FREQUENTLY ASKED QUESTIONS

You are purchasing shares of an LLC. Much like investing in the stock market, Equity Crowd allows you to partner with us by selling shares in the company. To determine your ownership in the LLC, divide your investment amount into the total offering amount. For example, a $50,000 investment would result in 3.57% ownership in the LLC if the total offering amount is $1,400,000. (50,000/1,400,000)

No, the capital Equity Crowd contributes will be treated the same as all other investor-members.

This is an easy process completed online. Simply click the “Invest” button. After you sign the investment agreement you are able to fund your investment. You can initiate a wire transfer or mail a check to be deposited into our secure escrow account.

After Equity Crowd holds the property to collect profit or rental income, the property can be sold or refinanced with long term debt. In the event the property is sold, you will receive the return of your 

invested capital plus the profits from the sale. If the property is refinanced, you will receive a return of your invested capital & still keep interest in the company.

It is possible to sell your interest in the LLC in order to receive a return of your invested capital. In this scenario, either Equity Crowd can purchase your ownership, or we can assist in a match-making effort to find someone interested in purchasing your ownership. Equity Crowd needs to approve the sale and retains a first right of refusal to purchase your ownership should you decide to sell. In general, you cannot sell your ownership within 12 months from your initial investment date.

No. Investors retain 100% ownership of the capital they contribute. Invested capital must be returned to investors when the property is sold or refinanced.

Equity Crowd's goal is to own the property long term to collect rental income & take advantage of the benefits of owning real estate. It is in the best interest of everyone that Equity Crowd sells the property

at the right time, this event may occur sooner or later depending on market conditions, and performance factors.

Yes. The company will be writing off depreciation on the property and all other business expenses related to the operation of the rental properties. So the taxable income you make from this investment will be reduced by these tax benefits.

The operating & investment agreements describe the relationship between investor members and the manager. For the most part, the manager retains the right to make all decisions, however, there are certain decisions that will be made through a vote of the investor members in order to reach a majority consensus.

In the worst-case scenario, investors could lose some or all of their invested capital. The operating agreement details a relationship wherein the investors can vote out Equity Crowd as manager of the LLC if Equity Crowd is not doing its job as Manager. While Equity Crowd can’t  imagine these scenarios occurring, it’s important for our investors to know all of the risks associated with the investment. Please reference the Risks of Investing section of the Disclosure Document.

There are two returns that we provide projections for; the Cash on Cash Return (CoC) and the Internal Rate of Return (IRR). The CoC is the return based on the rent income from the property each year. The IRR takes into account the rent income PLUS the profit from selling the property.

You are purchasing ownership in a company that owns real estate. You are secured by the legal rights afforded to you in the operating agreement of the company. This includes your legal right to

a share of the profits that the property generates, and also your legal right to a return of your invested capital when the property is sold. When the property is sold, it is the obligation of the company to return invested capital back to investors before any profits are split among members. We use an LLC to own the property for structure & liability reasons.

You will receive a Schedule K1 at the conclusion of each tax year. Equity Crowd intends to send this document to you by the end of February each year.

Equity Crowd pays state tax liability on behalf of all investors. If you pay state income tax where you live, then the state tax that is paid on your behalf is deductible in your state. We recommend you consult with your tax professional.

Yes. One of the most popular ways individuals invest using their retirement funds is by using a Self-Directed IRA. Many custodians exist and Equity Crowd works with all of them.

We recommend you consult directly with your tax professional. If a loan is being used to acquire the property, then UBIT will most likely apply.

No. Unfortunately, the structure of this investment does not qualify for 1031 exchanges of real property.

While insurance policy specifics can change from one property to another, in general we carry a minimum of $1,000,000 of general liability including hired and non-owned auto, $1,000,000 of

umbrella liability, full replacement special-form property coverage, 100% business income, ordinance or law, and equipment breakdown. Typical deductibles are $5,000 to $10,000.

Equity Crowd leaves it up to the seller of any ownership to set a sales price. Equity Crowd retains the first right of refusal to purchase any ownership that is offered for sale, and our company also retains

the control to approve or deny any sale of ownership. The partnership takes on additional accounting and legal costs when a sale of ownership occurs so we ask the seller of such interest to cover these costs, which are typically $300.