FAQ

General Questions

Crowdfunding is one of the hottest buzzes in the financial service industry, and it is now introduced to the real property investment in both residential and commercial. Rather than investing millions of dollars to own the entire property and dealing with endless annoyances from day-to-day operations, individuals are now able to invest only thousands of dollars through crowdfunding can gain profits by a few simple clicks on their computers. Besides, foreign investors could invest in American real estate market across the boundaries.

When investing in a REIT, most investors have little to no information regarding actual properties the REIT invests in and cannot invest in their own backyard. Through crowdfunding, investors can invest in individual properties, allowing for added transparency and control over investment selection and location. In addition, REITs are such large entities that they can rarely participate in many of the smaller investments crowdfunding opportunities will offer, such as niche retail centers or multi-family buildings with 10, 20 or 40 units.

CrowdFunz is an online investment platform for residential and commercial real estate, often times referred to as crowdfunding platform or investment marketplace.

CrowdFunz gives investors the ability to:

  • Browse investment offerings based on investment preferences including location, asset type, risk and return profile;
  • Transact entirely online, including digital legal documentation, funds transfer, and ownership recordation;
  • Manage and track investments easily through an online portfolio; receive automated distributions and/or interest payments, and regular financial reporting.

An accredited investor is a term used by the U.S. Securities and Exchange Commission (SEC) under Rule 501 of Regulation D. In order to qualify as accredited, an investor must accomplish at least one of the following:

  • Earn an individual income of more than $200,000 per year, or a joint spousal income of more than $300,000 per year, in each of the last two years and expect to reasonably maintain the same level of income.
  • Have a net worth exceeding $1 million, either individually or jointly with his or her spouse.
  • Be a bank, insurance company, registered investment company, business development company, or small business investment company.
  • Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
  • Be a business in which all the equity owners are accredited investors.
  • Be an employee benefit plan, a trust, charitable organization, partnership, or company with total assets in excess of $5 million.

All investment opportunities listed on our site are US-based projects.

No. We do not currently offer international projects.

Yes, you may invest through a LLC, LP or trust. However, we will request for additional information concerning an investing entity. Please contact info@crowdfunz.com for more information.

Non-US based investors may currently invest in Crowdfunz offering. Please contact info@crowdfunz.com for more information.

The Crowdfunz Rating provides investors an easy way to compare investment opportunities across our site. It is our objective opinion based on actual information about the projects. Range of the rating is from letter A to E: A means less risk and E means more risk. Crowdfunz Rating is for informational purposes only and is not investment advice. Each rating is not individualized for any specific investor and should not be considered as a prediction of how investments will actual perform.

Specific questions regarding to offerings can be found on offering page, and please read carefully before investment. If you have additional detailed questions, please consult an investment professional or contact us at info@crowdfunz.com.

The company was founded in 2015, although our co-founders all have more than 10 years experiences in commercial real estate. Our management team all specialized in different areas, such as real estate, finance and internet.

No. We don’t accept cash. For protecting every investor, we require each client invest money from formal channels, such as bank account, which can be connected to our online escrow service; we approve the investment only if the client had passed the due diligence against money-laundering and other regulatory and financial hazards.

Yes. Foreign investors are also responsible for paying taxes according to the laws. If a foreign investor does not have SSN, he is legally required to apply for an ITIN (An Individual Taxpayer Identification Number) to pay the taxes. For foreign citizens, please consult a professional accountant or contact us at info@crowdfunz.com.

Crowdfunz sets particular payment dates based on the status of the invested project. Reading the documents may help investors know the details.

Generally, for equity investments, investors will receive principals and earnings after project completion; for debt investments, investors will receive principals and interests in terms of the invested projects (notes of payment are detailed in the offering documents).

Once the application is fully completed, our professional team, which consists of real estate, financial, IT, and legal experts, would investigate the borrower and the underlying project via strict due diligence. Relevant survey data, results, and rating will be published in transparent reports, and our qualifying rate is less than 5%. If the investment project is approved, potential investors may find the project on the website and submit their investment applications. As soon as the crowdfunding amount from intended investors has reached the financing objective, Crowdfunz assembles all investors, incorporates an independent LLC(Limited Liabilities Company), and formally launches the project investment. Finally, the developer will be responsible for construction, sales, and asset management, and investors will periodically receive financial reports and gain return on investment, corresponding to the prior agreements.

Investing Questions

Crowdfunz adopts the crowdfunding's conventional approach by which investors own prorated shares of a Limited Liability Company (LLC).

We currently offer three types of investment: Debt, Preferred Equity, and Equity.

The minimum investment amount is varied in accordance with each project. In general, the investment can be as low as $10,000.

Once an investor makes his/her investment as well as legal documents being signed, the money will be transferred to and held at a third-party escrow account. When the fundraising target is met, also, the real estate transaction is completed, the money will be transferred out and used for the specific project development.

The terms, agreements, clauses, or CC&R (Covenants, Conditions, and Restrictions) of each investment on Crowdfunz are specified. It is important for our investors to review and understand in details the offering documents provided by each project before investing.

Timing for distributions will entirely depend on what type of property is being invested in. In general, for Ground-up development projects, earnings should be distributed after 18-24 months from the initial investment date. For other projects with stable cash inflows, distributions would be started after a few months from the initial investment. Please read the offering documents carefully for more information about the distribution.

Each project on CrowdFunz carries individual degree of risk. Similar to the investments in capital markets, real estate investments may also lose value in case of market or economic recession. It is barely possible to predict the changing economy even if a bunch of seasoned economists flock together, whereas, CrowdFunz established rigorous risk rating system, helping its community rationally choose the optimal risk-return trade-off.

First of all, CrowdFunz leads strict background check on the debtors/developers in order to eliminating suspicious activities and producing objective and fair valuation to select trustworthy projects. If a borrower defaults in the payment or performance of any obligation, eventually, CrowdFunz will apply emergent solutions, according to the laws, to reach maximum recovery. In addition, when signing the contracts with each real estate company, CrowdFunz also settles certain legal actions that will be executed at default to largely protect our investors' interests. Since the operations, there is neither a cooperative developer nor a sponsor being recorded a single payment default.

When an investment has closed, investors can track the project's performance and find all the relevant deal documents, and receive updates, distributions, and tax documents in their portfolios. CrowdFunz will also send the investors Form-1099 or Form K-1 before the next middle-March for tax return.

CrowdFunz requires each real estate company periodically to provide updates to all investors on a quarterly basis. Updates will be presented via e-mail and the investor's dashboard.

CrowdFunz never accepts excess amount for any kind of Investment. Once the target funding amount is reached, the listing is closed.

The The fundraising phase ends only if the target funding amount has been achieved while all documents has been signed by involved parties. If the target funding amount were not to be reached during the scheduled period, the investors would receive intact amount of refunds.

In a nutshell, no. There is no available markets for the resale of securities purchased through CrowdFunz. The investors may not expect to resell their securities as soon as they decide invest through CrowdFunz.

Investors can only get the principal back after the underlying property is sold or the undertaken loan is paid off. Investors must read the offering documents carefully and understand the holding period of each project before making any investment decision.

The international investor is the one who does not meet the definition of American resident. Some foreign citizens are also considered as U.S. residents if they meet the substantial presence test for the calendar year to meet the test criteria, the foreign citizen must be phisically present in the United States on at least 31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting: - All the days you were present in the current year, and - 1/3 of the days you were present in the first year before the current year, and - 1/6 of the days you were present in the second year before the current year.