Investors - Investment Process

  1. Yes, you can invest through a LLC, LP or Trust or with a joint beneficiary. Once you sign up for EquityMultiple, you’ll be able to create an account for your entity or trust by providing us with appropriate information and documentation through the platform. Once you’ve completed account setup, you’ll have the option of investing through your entity or trust each time you make an investment. Like individual investors, an entity or trust must be accredited in order to invest on EQUITYMULTIPLE. Generally speaking, each owner of an entity, or each beneficiary of a trust, must themselves be an accredited investor, or else the entity must have total assets in excess of $5,000,000.

    Setting up a joint account can also be easily completed through the platform. We’ll need to collect information about you as the primary account holder and certain additional information about the joint account holder. The joint account holder will need to electronically sign a limited power of attorney authorizing you to make all decisions regarding your EQUITYMULTIPLE joint account. This can all be done online via the platform.

  2. Yes. We are partnered with Millennium Trust to offer investments via self-directed IRAs. We are also able to work with certain other SDIRA custodians. Due to the additional manual processes and management required, our minimum for investments through an IRA is $20,000. For further questions regarding the process, please contact info@equitymultiple.com, or reach out to us via the chat window at the bottom right.

  3. Investing on EQUITYMULTIPLE is designed to be both easy and secure. Registration is a simple process – start by creating an account. You’ll receive email confirmation, and from there you can register and immediately begin browsing the investment offerings. You can review diligence information, ask questions and, if you decide to invest, complete your funding online. For more information, click here.

  4. Due to federal securities laws, only accredited investors can invest in offerings on our platform.

  5. For the full definition please click here. The federal securities laws define the term “accredited investor” as any of the following:

    • a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year;
    • a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
    • a corporation, partnership or charitable organization with assets exceeding $5 million;
    • a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person;
    • a director, executive officer, or general partner of the company selling the securities;
    • a business in which all the equity owners are accredited investors
    • a bank, insurance company, registered investment company, business development company, or small business investment company; or
    • an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million.
  6. When you sign up for the platform you’ll need to self-certify that you’re an accredited investor and will need to tell us how you qualify. We’ll ask you to re-confirm this each time you invest but otherwise we typically don’t require any documentary evidence of your financial status. Your personal financial information will be kept private in accordance with our privacy policy.

  7. Any person or entity with a U.S. tax identification number (social security number or Employer Identification Number), and who meets the SEC’s definition of “accredited investor” is eligible to participate in EQUITYMULTIPLE’s investments. While most of our investors are U.S. citizens, some are legal residents of the United States or foreign nationals who own or partially own an investing entity incorporated in the United States.

  8. The minimum will start as low as $5,000 but will vary from offering to offering. The investment minimum is most commonly $10,000. Additional shares are typically offered in increments of $5,000 above the minimum.

  9. Once you determine you are investing in a particular offering you will be guided through a secure online process to complete your investment. Funding can be completed entirely online via secure ACH by linking to an existing bank account – bank accounts must be verified by confirming two micro-deposits, which will appear in your bank account 1-3 business days after you begin the linking process. If you prefer to fund offline, you can transfer funds by check or wire. Funds are held in segregated account at Bank of America and are FDIC insured up to the applicable limit.

  10. Most offerings hit or exceed their full funding amount. In the event that an offering fails to hit its funding target, the Sponsor or Lender will typically accept the reduced investment amount and fund the balance directly or through other investors. In the event that the investment amount is too low for the Sponsor or Lender to accept, all investor commitments will be refunded in full with no fees deducted. Please note that, to date, this situation has never occurred.

  11. Anticipated returns will depend on the risk profile of each transaction and the terms of the offering. Our target range of projected returns are as follows, by product type: senior debt – 7-12% annual rate of return; preferred equity – 7-12% current preferred return, 10-14% total preferred return; common equity – IRRs (internal rate of return) of 14% or higher. All target returns presented on the platform are net of fees taken by EQUITYMULTIPLE and the Lender or Sponsor. While we model returns conservatively, and do extensive underwriting on each offering, it’s important to note that all investments carry risk. Be sure to review the specific set of risk factors for each offering you consider.

Investors - Investment Structure

  1. No, Equity Multiple, Inc. is not a broker-dealer. However, we are aligned with Growth Capital Services, Inc., a broker-dealer and member of FINRA/SIPC. One or more Equity Multiple, Inc. employees are registered representatives of Growth Capital Services.

