RealFirma.com is an online marketplace for real estate investing. Here, investors have the opportunity to invest in Commercial Real Estate investment opportunities with real estate companies while leveraging the expertise and experience of Syndicators who co-invest with them in these opportunities.

Through the RealFirma.com platform, accredited and institutional investors have the opportunity to browse, review due diligence material, and invest, and sign legal documents securely online. Investors also have the ability to track all their investments on the platform via an investor dashboard thus providing them with 24x7 access on their portfolio performance.

Syndicators who identify commercial real estate investment opportunities that they intend to invest in now have the ability to share these attractive opportunities with other investors and create an additional revenue stream for themselves. Syndicators have to go through a rigorous due diligence process before being able to post investment opportunities on the RealFirma.com marketplace.

For an investment opportunity to get listed on the RealFirma.com platform, the following are the steps:

1. A Syndicator has to be accepted on the RealFirma.com marketplace as a Syndicator. For this, a Syndicator has to first go through a due diligence and underwriting process. This process includes background checks, reference calls with sponsors whose projects the Syndicator has previously invested with, and a review of deals that the Syndicator has previously participated in.
2. A qualified Syndicator will then post an opportunity to the RealFirma.com platform and provide key information regarding the investment on standardized templates (provided by RealFirma.com) including highlighting key risks and potential conflicts of interest, as well as doing due diligence on the sponsor and making a physical visit to the property site.
3. The RealFirma.com team then reviews the opportunity to ensure that it meets key parameter metrics such as amount to be raised, committed co-investment by Syndicator, expected project term, expected financial returns such as IRR, equity multiple, key project risks. The team also reviews key assumptions and risks with the Syndicator and Sponsor, reviews sponsor history, and checks for errors in the information submitted.
4. Only after the RealFirma.com team is satisfied with the quality of the information and the with underlying assumptions, the opportunity is posted on the RealFirma.com marketplace for investors to view and invest in

We post investment opportunities under the following real estate investment categories: Retail, Office, Industrial, Storage, Multi-Family Apartments, Leisure, Land, Miscellaneous

Investors get access to deals, Syndicators get carry and Sponsors get an infusion of capital without the need to have multiple small investors on their investor rolls.

Investors get access to a Syndicator’s investment deal flow and benefit from his/her experience in investing in and managing investments. Investors can also invest small amounts starting as low as $10K. Because a Syndicator has to make a co-investment along with investors, their objectives are aligned.

Syndicators get carry for their investments. They can invest 5–10x their typical investment amount, which gives them access to more deals and allows them to lead more deals.

Sponsors get more capital with fewer meetings. They get the attention of a lead who is making a large investment. They get access to the syndicate investors’ networks without putting each one on the investor rolls.

Sponsors don’t pay for syndicate investments. Investors usually pay 10% deal carry to the Syndicator, and 5% deal carry to RealFirma Advisors.

Investors also pay the out-of-pocket costs for each deal—currently $10K in the US. These costs are paid to third parties such as state regulatory agencies, payment processors and accountants.

The lead and RealFirma Advisors do not receive carry until the syndicate investors’ investments and out-of-pocket costs are returned.

Syndicate investors don't invest directly in a project. They invest in a special purpose fund that is created specifically to invest in the project. The fund is formed as a series LLC or LP.

The fund is managed by Assure Fund Management and advised by RealFirma Advisors. The lead also serves as a contractor of RealFirma Advisors.

The lead usually does not invest through the fund but is required to disclose to RealFirma Advisors how much he is investing in the project. Syndicators are required to invest at least 10% of the amount raised for the project.

Carry is a share of the profit of an investment that is paid to the managers of the investment. It is short for ‘carried interest’.

In a VC fund, the limited partners of the fund pay carry to the general partners if the entire fund is profitable. This is called fund carry or net carry.

In syndicates, investors pay carry to the lead for any profitable investment. This is called deal carry. Syndicates use deal carry so investors can opt out of any investment or stop investing anytime.

The fundraising information of a syndicate deal is only visible to accredited investors. The syndicator can also invite other people that they choose to.

To create a syndicate, click the “Register” button, then when logging in, select “Syndicator” button on your user profile. You can then enter information about your investment experiences, area’s of specialization, etc. Once RealFirma has completed due diligence on you, you will either be accepted or rejected as a Syndicator.

If accepted as a Syndicator on the RealFirma.com marketplace, you can then market your syndicate to investors who can agree to invest in your future deals.

To syndicate a deal, select the ‘Create Project’ button after logging in, then fill out all the relevant information on the questionnaire provided. Once RealFirma has done due diligence of the deal, the deal will be posted on the RealFirma portal for investors to invest.

