What is West Realty Group?
West Realty Group is a syndicating portal for savvy Southern California investors. West Realty Group offers an online investment platform for commercial real estate, giving investors the ability to:
- Browse investment offerings based on investment preferences including location, asset type, risk and return profile;
- Transact entirely online, including digital legal documentation, funds transfer, and ownership recordation;
- Manage and track investments easily through an online portfolio; receive automated distributions and/or interest payments, and regular financial reporting.
How do I get started as an investor on West Realty Group?
You can get started as an investor on West Realty Group by joining the site.
The investment and checkout process is conducted online. You will be prompted to provide or verify any required information, as well as to make any required acknowledgments electronically.
What is an accredited investor?
An accredited investor is a term used by the U.S. Securities and Exchange Commission (SEC) under Rule 501 of Regulation D. In order to qualify as accredited, an investor must accomplish at least one of the following:
- Earn an individual income of more than $200,000 per year, or a joint spousal income of more than $300,000 per year, in each of the last two years and expect to reasonably maintain the same level of income.
- Have a net worth exceeding $1 million, either individually or jointly with his or her spouse.
- Be a bank, insurance company, registered investment company, 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.
How do I show I am an accredited investor?
Prior to getting approval to invest in a private offering on West Realty Group, you will be required to show that you qualify as an accredited investor.
There are many methods to qualify as an accredited investor, including providing supporting documentation of your assets or income, providing a letter from a licensed professional certifying your status as an accredited investor, or allowing third-party vendors to verify your status as an accredited investor.
In some instances, a detailed bio stating your source of wealth, employment history, and income may also suffice.
For trusts, LLCs and other entities, we are required to collect the relevant legal agreements to ensure you are legally permitted to direct investments.
To upload this information in advance, please go to the top right hand corner of your screen under your name, and select “settings.” This should bring you to the “Investment Accounts” section. Click on the appropriate account for which you want to upload your letter, W2, bank account statement, trust document, or operating agreement. Scroll down to “Accreditation Status” and click “edit”. At the bottom of this page you can click “choose file” and upload your form here.
For additional information about individual and entity accreditation requirements, please see the SEC website to review their guidelines (http://www.investor.gov/news-alerts/investor-bulletins/investor-bulletin-accredited-investors) or reach out to Lee@WestRealtyGroup.com.
What are the terms of a West Realty Group investment?
The terms of each investment on West Realty Group are specific to that listing. Prospective investors should review in detail the offering documents provided for each investment opportunity.
Does West Realty Group have a minimum investment?
Minimums may vary for individual private placements.
How will I be updated on the progress of my investment?
The West Realty Group platform provides direct communication with investors, including the posting of ongoing reporting and updates on the status of a project, as well as the delivery of tax filing and other relevant materials directly to investors.
When can I expect a return on my investment and how will it be distributed?
Projected returns and distributions, as well as a timetable for milestones and a distribution schedule, are specific to each listing and, when available, are noted in the offering documents for that investment.
What is the difference between “current” and “total” return?
In many cases, a portion of the return may get paid current (quarterly) and another portion might accrue until the end of the life of the investment, when it is scheduled to be paid out in a lump sum along with the principal. The current return represents the cash distributed to investors throughout the life of the Note, on a quarterly basis.
What are the tax implications of investing on West Realty Group?
Tax implications may vary according to investment. Generally, investors can expect to receive a 1099 for a majority of investments on the platform. However, investors should consult their independent tax advisor for specific questions regarding tax treatment.
What documents will I receive as an investor?
After an investment has closed, investors can track its performance in their West Realty Group Portfolio, Within the portfolio, investors will find all the relevant deal documents, as well as receive updates, distributions, and tax documents.
As long as you are an investor, we will send you a Form 1099 or a Form K-1, as appropriate, by approximately mid-March of the following tax year.
What is a K-1?
Similar to a 1099, a Form K-1 is an accounting of the tax income for the year. Each investor receives one per investment. Form K-1s are most commonly used in partnerships and in real estate ownership.
What happens if there is more interest in investment in a project than funding needed?
Investments are usually closed on a first-come, first-served basis; although West Realty Group reserves the right to reject any particular investment. Once the total listing amount is reached, the listing is closed.