  2. EQUITYMULTIPLE pre-funded its first deal in late 2017 and is exploring options to do so regularly in the future. EQUITYMULTIPLE owners and employees also personally invest alongside EQUITYMULTIPLE’s investor network in some offerings.

  3. EQUITYMULTIPLE will control the investment vehicle through which investors commit funds. Investors will have limited voting rights with respect to the EquityMultiple investment vehicle, but no voting rights in the property management company.

  4. Yes, you can invest through a LLC, LP or Trust or with a joint beneficiary. Once you sign up for EquityMultiple, you’ll be able to create an account for your entity or trust by providing us with appropriate information and documentation through the platform. Once you’ve completed account setup, you’ll have the option of investing through your entity or trust each time you make an investment. Like individual investors, an entity or trust must be accredited in order to invest on EQUITYMULTIPLE. Generally speaking, each owner of an entity, or each beneficiary of a trust, must themselves be an accredited investor, or else the entity must have total assets in excess of $5,000,000.

    Setting up a joint account can also be easily completed through the platform. We’ll need to collect information about you as the primary account holder and certain additional information about the joint account holder. The joint account holder will need to electronically sign a limited power of attorney authorizing you to make all decisions regarding your EQUITYMULTIPLE joint account. This can all be done online via the platform.

  5. Investors participating in offerings on EQUITYMULTIPLE purchase restricted securities, which are highly illiquid. You should expect to hold the securities you purchase until they mature or there is a liquidation event. In certain limited cases, you may be able to resell your securities in private transactions subject to the restrictions in the specific offering and provided for under the Securities Act of 1933.

  6. Most debt investment offerings on EQUITYMULTIPLE will be secured by the underlying real estate. Common equity investments offer the potential for unlimited upside, but a significantly higher risk of principal loss, while preferred equity investments offer a hybrid: the opportunity to participate in some of the upside, with the security of being senior to the Sponsor’s equity and other limited partner equity. With all investments on our platform, we pursue opportunities that we believe offer compelling risk-adjusted returns. However, it’s important to note that all investments carry risk.

  7. The remedies available in the event of a Sponsor default will vary according to the investment structure (i.e., common equity vs senior debt) and the negotiated remedies of that particular investment. In general EQUITYMULTIPLE or its affiliate will have limited cure rights and may be able to replace the manager in certain limited circumstances. EQUITYMULTIPLE or its affiliate will, in its sole discretion, exercise the available remedies as it deems necessary to protect the best interests of investors.

  8. With respect to equity and preferred equity investments, the Sponsor will manage the overall direction of the project, though they may retain a third-party property management company. Details of project management will be made available on the Offering Page for any equity or preferred equity investment on EQUITYMULTIPLE. For debt investments, the Lender will be responsible for collecting interest from the borrower and making regular distributions to EQUITYMULTIPLE. In all cases, EQUITYMULTIPLE will manage the relationship with the Lender or Sponsor, provide project updates within the platform, and manage the flow of distributions to our investors.

  9. For common equity investments, there is an annual monitoring and reporting fee on the amount of your investment, typically ranging from 0.5% to 1%. Typically, we also hold a profit participation – we receive 10% of investor profits, but only after you’ve received a full return of your invested principal. This backend compensation helps incentive us to select good opportunities for the platform. For debt and preferred equity investments, we typically don’t charge any fees to investors. Instead, we earn the difference between the amount you are owed as an investor and the amount received on the underlying investment. This “rate spread” is typically 1% but may be more or less. We don’t receive this rate spread until you receive the projected rate for your investment. By subordinating many of our fees to investor returns, we are aligning incentives so that a significant portion of our compensation is dependent on the performance of your investments. For all investments, the returns presented on the offering page are displayed net of all fees.

  10. The terms of each offering are specific to that investment, will depend on whether the offering is debt, preferred equity, or equity, and will vary based on the specific agreed terms with the Sponsor or Lender partner on the offering. Details of each offering’s structure can be found on the offering page for that deal, as well as in the Offering Listing Summary, which is at the beginning of the Investor Packet, found via the ‘Documents’ button at the top of each offering page. In the case of a common equity investment, details of how profits are split between investors, the project Sponsor and EquityMultiple can also be found in this documentation. These are critical details to understand, and we’re always happy to answer any questions or clarify. Investors should carefully review the details of each offering, all documentation associated with offering and perform any other due diligence they feel is necessary to understand the terms and risks associated with their investment.

