, then you can subscribe to the investment. Once the subscription is confirmed and the subscription agreement is executed, you will follow the wiring instruction to complete the transaction.
Because of the risks involved with securities-based crowdfunding, you are limited in how much you can invest during any 12-month period in these transactions. The limitation on how much you can invest depends on your net worth and annual income. Following are the inflation-adjusted investment limits.
• If either your annual income or net worth is less than $107,000, then during any 12-month period, you can invest up to the greater of $2,200 or 5% of the greater of your annual income or net worth.
• If both your annual income and net worth are equal to or more than $107,000, then during any 12-month period, you can invest up to 10% of the greater of your annual income or net worth, but not to exceed $107,000.
The following table provides a few examples:
Annual Income Networth Calculation 12-month Limit $30,000 $105,000 greater of $2,200 or 5% of $105,000 ($5,250) $5,250 $150,000 $80,000 greater of $2,200 or 5% of $150,000 ($7,500) $7,500 $150,000 $107,000 10% of $150,000 ($15,000) $15,000 $20,000 $900,000 10% of $900,000 ($90,000) $90,000 $1.2 million $2 million 10% of $2 million ($200,000), subject to cap $107,000
Joint calculation. You can calculate your annual income or net worth by jointly including your spouse’s income or assets. It is not necessary that property be held jointly. However, if you do calculate your income or assets jointly with your spouse, each of your crowdfunding.
For equity investments, The issuer sets up a separate limited partnership or limited liability company (LLC) for each investment opportunity, and that investor will hold an equity interest in the entity that actually owns the subject real estate. When you invest in an equity opportunity through MinnowCfunding, you own shares in that LLC as limited partner or passive investor. Using this structure, you should have the benefit of limited liability while also enjoying the benefits of using a "pass-through" entity for tax purposes. An LLC gives you liability protection, shielding your personal assets from the investment. This equity ownership structure you should have the benefit of limited liability while also enjoying the benefits of using a "pass-through" entity for tax purposes.
The timing of each investment varies widely depending on the type of property and the underlying investment strategy. Each investment has a unique projected "hold period," which is the approximate period of time that investors can expect to hold the investment prior to any "exit" or maturity date. These hold periods vary by investment, and can vary from less than 6 months to greater than 5 years; they are also estimates only, and actual hold periods may be longer or shorter than the periods initially projected.
No. We do not make any recommendations, solicit any offers to buy or sell any securities, or provide any investment advice You are solely responsible for conducting any legal, accounting or other due diligence review and should obtain investment and tax advice from your advisers before deciding to invest. MinnowCfunding does not make any recommendations, solicit any offers to buy or sell any securities, or provide any investment advice.
Investors will be able to view real time updates of their investments when they login to the site and view their investor account. This is the hub of information, and will provide comprehensive metrics about their investment balance to date and YTD return on investment. MinnowCfunding will work with the real estate sponsor to provide timely updates shared with all investors. Updates will be provided via email and via the investor dashboard.
Yes. MinnowCfunding has provided chat room and message center on its website for investor and issuer to share information and discussion relating to the offering. But all communication has to be conducted through the portal and all communication should be in a courteous and professional manner with no offensive or abusive language.
Yes. Regulation Crowdfunding portal is open to accredited investors if the investors meet the accredited investor definition in SEC Rule 501 (a) which qualifies any investor based on defined measures of professional knowledge, experience, or certification in addition to the existing test of income and net worth.