Can I invest through my IRA?
Yes, We accept IRA investments in certain projects.
May I sell my Position?
Yes, all invested positions can be sold subject to the terms and conditions within each offering
Where are your projects located?
All West Realty Group investments are located in Los Angeles, or within a two-hour drive of Los Angeles.
Do you fund international projects?
We do not list international investments at this time.
Do you allow international investors?
International investors may currently invest through US-based entities. Please contact us for more information.
What is your investment strategy?
While each West Realty Group investment has a unique investment strategy, our broader investment goal is to identify high-quality opportunities with superior risk-adjusted returns.
How often should investors expect to receive distributions?
Investors are expected to receive distributions quarterly; however, distributions may be more or less frequent depending on market conditions.
Why do you need my Social Security number and date of birth?
Investments sold through the West Realty Group platform are real investments. All income must be reported to the Internal Revenue Service. As a result, we are required to obtain your social security number and date of birth.
An alternative investment refers to any investment which does not qualify as “traditional”. Traditional investments are widely considered to be stocks, bonds and cash.
Active income is income earned as a direct result of a specific effort. In other words, input is correlated to output.
An increase in value is referred to as “appreciation”.
As opposed to an interest-only loan in which each repayment installment consists only of interest payments with a single lump-sum principal repayment at the end of the loan period, each repayment installment of an amortizing loan consists of both principal and interest.
An accredited investor is a term used by the U.S. Securities and Exchange Commission (SEC) under Rule 501 of Regulation D.
A basis point (bps) is a unit that is equal to 1/100th of 1%, in other words one basis point is equal to 0.01%, similarly a 1% change is equal to a 100 basis point change.
Cash-on-cash return is one of the most widely used metrics in commercial real estate. As the name implies, this metric is calculated by dividing annual before tax cash-flow by the total cash invested in a project.
Capital is any financial asset or the value of an asset.
Funding a product, idea, or venture using small amounts of money raised from the “crowd.”
Capitalization (Cap) Rate
The capitalization or cap rate measures a property’s yield in a one-year time frame, making it easy to compare one property’s cash flow to another on an equal basis – without taking into account any debt on the asset.
Common Equity means that investors have one-to-one (or equal) participation in each dollar invested and any potential profits or losses.
The Fundrise Dividend Reinvestment Program “DRIP” allows investors to automatically reinvest the dividends they earn from their investments directly back into offerings on the platform. Investors have the ability to choose the offerings into which they would like the dividends reinvested.
Development is the process of building or adding to existing structures to increase the value of a property.
Payments made to investors periodically, typically over the course a calendar year, either from profits or interest payments.
An amount of money (obligation) owed by one party (the debtor) to another party (the creditor).
As it relates to real estate, equity can be measured as the amount of capital a sponsor (property owner/developer) puts into a property.
Free Cash Flow (FCF)
Free cash flow is a measure of a property’s ability to generate cash after setting aside reserves for capital expenditures such as future development, tenant improvements, and leasing commissions.
A tangible object of worth that is owned by a business or individual.
An investment property is a real estate asset purchased with the sole purpose of earning income. Income from an investment property can be generated through leasing space within an asset or an eventual sale of the asset.
While the Securities and Exchange Commission regulates public securities on a national level, each state also has its own regulatory entity serving a similar function. Since the passage of the JOBS Act, advocates of equity crowdfunding have moved to legalize intrastate – or in state – crowdfunding.
Internal Rate of Return (IRR)
In real estate, the Internal Rate of Return (IRR) is a metric used to evaluate the profitability of an investment over its lifetime and is represented as the average annual return percentage. The IRR of an investment can be calculated forward-looking to estimate potential future returns or backward looking to measure the performance of a completed investment.
Jumpstart Our Business Startups (JOBS) Act
The JOBS Act was a law passed in 2012 in the United States that eased regulations related to funding small businesses. Intended to increase American job creation and foster economic growth, the JOBS Act aims to provide easier access to public capital markets and small, growing companies.
The liquidity premium represents the incrementally higher price an investor is willing to pay for a more liquid asset or security, all other factors held equal.