  11. Project payment dependent notes are special, limited debt obligations issued by EQUITYMULTIPLE or its affiliates that are tied to the performance of a specific underlying real estate asset. The performance of each series of notes depends on the economic return of the corresponding real estate asset. Any payments received by EQUITYMULTIPLE or its affiliates on the underlying real estate investment will be passed on to investors according to the terms and schedule of the notes. Not all offerings available on www.equitymultiple.com will be structured as project payment dependent notes. Please consult the deal-specific documentation, including the PPM and notes themselves for additional information.

  12. Offerings on EQUITYMULTIPLE are tied to an underlying real estate investment. The underlying investment will be structured in one of three ways – common equity, preferred equity or debt. As an investor, you’ll participate in these investments in one of two ways: 1) by purchasing an interest in an EQUITYMULTIPLE managed LLC that in turn invests in the underlying property-owning entity (or an affiliate) ; or 2) by purchasing a project payment dependent note, the proceeds of which are invested in the project. In either case, payment is wholly dependent upon the issuer (i.e., the LLC or issuer of the notes) receiving distributions on the corresponding project investment – in other words, the EQUITYMULTIPLE investment entity (the issuer) must receive payment from the underlying investment in order to pay investors. Debt investments are typically secured by first lien on the underlying property but in some cases may be in a second or later lien position. This information will always be included on the offering page or in the investment materials. In the case of debt and preferred equity offerings, EQUITYMULTIPLE investors are in a position senior to all project equity.

  13. The 2012 Jumpstart Our Business Startups Act (“JOBS Act”) is frequently associated with the creation of investment crowdfunding, allowing companies to offer private securities broadly to individuals. However, EQUITYMULTIPLE is not currently operating under either Title II (general solicitation offerings) or Title III (offerings to non-accredited investors) of the JOBS Act. Rather, all investments made through EQUITYMULTIPLE are conducted as private placements for accredited investors under Rule 506(b) of Regulation D under the Securities Act, a rule which has been in broad use for decades. Potential investors must first qualify as accredited investors and satisfy certain additional criteria before they gain access to any offerings on our platform.

    For much more on the modern landscape of real estate investing, and how EQUITYMULTIPLE fits in, please consult our learning series.

  14. Growth Capital Services is a registered broker-dealer, and member FINRA/SIPC, and is EQUITYMULTIPLE’s broker-dealer partner. Growth Capital Services provides compliance and regulatory oversight to EQUITYMULTIPLE. All securities offered on www.equitymultiple.com are offered through Growth Capital Services.

Investors - General

  1. EQUITYMULTIPLE is an online investment platform that connects accredited individuals with exclusive, pre-vetted commercial real estate investments from experienced sponsors and lenders at low minimums. We help accredited investors create and build a diversified real estate portfolio, making passive investments through a secure online platform, from anywhere. While access to real estate has traditionally been synonymous with high investment minimums and limited opportunities, we offer access to frequent and varied opportunities across the country, with investment minimums as low as $5,000. Our focus is on commercial real estate: the core asset classes of multifamily, office, retail and industrial, as well as emerging and alternative real estate asset classes like self-storage, manufactured home communities, and student housing. By offering private-market real estate investments at low minimums, robust in-house underwriting, and a seamless investing process, we allow individuals to participate alongside institutional investors. Investments made through EQUITYMULTIPLE are managed by professional real estate companies who will deal with all aspects of the property and business plan.

    As described in more detail on the How It Works page, each investment is sourced and diligenced by an experienced sponsor or lender before coming to EquityMultiple. We then vet the sponsor or lender before reviewing the details of the particular investment opportunity. For those offerings that survive this process, we present the relevant investment information clearly and transparently and are always available to answer questions. We offer opportunities across a variety of markets, asset types and return profiles so you can better meet your investment goals and diversify the real estate portion of your portfolio. Once you decide to invest, you’ll be able to complete the entire process on our platform through your computer, tablet or phone – providing personal information, electronically signing documents and linking your bank account to send and receive funds. Once complete, you can monitor your portfolio and will receive earnings and updates as they come in.

    For more on the landscape of modern real estate investing, and where EQUITYMULTIPLE fits in, please consult our learning series.

    Private real estate investments offer low correlation to public markets, a hedge against inflation, and downside protection. This is why institutional investors like the Yale Endowment have historically kept 10-20% or more of their portfolios in private real estate. EQUITYMULTIPLE allows you to do the same.

  2. We pride ourselves on our industry-leading customer service. You can reach support on any page of www.equitymultiple.com by clicking the blue circle with a question mark in the lower right-hand corner of your screen. For general support you can also reach us by email at help@equitymultiple.com.   If you have any feedback on how to improve EQUITYMULTIPLE, please let us know at feedback@equitymultiple.com. No matter how you reach out to us we’ll make sure that your question gets answered.

