Investing with ArborCrowd
1. Q: How does ArborCrowd work?
A: We provide Accredited Investors with access to real estate investment opportunities that are managed by tenured commercial real estate professionals. After creating an account, prospective investors can browse open investment opportunities, learn about the offerings and if they choose to invest, can even sign transaction documents online.
2. Q: How do I create an account for ArborCrowd?
A: Prospective investors can create a personal account by providing a name, phone number and email address.
3. Q: How do I delete an ArborCrowd account?
A: Investors can close an account by contacting an investor relations manager at info@ArborCrowd.com or (844) 365–1200.
4. Q: How does the investment process work?
A: If you have signed up for an ArborCrowd account, you will receive notification from us when a new investment opportunity is available. The notification will provide you with a link to the opportunity’s detail page where you can access deal-specific investment information — including the minimum investment sought — for the specific opportunity. If you determine that you would like to invest in the specific opportunity, you may submit an offer online.
5. Q: What happens once I have submitted an offer to invest?
A: Your offer is a commitment to invest in the specific opportunity. Once we verify that you are an Accredited Investor, we hold those commitments until the minimum investment amount being raised has been committed. Once the minimum is reached, the closing process will commence. ArborCrowd then collects all commitments that have been received and pools them to ultimately invest in the real estate through a single vehicle, often alongside other third parties. On many occasions, a specific opportunity will be oversubscribed — which means that there is so much interest that we simply cannot accommodate all the offers we receive or cannot accommodate the full offer amount that a prospective investor has offered. Therefore, your investment is not final until the minimum investment target has been reached, all of your legal documents have been signed and your offer has been accepted. Once the closing is complete, investors will receive a copy of the final closing documents. If your offer was not accepted, please don’t hesitate to call an investor relations manager at info@ArborCrowd.com or (844)-365-1200.
6. Q: How does a prospective investor transfer investment funds to ArborCrowd?
A: The investor can authorize an automatic electronic fund transfer or mail in a check.
7. Q: How long does it take to invest in an opportunity on ArborCrowd?
A: The investment process typically takes anywhere from three business days to one week, although it could take less or more time. Note that once the investment process is completed, the actual acceptance of your offer, if it occurs, and the closing of the transaction, may not occur for additional four to seven weeks.
8. Q: How do investors get a return on their investments?
A: Investors receive a return on their investments when the transaction sponsor distributes money. Distributions are typically made to investors when there is excess cash flow at the property after payment of all expenses, debt service and reserves and when the investment property is sold. The projected returns are different for each specific opportunity. Returns are projections and are not guaranteed.
9. Q: Am I allowed to resell or transfer my investments?
A: No. While the transaction sponsor provides targeted holding periods for each specific investment opportunity, there is no guarantee that the investment will not be held for a shorter or longer period. Prior to investing, you should understand that you may be holding your investment for an extended period of time
10. Q: Is the ArborCrowd platform secure?
11. Q: What is an Accredited Investor?
A: Accredited Investors are defined by the SEC as individuals with income exceeding $200,000 annually (or $300,000 together with a spouse) in each of the prior two years, and who reasonably expect the same for the current year OR that have a net worth of over $1 million (either alone or together with a spouse), excluding the value of the individual’s primary residence.
12. Q: I’m not an Accredited Investor. Can I still invest?
A. Unfortunately, not at this time. Current investment opportunities on ArborCrowd are offered pursuant to an exemption from registration known as Rule 506(c) under Regulation D of the Securities Act of 1933. This exemption only allows us to generally solicit Accredited Investors.
13. Q: How do investors prove Accredited Investor status?
A: The verification step occurs once ArborCrowd has received a prospective investor’s offering submission. There are two ways to prove accredited investor status:
1. Professional Letter Method (quickest method): A letter written by the prospective investor’s licensed attorney or certified public accountant (on personal letterhead), verifying that “reasonable steps” were taken to verify your status as an accredited investor within the past three months. ArborCrowd provides the form letter for you to share with your attorney or CPA during the investing process.
2. Certification by a third party verification service (2+ business days): Prospective investors can use VerifyInvestor, an online service that will verify your Accredited Investor status. For convenience, VerifyInvestor can be accessed directly from the ArborCrowd Transaction Center. VerifyInvestor will look at the prior two years’ W-2s, K-1s or 1099s to confirm your income or bank statements, securities holdings, certificates of deposit, tax assessments and appraisal reports (all no more than 90 days old) to confirm your net worth. Verification through VerifyInvestor is provided at no cost to the investor.
14. Q: I received a notification from VerifyInvestor that I am not an Accredited Investor. What should I do?
A: If you believe that you are an Accredited Investor, you can contact VerifyInvestor directly to understand the issue. Alternatively, you can pursue the Professional Letter Method of verification outlined in FAQ #13.
15. Q: Who has access to my financial information after it is submitted to VerifyInvestor?
A: If you verify Accredited Investor status using VerifyInvestor, ArborCrowd will only see that you are a verified Accredited Investor, and will have no knowledge of or access to your confidential financial information. VerifyInvestor does not sell personally identifiable information to third parties. For more information, see VerifyInvestor’s FAQ section.