HomeUnion Fix-and-Flip Fund
Question and Answer
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What is HomeUnion Investments?
HomeUnion Investments is a website where you can browse real estate investment opportunities.HomeUnion Investments is a website where you can browse real estate investment opportunities.
Is this like Kickstarter?
No. With Kickstarter, you make donations to businesses. On our platform, you are making real investments, and could collect returns on those investments if we are successful.
What kind of Crowdfunding is this?
This is Title II Crowdfunding, for offerings under SEC Rule 506(c), where only accredited investors may invest.
Aren’t there other kinds of Crowdfunding as well?
Yes. The JOBS Act of 2012 created three kinds of offerings, all of which are sometimes referred to as Crowdfunding. The other two are:
- Offerings under SEC Regulation A, often referred to as “Title IV Crowdfunding” or “Regulation A+.”
- Offerings under section 4(a)(6) of the Securities Act of 1933, often referred to as “Title III Crowdfunding” or “Regulation Crowdfunding” or “Regulation CF.”
Do you plan to offer those in the future?
So you’re saying that for now, only accredited investors may participate in the opportunities on your site?
What is an accredited investor?
In general, a person is an “accredited investor” if she (i) earns at least $200,000 per year, or $300,000 per year with her husband; or (ii) has a net worth of at least $1 million, excluding her principal residence. For the SEC’s full definition, please visit http://www.sec.gov/answers/accred.htm.
What if I’m not an accredited investor?
You can still sign up and see projects, you just can’t invest yet.
Can non-U.S. investors participate?
Generally yes, if they are accredited.
How do I get started?
To get started, register and create a password. Then you can start seeing and using all the benefits of the site.
Are there fees to join?
No, it’s absolutely free.
Is the information I give you secure?
Yes. We use SSL (Secure Sockets Layer) for security by making an encrypted link between your browser and our associated servers. SSL is an industry standard for protecting the integrity of online transactions.
Why do you ask for my social security number and date of birth?
We ask for this information to comply with our legal requirements. We don’t share that information with anyone.
What kinds of projects will I see on your site?
For now, you will see funds that invest in single-family homes matching certain criteria that we develop. For example, one fund invests in single-family homes across multiple markets for the purpose of fixing and flipping them. A future fund may invest in the major metros of Atlanta, Chicago, and Dallas.
Why should I consider an investment in real estate?
Allocating a portion of your investment portfolio to our funds could provide you with a reasonably predictable and stable level of current income from the investment; the opportunity for capital appreciation; and diversification of your portfolio, by investing in an asset class that historically has outperformed the stock market. But we are not investment advisers and do not offer investment advice.
How much should I invest?
That’s up to you and your investment advisers. Generally speaking, most experts recommend a balanced portfolio that includes both low-risk and high-risk investments, with the right mix based on lots of factors including your age and your own tolerance for market fluctuations. As you consider how much to invest, you should definitely think of most of the projects on our site as high-risk investments.
Are there minimum investments?
We will stipulate a minimum investment in each fund. Right now, the minimum is $10,000 but this could change.
After my initial investment can I invest more?
Yes, for as long as the investment period of a fund remains open.
Are these risky investments?
You should view these as risky investments, riskier than an investment in a stock market index fund, for example. The same is true for any direct investment in real estate. You could lose some or all of your money in any of these investments.
If I invest in a project, do I become personally liable for anything?
No, you are only personally liable only to make your investment. We have legal structures in place to protect investors from personal liability.
Describe the investment process.
First, review our active projects. When you decide to invest, click “Ready to Invest” and we will guide you through the process. We’ll have you review important information about the project, we’ll ask you to sign our Investment Agreement, and then we will ask you to pay for your investment.
Where does my money go when I invest?
Your money is held safely in an escrow account by a third party until the project is fully subscribed, i.e., until the full amount is invested. Then, it is distributed to the sponsor of the project. If the project is not fully subscribed, your money will be returned to you without any deduction.
Will I own actual real estate if I invest?
You won’t own real estate directly in your own name, the way you own your home. Instead, you’ll own an indirect interest in real estate. Usually, you will own an interest in a limited liability company (LLC) that owns real estate.
What will I receive for my investment?
Our goal is to produce a regular flow of income as well as capital appreciation. We’ll describe the investment goals of each fund as clearly as possible.
When will I start to receive a return on my investment?
There will be two distributions once the fund closes - one at 6 months, and one at the end of the year.
When will I get my money back?
We currently intend to liquidate the fund at the end of one year from closing.
Can I get my money back sooner?
There is no early redemption for this fund. Future funds may allow a portion of your shares to be redeemed at a discount to their actual value, subject to certain restrictions.
Can I reinvest my distributions automatically?
Not yet. We hope to add this functionality in the future.
The real estate market crashed in 2007-8. Could that happen again?
Yes, it's always a possibility. Real estate can be a volatile investment, and you should be prepared for market fluctuations.
How should I choose among the funds?
We might provide some general educational material on the website. At this point, however, we’re not allowed to provide investment advice. If you’re not sure, you should consult with your own financial and investment advisers.
How do I pay for my investment?
Typically, you transfer funds directly from your bank account. There are no fees for our service.
Can I invest through my IRA?
Usually, yes. For tax reasons, we are required to cap how much IRA money any one project can accept.
How are the returns estimated for each fund?
We review all materials available on the project and use industry-leading metrics to estimate returns. Keep in mind that these are only estimates. It is very hard to predict what is going to happen two, five,or seven years in the future. For any given fund, our estimate is likely to be at slightly off target, and possibly far off target, due to factors beyond our control.
Will I be able to sell my shares?
No. There are three reasons why you cannot sell your shares: 1) there is no active buying market; 2) many projects restrict transferring of interests; and 3) any transfer of your interest must comply with Federal and State securities laws.
Where can I learn more about the funds?
When you click on a fund, you’ll see a lot of information instantly. For more information, after you click on the project, click on Investor Information. There, you will see even more in-depth information about the fund.
Does the government review these investments?
No. No Federal or State agency reviews these investments. You and your advisers have to make the decision whether to invest.
Can I track the performance of my investments?
Yes, we give you a tool, called a dashboard, to keep track of all the investments you make on our site.
What tax documents can I expect to receive?
You will receive an IRS Form K-1 each year. You or your tax preparer will transfer the information from Form K-1 onto your personal tax return.