Questions?
While our vision is to make real estate investing simple, we understand that making a decision to invest your capital is never easy. Browse our FAQ's below and if you cannot find the answers to your questions, please reach out to us at invest@avestorinc.com.
For answers to the hard questions that investors sometimes hesitate to ask us, the No Spin section answers them.
General
What is Avestor?
Avestor is a real estate investment platform that enables investor to build their own custom portfolios. Investors are able to diversify across different cities/states, property types and time horizons. Investors have opportunity for passive income and/or capital appreciation on real estate investments.
What is the benefit of investing in real estate?
The real estate market has historically performed independent of the stock market. Investing in real estate helps diversify your overall portfolio, provide passive income and opportunities for long-term appreciation.
How does Avestor work?
1) Accredited investors join a private fund with other investors.
How is Avestor different than a REIT?
Avestor allocates your capital into investments based on the direction you give us. This results in every investor having a customized portfolio. REITs cannot be customized by an investor to meet their personal investment goals.
How is Avestor different than other real estate platforms?
Avestor is unique in numerous ways from other real estate platforms.
How much transparency does Avestor provide on investments?
Avestor's platform provides a new level of transparency for investors. Unlike a REIT, investors are able to view the performance of every individual investment in their portfolio. For equity/syndication deals, we have all the due dilgence documents (PPMs, Operating Agreements, financial spreadsheets) from sponsors. For debt deals, we have the information available to us that was provided by the sponsor.
Regulatory
Is Avestor's offering approved by the SEC?
Any funds on Avestor's platform are disclosed to the SEC and any states where we have investors through a Regulation D, Form D electronic filings. Funds use a 506(c) or 506(b) exemption so SEC registration for the offering is not required.
Is Avestor a Registered Investment Adviser?
Avestor is not a registered investment adviser. We recommend you work with your financial or investment adviser to determine if real estate investments and private funds should be part of your portfolio.
Is Avestor a robo-adviser?
While Avestor uses technology to automate our processes, we are not a robo-adviser.
Is Avestor a broker?
Avestor in not a broker and does not receive any broker compensation.
Tax
What tax statements do I receive?
Avestor provides a single, consolidated K-1 each tax year to each investor. The K-1 will consolidate all interest income, dividends, business income/losses and real estate income/losses.
When will I receive my tax statements?
Limited Partnerships are complex and require time to ensure accounting is properly done. Investors will be participating in deals where Avestor is dependent on the delivery of partnership K-1s from its sponsors to Avestor prior to being able to generate our consolidated K-1 for investors. Avestor's goal is to deliver individual K-1 to each investor in early April ahead of the tax deadline but cannot guarantee it. Like most real estate investments, investors should plan for the possiblity of delays and filing extensions for their tax return.
Investments
What are Residential Debt Notes?
Residential debt notes are short term loans (~12 months) to borrowers to purchase a single family home. Borrowers put 10% to 30% cash down and the note covers the remainder. The borrowers pay either monthly interest on the loan or the interest is accrued and paid in full at the end of the loan term.
What are Commercial Debt Notes?
What is Commercial Equity?
Commercial equity deals provide an opportunity for investors to jointly participate with an active sponsor in the purchase of a larger property. These can include apartment buildings, student housing, self storage, retail centers or other commercial properties.
No Spin
Why should I trust Avestor? You are a start-up.
Every company starts out as a small company. Some investors are comfortable working with small companies and others are not. If you are not, that’s okay. Join our mailing list and track our progress. When you are comfortable, reach out and we would love to work with you.
What happens to my money if Avestor goes bankrupt?
Our legal structure is setup to protect investors. Investors join private funds that are a separate legal entity from Avestor Inc.