There are no requirements to simply start a syndicate. Your commitments begin when you syndicate your first deal. You must:

Make a significant investment in each deal

Provide an investment thesis for each deal

Disclose potential conflicts of interest such as warrants, advisory shares, or an investment in a previous round

Review and screen potential investors in each deal

Sign a side letter making you an independent contractor of RealFirma Advisors and provide information requested by RealFirma Advisors

Respond to questions from syndicate investors about their investments, although they have limited information rights

Leads are not required to syndicate every investment they make.

The minimum investment for a lead who is investing his own money is generally 10% of the amount that the syndicate raises from individual investors.

Investors can also view the lead's investment amount in any deal and opt out of the deal, for any reason.

Each investor’s commitment will be reduced pro rata if the allocation is smaller than the total commitments from syndicate investors.

E.g. Mark has a syndicate with 10 accepted investors. Each investor has committed $10K to the syndicate, for a total of $100K. Mark personally invests $20K in the deal and asks for an additional $100K for his syndicate. However, the sponsor is only able to allocate $50K to the syndicate. So, each of his syndicate investors will invest $5K instead of the $10K they requested.

If an investor‘s reduced amount is less than the minimum investment for a deal, the investor will invest the minimum investment. In this case, if the reduced amounts still exceed the syndicate's allocation, the lead will use his judgment to reduce investors’ amounts for that deal. The lead will likely favor backers who have expertise in the project markets or have large investment amounts.

Most leads use their full name for their syndicate because they expect investors to join the syndicate on the basis of their personal reputation.

If the Syndicator is investing on behalf of a firm or if they focus on a specific type of investment, they may wish to choose a different name for their syndicate.

Investors should be able to clearly tell who is running the syndicate from the syndicate's name. The name should also not be generic or contain the word ‘syndicate’.

Syndicators will receive K-1’s annually, as needed. Syndicate investors will also receive K-1’s as needed. Be sure to consult your tax advisor.

As long as the syndicated deal is subject to section 506(c), commonly referred to as general solicitation, Syndicators may market syndicated deals.

Limitations on syndicate investments in certain foreign companies (PFIC & CFC)

Investments in certain types of foreign companies are subject to disadvantaged tax treatment and ongoing compliance requirements.

These rules are complicated, but if the investment is in a foreign holding company it may be a Passive Foreign Investment Company (PFIC) and if the investment is in a foreign company that is majority owned by US taxpayers, it may be a Controlled Foreign Corporation (CFC).

As a result of the added tax and compliance burdens, RealFirma does not generally facilitate investment in either PFIC's or CFC's. When a syndicate makes an investment in a non-US project, the sponsor will be asked to certify that the project it is neither a PFIC nor a CFC and agree to ongoing compliance requirements.

A Syndicator can reduce or waive their carry on an investor-by-investor basis.

Investors typically receive quarterly distributions.

Usually we will send the cash flow income to the same bank account that the investor provided for their original investment, though we can accommodate changing a distribution bank account by request. We ask for bank information that will allow for quarterly standard ACH transfers.

Distributions are never guaranteed in amount or timing and you should carefully read the offering documents on the specific deal you are interested in to fully understand how projected distributions look like and what risks are involved.

No. The real estate investments found on RealFirma.com are private transactions in physical properties. The investments are not traded on public stock exchanges and cannot be easily sold or traded.

You may be able to resell your investment security in a private transaction subject to restrictions that are specific to each investment and under the Securities Act of 1933. Since the resale restrictions on RealFirma.com can be very limiting, you should not invest with the expectation of reselling your investment.

When you invest in an equity opportunity, you are typically purchasing shares of an LLC as a limited member. In turn, that LLC owns (directly or indirectly), along with the sponsor, syndicator, and other investors, a share of a joint venture entity that owns a specific investment property, like a specific apartment building. An LLC gives you liability protection, shielding your personal assets from the investment.

Why do investors invest into a RealFirma LLC instead of directly into the company that holds title to the real property?

By investing into a RealFirmal LLC, it minimizes overhead for the sponsors who work with RealFirma.com and allows us to access more investment opportunities for investors. It also allows for streamlined reporting, distributions, and tax documentation through the RealFirma.com platform.

Distributions depend on the specific investment, but are typically provided to equity investors each quarter. Please review the expected distribution schedule for each investment before making an investment. No distributions are guaranteed.

What if I invested in equity and more money is needed for the property in the future? Am I obligated to invest more as an equity owner?

RealFirma.com investments typically do not have capital calls. A capital call is where the investor is required to commit more money to the property, beyond the initial investment. Rather than requiring an additional investment, it is possible that investors will be diluted if more money needs to be raised. While this is typically the case with equity investments offered on RealFirma.com, please check the offering materials for each investment to fully understand your liabilities as an investor.

One of the benefits of investing in real estate equity through limited liability companies (LLCs) is that LLCs can be treated as partnerships for tax purposes. Partnerships generally are not taxed at the entity level (other than annual franchise taxes and filing fees) and can “pass through” applicable items of income, loss and depreciation to their members.

