Real Estate Crowdfunding
General Investor Questions
What is UltraCrowd.com and how does it work?
UltraCrowd.com is an online marketplace for real estate investing. We connect our members (investors) who want to invest in commercial real estate with investment opportunities being offered by real estate companies, sponsors, and managers that want to team up with investors to acquire a property.
Through the UltraCrowd.com platform, accredited and institutional investors have the opportunity to invest in real estate opportunities online through a private, secure website. Investors can browse investments, review due diligence materials and sign legal documents securely online. Once invested, investors have access to an investor dashboard, giving them 24/7 access to see how their money is working for them.
Is UltraCrowd.com website secure?
Yes. We use Secure Sockets Layer (SSL) to ensure the security of all of our members and all of our data. SSL is the standard security technology for establishing an encrypted link between a web server and a browser. This link ensures that all data, passed between the web server and browsers, remains private and integral. SSL is the industry standard and is used by millions of websites to protect online transactions with their customers.
Who invests through UltraCrowd.com?
UltraCrowd.com investors include high net worth individual investors and institutional investors including family offices, registered investment advisors, private equity firms, hedge funds, banks, and asset managers.
Who is eligible to invest through UltraCrowd.com?
At this time only Accredited Investors can invest in private placements on the UltraCrowd.com platform. 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 that 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.
What are the benefits of using UltraCrowd.com?
UltraCrowd.com makes it easy for accredited and institutional investors to invest in real estate through our simple, innovative platform.
We provide access to pre-vetted investment opportunities in the marketplace. We spend limitless hours sourcing real estate investments so you don’t have to. We also allow you to invest in commercial real estate with $50,000 or $100,000 minimums. You can screen investments, sign legal documents, and have access to all your documents in one place on your Investor Dashboard Online.
Summary of Benefits:
- Direct access to previously inaccessible private opportunities
- Vetted deal flow of curated offerings
- Transparency and due diligence
- Portfolio diversification in high-potential deals
- Security, trust & support on our state-of-the-art platform
What types of investments does UltraCrowd.com offer?
Currently the offerings on our site are Equity Investments. In this investment type, we focus on equity investments with existing cash flow, like apartment buildings, office buildings, retail shopping centers, and self-storage facilities.
With this type of investment, investors pool their money to purchase a piece of a specific property or a pool of properties. The investment is acquired and managed by a professional real estate investment company, also known as a “sponsor.” Only vetted sponsors with successful track records of acquiring and managing real estate are considered. Investors are typically entitled to a share of the cash flow from rents as well as a share of the proceeds when the property is eventually sold. The hold period for an investment like this may range from 1-10 years.
How does an investment opportunity get listed on UltraCrowd.com?
Real estate companies, individuals, and the UltraCrowd team submit their investment opportunities to Ultra Crowd underwriting for analysis and approval.
The UltraCrowd team reviews the property materials and determines whether the company and the investment is a good fit for our members. We go to great lengths to fully understand the variables of each transaction including return structure, market statistics, quality of the property and the track record, reputation and quality of the real estate investment company we work with.
This process also includes background, criminal and credit checks to mitigate the risk of fraud. Finally, we always tour the property as a final step before it is listed. We reject many equity transactions that are proposed to us. Top of mind is one of our core values – Investor Protection.
At UltraCrowd.com, we look for transactions that provide cash flow to investors as quickly as possible. Some properties may have some level of vacancy or have the ability for our operating partner to add value and increase cash flow over the life of the investment. We do not currently fund ground-up development, as we believe one of the benefits of real estate investing is passive income and development projects typically take 18-36 months to generate income. We do fund apartment buildings, self-storage facilities, hotels, mobile home parks, office and multi-tenant industrial buildings and retail shopping centers.
Are the investments secure?
Although no investment is guaranteed, one benefit of investing with UltraCrowd.com is that you are investing in tangible physical assets located in the United States. Your investment is in an actual property as opposed to a stock or bond or other non-physical asset.
Are these investments risky?
Yes. Similar to investing in the stock market, there is no guarantee when you are investing in real estate. The real estate market has economic cycles and it is difficult to know how and when the economy will change. It is our job to study and continuously research trends that indicate the very best investments for that particular time.