  3. We work with experienced, reputable real estate operating companies whose principals have a strong track record of success and who have raised institutional capital for multiple private real estate offerings. EQUITYMULTIPLE sponsors typically have an existing network of repeat accredited investors and institutional investors. We also employ a third party background check company to issue a report on each Sponsor. For more information, please review our Raise Capital page and this article on our diligence measures.

  4. You will rarely see over 3 investments live on the EQUITYMULTIPLE platform at one time. There are two primary reasons for this: 1) We subject each investment we consider – and each sponsor and lender we consider working with – to extensive diligence and underwriting. While we continue to scale up investment volume, we will always prioritize quality over quantity, and only around 5% of investments we evaluate ultimately make it onto the platform; 2) Our investments tend to fill up quickly; some investments become oversubscribed within just hours of being posted. In order to ensure that you are in a position to move quickly on investments that are a good fit for you, be sure to complete your account, and be sure that our domain is whitelisted on your email client so that you receive all announcements of new investment opportunities.

  5. Our team, along with our partners at Mission Capital, has been involved in billions of dollars in real estate transactions (for more on the combined team, see here). Our fee structure ensures that we only make a profit when our projects succeed and deliver projected returns to you and other investors. We can’t promise that every deal on our platform will exceed return projections (and you shouldn’t listen to anyone who makes such claims), but we will work tirelessly to find and diligence projects that deliver compelling risk-adjusted returns; indeed, we’ve staked our business on it. We’re also committed to transparency and customer service – we’re always happy to field questions frankly and thoroughly, and to discuss any concerns over the phone.

  6. There are several key differences: 1) REITs only allow you to invest in a pool of real estate assets, frequently without knowing what the underlying assets are or will be, while EQUITYMULTIPLE offers transparency and control over each investment you make; 2) REIT fees can be particularly onerous, up to 15% for private REITs; 3) Public REITs are publicly traded and thus offer some liquidity that EQUITYMULTIPLE investments do not. The downside of this exposure to the public markets is that the value of REIT shares is less associated with the underlying real estate because it is subject to market sentiment fluctuations. This market correlation limits the effectiveness of public REITs as a hedge against other public market investments (i.e., stocks). Ultimately, REITs and offerings on EQUITYMULTIPLE are very different financial products that both are tied to the real estate industry and there is room in many investor portfolios for both. For more on the topic, please review this article.

  7. Commercial real estate investments from experienced companies; senior debt, targeting 7-12% net annual fixed return for investors; preferred equity, targeting 7-12% current preferred return, 10-14% total preferred return; equity, targeting mostly stabilized, cash-flowing assets and IRR’s of 14%+

    For more on how EQUITYMULTIPLE sources and evaluates deals, and the underlying practices employed by EQUITYMULTIPLE’s real estate team, please see our learning series.

  8. While there are several established platforms for real estate investing, we offer a unique approach and a management team with far-reaching industry experience. We focus almost exclusively on institutional commercial real estate (whereas other platforms feature single-family and sub-institutional properties) and offer a range of opportunities across the country from experienced lenders and sponsors. We are also one of the few that offers equity, preferred equity, and senior debt investments, letting investors select the type or types of investments that fit their investment goals and build a diversified real estate portfolio all within the EQUITYMULTIPLE platform. Despite the range of opportunities available, our goal is to offer standardization and ease for managing your investments. Investments on our platform are generally focused on strong cash flow and all payments and updates are centrally managed and administered byEQUITYMULTIPLE.

    While many other platforms in the space are backed by venture capital, we are backed by a national commercial real estate capital solutions firm – Mission Capital – whose principals have tens of billions of dollars in commercial real estate transaction experience. In combination with Mission Capital, we have a network of thousands of experienced sponsors and lenders, contributing to quality deal flow for our investors.

    We are committed to transparency, attentive customer service, and providing through asset management updates throughout the life of investments.

  9. While we do transact business online, we are real people committed to transparency. We’re always happy to talk on the phone – you can call us at (646) 844-9918. You can learn more about the backgrounds of our team by checking out the About Us page.

    For more detail on how EQUITYMULTIPLE is unique among online real estate investing platforms, see our article on the topic.

  10. EQUITYMULTIPLE was formed in February of 2015. After a period of software engineering and build-out of our security measures and legal and regulatory framework, we opened our platform to investors in September, 2015. Our partner, Mission Capital, has been in business since 2002.