Non-cash depreciation deductions can shelter or eliminate the amount taxable income that may be otherwise passed through to an investor from a real estate equity investment, particularly in the early stages of the investment. As a result, cash distributions received by an investor, in a year when there is no corresponding pass-through of taxable income (again, due to depreciation deductions), may result in lower or deferred taxes.

The special purpose entity (a RealFirma LLC) you own when you invest in an equity transaction reports your annual share of income and loss and distributions on federal and state K-1s that you can then use to prepare your tax return. While the special purpose entities that are formed for each equity transaction typically are Delaware entities, there may be filing requirements and tax liabilities in other states depending on the details of a particular transaction, your state of residence, and the location of the investment property.

RealFirma and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. See offering documents for additional details, disclosures, and disclaimers.

To qualify as an accredited investor, you must meet certain thresholds as defined by the Securities and Exchange Commission under rule 501 of Regulation D. Specifically, you must meet one of the following criteria:

• Earn an annual income per individual of over $200,000 per year ($300,000 per couple) with the expectation of maintaining such level of income in the future.

• Have a net worth of more than $1 million (individually or jointly), excluding the value of a primary residence.

• Be a bank, insurance company, registered investment advisor, 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.

RealFirma.com makes it easy for accredited, and institutional investors to invest in real estate

We provide access to investment opportunities that was historically limited. We pre-qualify Syndicators who then perform a prescribed set of due diligence on every investment that they bring to the marketplace. Additionally, syndicators need to co-invest a substantial amount alongside the other investors. This enables small investors to be able to invest in complex real estate transactions knowing that the experts who are recommending the investment are as vested in the investment as them.

Investors can make small investments that based on the power of the crowdfunding platform can translate to large combined investments in projects for the syndicates.

Investors can take a portfolio diversification approach by making multiple small investments instead of one large one.

The RealFirma.com platform allows investors with online access to all the pertinent information relevant to deciding whether to invest in the opportunity, Once the investor decides to move forward on the investment, the RealFirma.com marketplace enables the investor to sign all legal documents online, and be able to access information pertaining to all their investments through their investor dashboard.

For Syndicators, RealFirma.com provides a ready audience for the investment opportunities that they have identified, manages all the technology, regulatory, and reporting requirements so that the Syndicator can concentrate on sourcing the best investment opportunities and investing their own money as well as the investor’s money.

The Investor is committing to invest in the syndicate’s deals, on the same terms as the lead. The Investor also agrees to pay the lead and RealFirma carry on those deals as well as the out-of-pocket costs of each deal.

Backing a syndicate is not a legally-binding agreement and Investor can opt out of any agreement or stop investing at any time. All existing investments remain intact if after the Investor stops investing.

Syndicate investors receive less information than direct investors. A Realfirma entity or the Syndicator will distribute the following documents to investors when they invest in a syndicate deal:

Documents related to the fund’s formation such as its operating agreement, private placement memorandum and subscription agreement.

General terms of the investment.

Qualitative updates on the company status, if available.

Any information investors need for taxes, such as K-1s, is distributed annually.

Investors can increase or decrease their investment in a particular deal. Any change is subject to approval by the Syndicator. Investors can also opt out of any deal.

The Syndicator may also reduce an investor’s investment in a deal, particularly if it is oversubscribed.

Investors sign documents to invest in a special-purpose fund that invests in the company. This signature is provided by simply checking a box. You do not sign the company’s financing documents.

Under U.S. law, yes. Investors should also check the laws in their country.

A Tax Identification Number (TIN) is helpful but not required.

Investors inside and outside the U.S. should get tax advice when investing.

Restrictions may apply to investors in some countries.

For each syndicate deal, investors become members of a special-purpose fund formed to make the investment. That fund will purchase shares, convertible debt or other instruments issued by the company. Certain taxable events may result in income or losses flowing through the special-purpose fund to its investors. Investors with taxable income or loss will receive K-1s.

If the fund holds an equity interest in a company that is a US Corporation, there is generally a taxable event on exits or when the project is completed or ends prematurely. In some instances, there may also be a taxable event if the fund receives a dividend or distribution.

Non-US investors should consult local tax advisors to understand the local tax impacts of their investment. Be sure to consult your tax advisor to understand the impacts of your investment in the context of your personal tax situation.

First, you must have a qualified Syndicator. RealFirma will typically allow only one Syndicator per project. This means that while a sponsor can work with multiple syndicators, only one syndicator will be able to raise funds for the sponsor for each project.

You must also be a U.S. C corporation or LLC (only if the LLC is issuing debt in the financing).

Sponsors can communicate updates through the Syndicator

You are not required to share any information or communicate with your syndicate. But many sponsors choose to post.