Frequently Asked Questions About Our Management Services
The minimum investment is $50,000 for Class A shares.
The minimum investment is $100,000 for Class B shares.
We do not officially call capital until we have suitable properties/operators identified. We do this to avoid cash drag. To get on our email list and be notified about funding announcements, you can contact us here.
The fund will close once $5,000,000 is raised or on August 1, 2023, whichever comes first.
TALK TO JILLIAN ABOUT THIS SECTION.
Certainty REI is structured as an LLC. As an investor, you will own a membership interest in Certainty REI Fund. Through this structure, investors have direct ownership of the individual properties in the fund, giving you access to tax benefits. For full details on this structure, please register and read through the PPMs and Operating Agreements.
Generally, no. However, interest can be transferred by gift or inheritance, usually to family members, by will, or other official documents. Because there is not an open market for this investment, it is an illiquid asset. Please see the Operating Agreements for more details. It is important to get to know us and what you’re investing in before investing.
An investment in the funds should be considered long-term in nature. Investors should be in a financial position that will enable an investor to hold their investment for the duration of the fund, which is projected for 5 to 7 years.
Multifamily development and/or acquisition of existing value-added properties or storage units.
You can invest with cash and through trusts, LLC, and LP. In addition, you can invest through eQRPs, self-directed IRAs, and self-directed 401(k)s.
Similar to a 1099, a K-1 form is an accounting of the tax income for the year. Each Certainty REI investor receives one per investment each year, regardless of how many properties are in each fund. K-1 forms are most commonly used in partnerships and in real estate ownership.
A REIT (Real Estate Investment Trust) is basically real estate-flavored stock and is often highly correlated to the performance of the stock market. As direct fractional investors, Certainty REI clients are protected from that volatility.
Additionally, direct fractional ownership provides investors access to all of the tax advantages that are often unavailable to REIT Investors. REITs typically make the majority of their fees through transactions.
Yes, you can, while the fund is open. Please check with our team about this if you have additional questions.
On a quarterly basis, Certainty REI intends to furnish investors with a Fund update, which reports various activities and operations of the fund. It is not uncommon for Certainty REI to send shorter updates via email between quarters when there is relevant information and/or data to share.
Our investments are open to approved, accredited investors. Since these offerings fall under Rule 506(c) of Regulation D, investors will be required to verify their accredited status through a third party such as a CPA, financial advisor, attorney, or a service like www.verifyinvestor.com.
Accredited investors are individual investors who either have a net worth of at least $1,000,000 excluding the value of one’s primary residence, or have earned income over each of the last two years of at least $200,000 and have the expectation of making the same amount in the current calendar year. If you don’t qualify under that standard, you can choose to combine your income with your spouse, and the new threshold of qualification would be $300,000.
In addition, entities such as LLCs, 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 oil of the equity owners are accredited investors.
It is also important we ensure we are a fit for one another. This type of investing is not appropriate for every investor. To determine if commercial real estate investing is right for you, please schedule a call with us.
Commercial real estate can provide several tax advantages to an investor:
- Cash flow distributions will often flow to you on a tax-deferred basis
- Proceeds from refinancing events typically come to you with no immediate tax obligation
- The step-up in basis benefit reduces your heir’s tax obligation when they sell the inherited asset
This is not professional tax advice and should not be relied upon for making investment decisions. Investors should consult with their financial advisor, accountant and/or tax attorney for tax advice specific to their particular needs and objectives.
Because you will invest in a Limited Liability Company, your liability cannot exceed the amount of your investment plus amounts distributed to you. One value of real estate as an investment as compared to stocks, etc., is that it is highly unlikely for property to lose all value, as is possible when investing in stocks. Companies can go completely out of business or have their value reduced to virtually nothing. The passive investors carry no lending risk.
No. While Certainty REI does not make any guarantees regarding investments in these funds, we have used documented historical/construction data on the markets and properties involved, along with commonly used industry methods to conservatively calculate the potential of these investments. Because it is not possible to predict future events, which can influence any investment, it is not possible to guarantee this as an investment. Guaranteed investments generally carry very low returns as compared to the potential returns projected for these funds.
The Certainty REI team leverages years of real estate and construction experience to maximize each project’s success. Certainty REI realizes a one-time capital placement fee, routine asset management fees, and a share of upside profits after investors receive distributions.