  11. No, EquityMultiple is not a registered broker-dealer or investment advisor. All securities offered on the EquityMultiple platform are offered through Growth Capital Services, a registered broker-dealer and member of FINRA and SIPC. Growth Capital Services reviews each offering posted to the EquityMultiple platform and provides compliance oversight of EquityMultiple. Certain employees of EquityMultiple are registered representatives of Growth Capital Services.

  12. EQUITYMULTIPLE is not a registered investment advisor and makes no recommendations about any particular investment and each investor must do their own due diligence before making a decision to invest. EQUITYMULTIPLE strives to provide relevant information including market data, sponsor information, property information and third party information. Each deal posted on EQUITYMULTIPLE comes from a Sponsor with a track record of success.

  13. As with any investment opportunity, no guarantees are made with respect to return and, though EQUITYMULTIPLE strives to provide quality deals, there is the potential for a net loss against the initial investment amount and investors should be prepared for the potential of such loss, up to the entire amount of their principal investment. The investment documents will include a set of risk factors that address more specific risks associated with a given deal and we strongly encourage you to review these risk factors in detail before making any investment.

  14. Our fundamental business is providing a platform that connects investors with experienced sponsors and their investment offerings. In certain cases, EQUITYMULTIPLE, or one of its principals, owners, employees or affiliates may also invest in the project.

  15. The Sponsor will manage the overall direction of the project but will generally be required to hire a professional manager to manage day-to-day property operations. In certain cases, the Sponsor will manage the property directly.

    An affiliate of EQUITYMULTIPLE will oversee the receipt of distributions from the Sponsor and making corresponding distributions to investors, as well as the administrative functions related to the particular investment vehicle that an investor has invested in.

Sponsors & Lenders

  1. We do our best to head off potential questions before they’re asked by preparing a comprehensive online offering page. We also ask each Sponsor or Lender to participate in a simple 30 minute Q&A, which we record so that investors can hear about the project directly from you. When unforeseen questions crop up, we’re able to answer many of them based on our preliminary diligence. Any questions we’re unable to answer we compile and get answers from you. We pass these answer along to investors so you don’t have to worry about any direct investor communication. Similarly, we handle all preparation of investor offering documents.

  2. We formed in early 2015, and opened our first deal to investors in September 2015.

  3. EQUITYMULTIPLE raises equity, preferred equity, and syndicates senior loans from experienced lenders. In no case will EQUITYMULTIPLE investors have voting rights.

  4. Typically the more materials that you can provide at the outset the better.  We initially require background information on the Sponsor or Lender, a copy of the offering memorandum (“OM”) (or other investment summary) and a pro-forma.  For projects that make it to the next stage of review, we provide a more fulsome diligence list, including key items like loan documents, third party reports and rent roll.  In all circumstances, your information is treated as confidential and is only shared with your approval.

  5. Our deals are structured as 506(c) offerings under Regulation D of the Securities Act of 1933, meaning they are eligible for general solicitation and can be advertised broadly, provided that we include appropriate risk disclosures. This gives us latitude to promote the project without violating the traditional prohibition (under the old rule 506(b)) on general solicitation. Despite this, our primary focus is on our presenting each deal to our existing investor base. No one can invest without creating an account on our platform and providing detailed personal and suitability information, which we hold strictly confidential. We’re similar cognizant of confidentiality concerns regarding the project itself and have built several options into our platform to protect confidential information. We can require all potential investors to confirm a click through confidentiality agreement prior to seeing any details about your project. For sensitive documents, we can make them available only upon request and upon executing a written confidentiality agreement.

  6. We focus on primary and secondary markets characterized by strong demand and underlying market fundamentals. In certain instances, we will consider opportunities in tertiary markets with stable demand drivers and/or promising demographic trends. Returns must be reflective of market risk. While we consider a broad range of assets, we typically focus on value add or stabilized projects (rather than ground up or entitlement plays) and concentrate in the core asset classes. For more information on typical deal parameters click here.

    For much more information on EQUITYMULTIPLE’s practices and the broader commercial real estate landscape, please check out our learning series.

  7. For debt deals, we target a net APR to investors of 7-12%. For preferred equity, we target a net current preferred return to investors of 6-12%, and net total preferred return (including any backend accrual) of 10-14%. For equity deals, we target a net cash-on-cash return of 6-12% to investors (though will accept lower in certain major markets), and net IRR to investors of 14%+. In all cases, we must determine that deals offer attractive risk-adjusted returns to our investors in order to accept a deal.