Liquidity refers to the ease with which an asset can be purchased or sold. Marketable securities that are traded in high volume tend to be the most liquid, or easy to trade without creating wild fluctuations in price.
Linear income is earned in direct relation to the number of hours you work.
Loan-to-Value Ratio (LTV)
A risk assessment ratio that lenders perform when considering a real estate loan.
Loan-to-Cost Ratio (LTC)
The Loan-to-Cost Ratio is the ratio of a loan used to help finance a project compared to the total cost.
Mezzanine Debt vs. Preferred Equity
Mezzanine Debt is generally a loan that is secured by a property and senior to any equity, but junior to the senior loan on the property. Preferred Equity, on the other hand, is an equity investment in the property-owning entity. It is not secured by the property but rather by an interest in the entity investing in (or owning) the property.
Net Asset Value (NAV)
The Net Asset Value (NAV) per share represents the estimated value of a single share based on a variety of factors.
Net Operating Income (NOI)
In real estate, the net operating income, or NOI, represents the annual revenue (or income) generated by an investment property after annual operating expenses.
Passive income (also known as residual or recurring income) is commonly used to refer to income that continues to be earned even after the work is done.
Private Equity Fund
A private equity (PE) fund is a collective investment model where money from separate investors is pooled together into a single fund and then used to make investments, most often in various illiquid equity and debt assets.
A Preferred Return is paid to investors before a sponsor receives any share of the cash flow.
A financial model often used in real estate to predict future cash flows and total investment returns.
Typically in a Preferred Equity investment, all cash flow or profits are paid back to the preferred investors (after all debt has been repaid) until they receive the agreed upon “preferred return.”
Project Payment Dependent Notes
A Project Payment Dependent Note is a special, limited obligation of Fundrise Investments, LLC sold to investors, the proceeds of which are used to fund corresponding project investments.
Real Estate Investment Trust (REIT)
A REIT (which is pronounced “reet” and stands for Real Estate Investment Trust) is a company which makes investments in and owns income-generating real estate properties.
Also known as residual or passive income, recurring income is earned by creating or acquiring an asset that continues to pay of profits regardless of if there is still active work being done to the asset.
The term residual income (also known as passive or recurring income) is commonly used to refer to income that continues to be earned even after the work is done.
Regulation D permits raises of unlimited amounts from accredited investors without registering a public sale through the SEC, as it’s assumed that accredited investors are financially able to bear the burden of investment decisions without a review by the SEC.
Regulation A+ is the SEC’s proposed revision of the current Regulation A, which was mandated by the JOBS Act in 2012.
Regulation A allows unaccredited investors to purchase small offerings of securities that do not exceed $5 million in a 12-month period.
In the event of back taxes or unpaid liens, a borrower who pays off those debts may reclaim their property, preventing foreclosure or the auctioning of their property.
Real estate includes a parcel of land and any of its permanent structures (buildings, parking lots, etc.).
Secured vs Unsecured Position
A secured position in the Capital Stack retains the right to foreclose on a property in the event of a default, or non-performance. Unsecured creditors do not have the right to foreclose on the property, and therefore have less collateral backing their investment claim.
An individual or firm in charge of finding, acquiring, and managing a piece of real estate.
Senior debt generally secured at the “base” of the capital stack. Because it sits at the base of the capital stack, it must be repaid first.
Title III Regulation Crowdfunding
Outlined in the 2012 JOBS Act, Title III instructed the SEC to create an exemption from registration that, when implemented, will enable issuers to engage in crowdfunding equity offerings to the general investing public.
In real estate, the term refers to the lifespan of a given asset or liability. At the end of the term, the loan is or investment is repaid.
The Capital Stack
The Capital Stack orders the seniority of claims to the collateral and cash waterfall of an entity.
Tenancy / Occupancy
Occupancy is generally referred to as a percentage of the total square feet or units leased – it is a building’s revenue source.
Underwriting is the process by which real estate investments are evaluated to determine their viability.
An investor who does not meet the wealth requirements of an accredited investor set forth by the SEC.
In the context of commercial real estate, yield refers to the annual cash return on the investment, expressed as a percentage of the investment’s initial cost, or less frequently, its estimated current value.