Does UltraCrowd.com do background or credit checks when new investors register with the site?
Yes. We run background and anti-money laundering checks on all who invest in deals on our site. Additionally, on some offerings where advertising may have been used, some additional verification of an investor’s status as an accredited investor may be required.
Is there an investment minimum?
Yes. The minimum amount is different for each investment. It can range from $50,000 to $100,000 per investment. Please review offering documents for each investment.
What are the terms of each offering?
The terms of each offering are specific to that offering. Investors should carefully review the details of each opportunity, all documentation associated with the offering and perform due diligence necessary to understand the terms and risks associated with their investment. Each investor is responsible for their decision to invest in a specific property.
Are there fees for investors?
Joining UltraCrowd.com and browsing the marketplace is free and requires no obligation. For those who choose to invest, there are fees associated with each investment. The fees depend on the type of offering and the nature of the transaction. In addition to administrative and legal expenses, the fees cover the ongoing reporting and communications for the investments. We are big believers in transparency, therefore you can find the specific fee structure for each deal when you browse through our investment opportunities.
How does the investment process work?
An investment is not final until all legal documents are signed and funding has been contributed and cleared. When an investor makes their investment, the money is held securely at a US bank. Once the fundraising target is met and the real estate transaction is completed, the money is transferred for the sole purpose of the specific property that is being invested in.
The investment process can generally be described as follows:
- Create an account and browse opportunities.
- Find a potential investment opportunity.
- Review all terms of the investment. You will have an opportunity to review the investment documents again later during the investment process.
Once comfortable with the investment terms, click the Invest button on the offering page. This will initiate the investment process, whereby you will be asked to:
- Enter your investment amount
- E-sign the required legal agreements
- Select your accreditation verification method
Once your accreditation is confirmed, you will receive information on funding your investment commitment. Your funds will be transferred to an account (escrow or trust account) for holding until the offering reaches its target goal and closes.
If you find that you are more comfortable walking through the investment with us over the phone, please contact us to facilitate the transaction offline.
Once the fundraising round closes, you will receive confirmation of success and counter-signed legal agreements. In the case of an unsuccessful round or a canceled investment by yourself, the proposed transaction will be terminated and your funds will be returned to your bank account.
How do investors transfer funds to UltraCrowd.com?
Standard wire transfers can be made from an investor’s bank account directly to the trust account for a specific property. For each investment opportunity there will be specific account numbers that will be provided to the investor so that funds are properly received and properly attributed to the appropriate account.
What happens if I invest and the project doesn’t reach the capital raise target?
Each offering has both a minimum and maximum funding amount. As long as a transaction receives commitments greater than the minimum funding amount the transaction will proceed. In the event that an offering fails to generate sufficient interest to meet the minimum amount, all investor commitments will be rescinded and a full refunded issued. At no time will your money be forfeited if a transaction does not close. All commitments received remain in a separate trust or escrow account.
How are legal documents handled on UltraCrowd.com?
All legal documents can be sent and signed electronically through our website. This allows for more efficient and seamless transfer of documents between you and UltraCrowd.com, while maintaining the authenticity and security of your information. Investments are finalized once proper legal documentation is accepted, funds are received, and you are provided with completed counterpart signatures.
Can I use an SDIRA or other type of IRA for my investment and cash flow distributions?
At this time, we can process investments made through a self-directed IRA account, but it will depend on your custodian’s processes/procedures. Our two requirements are that the custodian be able to process documents via electronic signatures, and that it be able to process contributions and distributions via ACH transfer payments. Unfortunately, some custodians have problems meeting these conditions. Inquire of your current custodian whether they can work with these requirements, and if not, we can refer you to other providers who can meet these guidelines.
How will investors be updated about their investment status?
Investors will be able to view real time updates of their investments when they login to the site and view their investor dashboard. This is their hub of information, and will provide comprehensive metrics about their distributions to date, upcoming milestones, and overall return on investment. Additional emails are sent out when distributions are sent to your bank account.
Once invested, how do investors get regular updates about their investments?
UltraCrowd.com will work with the real estate company to provide timely updates shared with all investors at least quarterly. Updates will be provided via email and via the investor dashboard. In addition, investors will receive tax documents every year that they have a distribution from a real estate investment.