  8. Investors invest into a deal specific EQUITYMULTIPLE investment vehicle, which in turn invests into the property owning entity (or an affiliate thereof). As the Sponsor or Lender, that investment vehicle will be the only EQUITYMULTIPLE investor. You provide distributions, reporting and tax document to us directly for that entity and we’re responsible for passing it along to individual investors.

  9. You are not required to interact with our investors at any point. However, most prospective investors will have questions regarding project details. While we work with you to create a fully detailed and compelling offering page, some investors appreciate hearing about the deal from you, the sponsor or lender. To that end, we’ll typically conduct recorded Q&A sessions in order to further communicate the merits of the deal.

  10. Our initial investor base came from the combined network of the EQUITYMULTIPLE team and our partner, Mission Capital. That initial group has grown dramatically since our launch in September of 2015. Investors have discovered EQUITYMULTIPLE through the positive press we’ve received, referrals from existing investors, search engines and advertisements. All investors must be verified as accredited prior to participating in any of our offerings.

  11. The EQUITYMULTIPLE team possesses an extensive nationwide network of contacts in real estate development and investing. This is driven in part by our partnership with Mission Capital, which has built one of largest networks of Sponsors or Lenders in the country after over 14 years in business and more than $65 billion in closed transactions. Many of our prospective deals come from this combined network, while others are submitted by Sponsors and Lenders who have found us organically. In all cases, prospective deals undergo our thorough underwriting process before being presented to investors.

  12. As of September, 2016, we’ve closed 13 deals for projects totalling approximately $290m in total capitalization. Our typical raise is $500k to $1m per deal and we can act as the sole equity partner or can be part of a larger group of investors. If your equity needs are more than what we can provide please let us know and we can discuss potential solutions.

  13. No, EQUITYMULTIPLE is able to help provide financing across the capital stack. For Sponsors, we raise both equity and preferred equity from our network of accredited investors. We can also help arrange institutional equity and debt, either ourselves or through our partnership with Mission Capital.

    For Lenders, we syndicate portions of senior loans. These loans are typically short term (6-18 months) and high yield (7-12% net to investors).

  14. The only fees we charge to Sponsors and Lenders come upon successful close of funding. We don’t participate in the Sponsor or Lender’s project upside but instead earn additional compensation from our investors. Fees vary depending on the offering structure and the target raise amount.

    Typically fees are 2-4% of the amount raised, with smaller equity raises typically ranging highest.

  15. Unlike our competitor platforms, EQUITYMULTIPLE doesn’t act as a direct lender. Instead, we work with established bridge and hard money lenders to syndicate a portion of their loans to our investor base.

    Lenders are able to keep the majority of their origination points and earn a spread on the rate, increasing their return on dollars lent and freeing up capital for future loans.

    We only work with Lenders with strong track records and reputations. If you’re interested in working together, please contact us by phone (646-844-9918) or email at info@equitymultiple.com. Once we’ve determined it’s the right fit, we’ll move ahead with diligence of a particular loan or loans. Over a period of 1-2 weeks you’ll submit diligence materials and we’ll work together to finalize the structure of the investment and prepare the offering materials. Once the deal goes live on our platform, we present your deal to our investor base and work to raise the funds as quickly as possible, typically in 30 days or less.

  16. We only present opportunities to our investors that offer the potential for strong risk-adjusted returns. This means we vet each project before deciding to move forward. In order to make this review process as efficient as possible on both sides we ask that you submit some initial information about you and your project. Start by creating an account. Once you register, you can submit a project at any time by hitting the “Raise Capital” button in the top navigation. Here you’ll provide basic background about your company and your project, including an offering memorandum and pro forma. Our investment team will perform an initial review and get back to you within 1-2 business days with initial feedback.

    If the project is a good fit, we’ll schedule a call to discuss next steps. Over the next 1-2 weeks you’ll submit diligence materials and we’ll work together to finalize the structure of the investment and prepare the offering materials.

    Once the deal goes live on our platform, we present your deal to our investor base and work to raise the capital allocation funds as quickly as possible, typically in 30 days or less. For more information on the capital raising process click here, and for information on typical deal parameters click here.

  17. Given the nature of online financing, some of your general transaction information will be available to the public or registered investors. More sensitive documentation will be available after users accept a confidentiality obligation. We will work with you to strike the best balance between publicizing your offering to as many investors as possible and keeping your sensitive information confidential.

  18. EQUITYMULTIPLE will control the investment vehicle which invests in the real estate and into which investors commit funds. These investors will generally be passive and not have voting rights.

  19. No, the ability to simultaneously raise additional institutional capital through Mission Capital is a benefit of working with EQUITYMULTIPLE, not a requirement.

  20. Most offerings on EQUITYMULTIPLE are tied to an underlying common equity, preferred equity or mezzanine debt project investment. The investor will participate in these investments in one of two ways: 1) by purchasing an interest in a special purpose LLC that in turn invests in the project; or 2) by purchasing a project payment dependent note from an EQUITYMULTIPLE directed LLC, which in turn invests the proceeds in the project. In either case, returns to an investor are tied to and dependent upon the EQUITYMULTIPLE investment vehicle receiving distributions on the corresponding project investment.

  21. You will receive an email shortly that provides information outlining timing and next steps. You can expect a preliminary indication of interest or request for more information within two business days.

Data Security

  1. We use aggregated investor preference information to help drive decisions about what types of offerings and platform features our investors want to see. We use your individual preference information to customize your EQUITYMULTIPLE and make it easier to access investment opportunities that might interest you.

  2. Keeping investor information secure is a top priority for EQUITYMULTIPLE. EQUITYMULTIPLE’s physical infrastructure is hosted and managed as a Heroku application within Amazon’s secure data centers and utilize the Amazon Web Service (AWS) technology. All sensitive data is encrypted and stored within databases to meet security requirements. Data encryption is deployed using industry standard encryption and the best practices for our technology stack. Here’s more on our security practices.

  3. The secure handling and storage of your data has a permanent place at the top of our product requirements. We use bank-grade protocols to transmit and store your data, deploy state of the art physical security like biometric scan access in our data centers, and maintain a development policy which puts your privacy first. On top of that, our engineers have years of experience in building secure systems that pass FDIC and retail bank compliance tests.

  4. We use aggregated investor preference information to help drive decisions about what types of offerings and platform features our investors want to see. We use your individual preference information to customize your EQUITYMULTIPLE and make it easier to access investment opportunities that might interest you.

Investors – What happens after investing?

  1. Generally, you will receive a K-1 for your equity investments and either a 1099 or K-1 for your debt or preferred equity investments. We work with sponsors and lenders to deliver your tax documents as soon as possible to help ensure timely filing.

  2. Pursuant to our agreement, sponsors are required to provide quarterly updates and financials, which we review closely. It is in our interest to ensure that returns to our investors are maximized. We work closely with sponsors, and often on a recurring basis, providing sponsors the benefit of repeat capital through an efficient process. Thus, sponsors are incentivized to deliver and conduct business honestly.

  3. While we have no intention of going out of business, we realize the necessity of protecting your investments in the event that we go bankrupt or otherwise dissolve. Each investment offered on EquityMultiple is made through a deal specific LLC. These investment vehicles are set up to help ensure bankruptcy remoteness, meaning they can continue to exist independently even if their parent company goes into bankruptcy. Each investment vehicle will continue to be entitled to receive distributions from its underlying investment and each investor will continue to be entitled to their portion of that distribution.

  4. The sponsor of each offering is required to submit ongoing updates and financial reporting to EQUITYMULTIPLE. We will present all of this information to you on your portfolio shortly after we receive it, typically on a quarterly basis. You will also receive project updates and notification of distributions on your Activity Page, which can be filtered by investment.

  5. Returns will be distributed according to the unique schedule of each particular offering. For cash-flowing investments, distributions will typically occur on a monthly or quarterly basis. Most debt and preferred equity offerings will pay monthly distributions. For investors who funded online via secure ACH, payments will be direct-deposited into the payment account. Investors who paid offline will have the option of linking an account to receive direct deposits. Alternatively, investors can opt to receive checks quarterly subject to certain minimum dollar thresholds.

  6. Investors purchase restricted securities, which are highly illiquid due to the current lack of secondary market. You should expect to hold the securities you purchase until they mature or there is a liquidation event.

    However, you may resell your securities in private transactions subject to certain restrictions specific to each offering and under the Securities Act of 1933. We may be able to arrange the sale of a position between two of our investors, however, this would entail both parties agreeing to transfer of ownership in the amount of the original investment, and should not be counted on as an available source of liquidity.

    In the event that a transfer is needed for estate planning purposes we will work with you to see if such transfer is possible.

  7. Investors participating in offerings on EQUITYMULTIPLE purchase restricted securities, which are highly illiquid. You should expect to hold the securities you purchase until they mature or there is a liquidation event. In certain limited cases, you may be able to resell your securities in private transactions subject to the restrictions in the specific offering and provided for under the Securities Act of 1933.