How will my investment cash flow allocations be distributed?
Investors who invest in debt typically receive interest payments on a monthly basis, while investors who invest in equity typically receive quarterly distributions.
The Sponsor of each property determines how they chose to send you the distributions. Usually we send cash flow income to the same bank account that the investor provided for their original investment. We can, however, accommodate changing a distribution bank account by request. We require information that will allow for monthly or quarterly standard ACH transfers.
Distributions are never guaranteed in amount or timing. You should carefully read the offering documents for the specific deal you are interested in. In that way you will fully understand how projected distributions will be calculated and what risks are involved.
Is my investment liquid?
No. The real estate investments found on UltraCrowd.com are private transactions in physical properties around the United States. 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 specific to the investment and regulated by the Securities Act of 1933. Since the resale restrictions on UltraCrowd.com can be very limiting, you should not invest with the expectation of reselling your investment.
When will I get my investment back?
Different properties have different expected hold periods. A hold period is the anticipated time investors will be involved until the underlying property is re-sold or the loan on it is paid off. It is important to read the offering documents for a better understanding of the hold period for each investment.
Is there an exit strategy if I need to cash out an investment?
No. Commercial real estate investments by their very nature have a longer time horizon than liquid stocks or bonds. Each investment will have a timeline to realize the results of the investment and may vary from 1 year to 10 plus years. Please read and understand each investment offering carefully before making an investment.
What happens if UltraCrowd.com goes out of business?
Nothing. You are investing directly with investment firms, sponsors, and managers on each property. Should UltraCrowd.com decide to close your investments will not be affected.
After I invest in an offering, who is responsible for managing the investment?
The Sponsor will manage the overall project but will be required to hire a professional manager to manage the day-to-day property operations. In certain cases, the Sponsor will manage the property directly.
What types of properties are available through equity investments?
UltraCrowd.com offers access to a variety of property types including, but not limited to, multi-family, office, industrial, self-storage, retail, medical office, and hospitality.
How are equity investments structured?
Investors are typically purchasing shares/units in a Limited Liability Company (LLC) that in turn invests in an LLC or Limited Partnership (“LP”) that holds title to the real property.
When I invest in equity investments on UltraCrowd.com, what do I own?
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 and other investors, a share of a joint venture entity that owns a specific investment property like an apartment building. An LLC gives you liability protection, shielding your personal assets from the investment.
Why do investors invest in an LLC instead of directly into the company that holds title to the real property?
There are several reasons you are investing in an LLC. It gives you, the investor, added protection as a passive investor/partner. It minimizes overhead for the sponsors who work with UltraCrowd.com because they only provide reporting to one entity. In addition it allows us to access more investment opportunities for investors because the sponsors prefer this method of operation. It allows for streamlined reporting, distributions, and tax documentation through the UltraCrowd.com platform.
Who makes decisions in an LLC?
Decisions in an LLC are governed by a document called an “operating agreement”. While every operating agreement is slightly different, they usually include a manager (who may also be a member) and limited members. The manager typically makes all of the day-to-day decisions and the limited members act as passive investors on the transaction. The manager can determine how much cash to distribute to the limited members versus how much to hold in reserve and assess possible sales for the property. There are certain activities that might mandate a vote by the limited members and the limited members can typically take action if the managing member defaults on the terms of the agreement or is grossly negligent.
How often should distributions be expected?
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 the investment. No distributions are guaranteed.
Obviously every property is chosen for its cash flow ability however, just like any business, there may be unforeseen circumstances and the property may need repairs or restoration to bring up the rents or desirability of the property. Therefore, it’s expected that there may not be any cash distributions immediately. Every property’s circumstance and strategy is different. You must read all materials provided on each property carefully.
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?
UltraCrowd.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 UltraCrowd.com, please check the offering materials for each investment to fully understand your liabilities as an investor.
What are the tax implications of investing in Equity opportunities with UltraCrowd.com?
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 of 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 (the 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 (the LLCs) 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.
UltraCrowd, Inc 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.
Can I resell my securities?
Investors participating in UltraCrowd offerings are purchasing 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.
Can I trade shares, or transfer ownership, after making an investment?