  8. With respect to equity and preferred equity investments, the Sponsor will manage the overall direction of the project, though they may retain a third-party property management company. Details of project management will be made available on the Offering Page for any equity or preferred equity investment on EQUITYMULTIPLE. For debt investments, the Lender will be responsible for collecting interest from the borrower and making regular distributions to EQUITYMULTIPLE. In all cases, EQUITYMULTIPLE will manage the relationship with the Lender or Sponsor, provide project updates within the platform, and manage the flow of distributions to our investors.

  9. The tax implications of your investment will vary by offering type and you are strongly encouraged to consult your own tax advisors regarding the tax treatment of your investments. Generally, you will receive a K-1 for your equity investments and either a 1099 or K-1 for your debt or preferred equity investments. In general, you may have to file state taxes for each state where you earned investment income via an EQUITYMULTIPLE investment, subject to the tax laws of that state. Again, this will depend on the state, the investment, and the particulars of your tax situation – we encourage you to seek the guidance of an income tax professional on these matters.

  10. You will never be obligated to make an additional capital contribution on your investment. In some cases, the Sponsor may have the legal right to request additional capital from EQUITYMULTIPLE investors. In this case there is no obligation to participate in the capital call, though declining to do so may be dilutive to your investment. In many cases, capital calls are prohibited per the terms of our agreement with the Sponsor. Capital calls are extremely rare in our operating history to date (< 2.5%).

  11. Distribution schedules vary by deal and are typically either monthly or quarterly. Debt deals typically offer a fixed monthly rate of return throughout the loan’s term and a return of principal at maturity of the loan. Similarly, preferred equity deals offer a fixed monthly rate of return throughout the term of the investment and may provide for an additional accrued return when the investment is paid off and principal is returned. Equity deal cashflows are generally not fixed and their frequency and amount will vary based on the performance of the underlying investment.

Investors – Fees & Costs

  1. We vet lenders and sponsors, in addition to performing deal-specific diligence on each project from select lenders and sponsors, thus providing investors multiple layers of diligence. Our secure platform offers investors an easy, closed-loop investing process and asset monitoring throughout the lifetime of projects.

  2. Similar platforms have varying fee structures, some imposing a larger maximum fee on investors, and some seeking to profit via “posting” or tech fees assessed to sponsors.

  3. Registering for EQUITYMULTIPLE and browsing our investment opportunities is completely free. There is also no cost to investors for initiating an investment. Our fees are charged over the course of the deal and are largely dependent on the success of the investment. We structured our fees this way to better align our interests with investors – we are incentivized not only to pick good investment opportunities but also to monitor them for the life of the project.

    Our fees vary depending on the structure of the underlying investment. Once an equity investment has been made, EQUITYMULTIPLE charges investors a small annual fee — typically 0.5% of the aggregate amount invested — that is paid periodically to cover ongoing investor reporting, tax preparation and communications relating to the investment. EQUITYMULTIPLE also receives 10% of investor profits after investors have received all of their initial investment back.

    For preferred equity and debt investments, EQUITYMULTIPLE typically takes a servicing fee in the form of a “spread” between the interest rate being paid by the sponsor or originating lender and that being paid to investors. EQUITYMULTIPLE also generally charges the lender an origination fee and other charges typically associated with initiating a real estate loan or preferred equity investment. In the event of default, extension or other special circumstances, certain fees and charges payable by a borrower or Sponsor will be shared among EQUITYMULTIPLE and investors, as such situations involve increased servicing duties on the part of EQUITYMULTIPLE. Details as to such fees and sharing arrangements can be reviewed in the applicable investment documentation.

    For all investment types, a portion of the total amount raised will be retained by EQUITYMULTIPLE and/or Growth Capital Services to cover certain transaction expenses, originations fees (like those discussed above) and commissions. This retained amount is not a fee to investors, instead it is treated as an expense of the underlying investment. For example, if $500,000 is raised by investors, the sponsor or lender will be net funded, for example, $490,000. The investment will, however, still be treated as a $500,000 investment for all intents and purposes.

    We believe it is essential that all fees and other amounts earned by all parties to an investment are transparent to investors. All return projections for investors are presented net of all fees. Real estate payment and fee structures, particularly for equity investments, are complex because they typically involve multiple parties, involve profit sharing arrangements and payment priorities. For more background on real estate payment and fee structures, check out this blog post. For each investment please review the offering page and offering documentation for information about any specific fees.