You may be able to transfer ownership to another investor, though this is never guaranteed and handled on a case-by-case basis.
What kind of reporting will I see on my investments?
You can track your investments and see information regarding both individual investment returns and portfolio returns on the Ultracrowd.com platform. The sponsor or lender of each offering is required to submit quarterly financial reporting and other updates as needed. We will present this information to you on your user dashboard after we receive it, typically either on a monthly or quarterly basis.
Invest in Ultra Capital Fund
What is Ultra Capital Fund, LLC?
Ultra Capital Fund, LLC is a limited liability company formed to invest in private money loans. The focus is to provide rehab loans for real estate rehabbers in Southern California and surrounding areas.
Ultra Capital Fund, LLC is a registered, non-traded entity. That means that it is registered with the Securities and Exchange Commission, but is not traded on a stock exchange.
What types of properties or investments go into Ultra Capital Fund, LLC?
Ultra Capital Fund, LLC can invest in a variety of property types, including but not limited to, single family residences, multifamily, office, industrial, self-storage, and retail real estate opportunities. The main focus however is to provide rehab loans in the Southern California market.
Who can invest in Ultra Capital Fund, LLC?
Ultra Capital Fund, LLC is available to accredited investors only.
What is the minimum amount I can invest in Ultra Capital Fund, LLC?
The initial minimum investment is $100,000. The Manager has made exceptions at $50,000 in the past.
How liquid is an investment in Ultra Capital Fund, LLC?
Redemptions from the fund are generally allowed on a quarterly basis, subject to the redemptions rights and limitations outlined in the Offering Circular. Typically, your capital is locked up for a 2-year period.
How is investing in Ultra Capital Fund, LLC different from other investment opportunities offered on the UltraCrowd.com Platform?
The UltraCrowd.com Platform currently offers individual real property-related investments as private placements to accredited investors only. The UltraCrowd.com Platform allows accredited investors to review due diligence materials for individual transactions and invest in one transaction at a time.
Investing in Ultra Capital Fund, LLC is different since investment decisions are made by its Manager, and you are investing in a diversified mortgage portfolio and not a specific transaction or property. Additionally, Ultra Capital Fund, LLC may offer a lower investment minimum and shorter lock-up period than some of the transactions offered on the UltraCrowd.com Platform.
The Manager of Ultra Capital Fund, LLC charges a 1.5% asset management fee for managing Ultra Capital Fund, LLC, whereas the other investment opportunities offered through the UltraCrowd.com Platform may charge fees that are higher or lower.
Finally, Ultra Capital Fund, LLC is set up as a “blind pool” mortgage fund, which means that it is not committed to acquiring/lending on any particular investments with the net proceeds of its offering. Investing in Ultra Capital Fund, LLC can lead to greater diversification because Ultra Capital Fund, LLC intends to invest its assets in multiple real estate lending opportunities. However, unlike other investments on the UltraCrowd.com Platform, a purchaser of common shares/units in Ultra Capital Fund, LLC may not know what investments Ultra Capital Fund, LLC will make with its assets at the time the investor purchases common shares/units. It’s basically the same concept as investing in Mutual Funds. You know what the fund objective is but you don’t know exactly what they are investing in.
Who is on the Manager team of Ultra Capital Fund, LLC?
Ultra Capital Fund, LLC is managed by Ultra Capital Group, Corp. The CEO, Ivan Lomeli, and his team have over 60+ years of combined experience in the real estate and mortgage industry, closing over $3 Billion in real estate and mortgage transactions. Ultra Capital Fund, LLC expects to benefit from the knowledge, industry contacts, experience and judgment that these professionals have accumulated over numerous real estate cycles. The fund’s geographic focus, Southern California, is where the team members reside and remains one of the strongest real estate markets in the US. They are experts in this market and every transaction will get physically inspected and vetted by someone on the team.
What services will the Manager perform?
The Manager runs, manages, and maintains all aspects of the fund. The Manager is responsible for all offering services, investment analysis, underwriting, due diligence, asset management, accounting and all other administrative services. In addition, the Manager is responsible for the management of shareholder services, financing services, and disposition services. The Ultra Manager’s objective is to protect investor’s capital, target high returns, and keep expenses to a minimum.