Avestor's initial fund, Avestor Ariel LP Fund, is a limited partnership where Avestor is the general partner. In the event that Avestor Inc. cannot continue to function as the general partner, the partnership agreement states that Avestor Inc. will assign a trustee to manage the partnership until all investments exit, investor capital is returned and the partnership can be properly dissolved. In an absolute worst case scenario where Avestor Inc. did not assign a trustee, the investors, who are limited partners of the partnership, have the right to assign their own trustee.
Bottom line. Our structure is set up to protect investors regardless of what happens to Avestor Inc. as an entity.
I can invest in deals directly. Why should I pay Avestor fees to be in your fund?
We believe we are providing significant value for the 1.00%-1.25% annual platform fee that we charge investors. We spend a large amount of time researching deals around the country, talking to deal sponsors and then selecting deals that we believe provide the best return opportunity at the lowest investor risk level. We enable investors to participate in equity deals at a significantly lower investment level than if they went directly to the deal sponsor. Finally, unlike any other platform in the market, we have built a leading edge technology platform that allows investors to build a fully customized portfolio that meets their investment goals.
Are you compensated by sponsors on deals that you invest in?
We do not receive any direct compensation, soft dollars or benefits of any other kind from the syndicators or crowdfunding platforms to invest in their deals.
Are you affiliated with any of the sponsors on deals that you invest in?
We have no financial interests or affiliation in any of the sponsors that we invest your capital.
Does the leadership team invest in Avestor's deals?
Yes. As the saying goes, "put your money where your mouth is". We have personal accounts with Avestor Ariel LP Fund and invest our own capital into deals.
Why does your PPM have so many risks listed?
We believe every investor should invest with eyes wide open. Commecial real estate investing has a multitude of different risks and you can lose your capital on a deal due to a variety of reasons. This can be anything from the deal sponsor failing on their business plan to real estate market conditions. We do our best to help investors build a diversified portfolio so their risk is minimized on any given deal. Bottom line, when an investor seeks high returns, it comes with risks. Please read our PPM carefully before you invest.
Am I paying for Avestor's engineering and marketing expenses as part of fund expenses?
Absolutely not. All fund expenses are expenses tied directly to the fund, such as Regulation D filing fees, state fees, bank fees, funding accounting/tax, etc.).
Ariel LP Fund
What is the Avestor Ariel LP Fund?
Ariel is Avestor's first private, customizable fund. It invests in residential debt deals, commercial debt deals and commercial syndication deals. Investors build a custom portfolio inside the fund by allocating slides of active deals to their portfolio. Individual slices are between $500 and $5000 per slice.
What is the minimum investment in the Ariel Fund?
The minimum investment in the fund is $25,000. Subsequent capital investments are $1000.
What are the fees for the Ariel Fund?
What is the structure of the Fund?
The Avestor Ariel LP fund is a Delaware Limited Partnership. Investors join the fund as limited partners.
What kind of investments does Avestor Ariel LP fund invest in?
The Ariel LP Fund focuses on three types of deals - residential debt notes, commercial debt notes and commercial equity. Debt notes have a shorter time horizon (<24 months) and pay interest income. Commercial equity have a longer time horizon (3+ years) and pay cash distributions and a share of profits on the sale of the property.
Do you invest in distressed loans?
Avestor Ariel LP Fund does not invest in distressed loans.
Who is able to invest in the fund?
Avestor Ariel LP Fund is only accepting accredited investors at this time. 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: (1) Income Test: 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 or (2) Asset Test: Have a net worth of more than $1 million (individually or jointly), excluding the value of a primary residence or (3) Qualification Test: Passed the Series 7, Series 65 or Series 82 exams administered by FINRA.
How are investments made in the fund?
Avestor selects deals that best suit the financial and suitability requirements of the fund as a whole. We do not select investments directly for individual investors. Avestor then pre-invests in the deal. Once a deal is closed, investors may select the deals they want to participate in or request Avestor to auto allocate slices of deals based on their portfolio direction.
How many deals can I be in?
For an initial $25,000 investment, most investors should expect to be allocated at least 25 deals unless you have directed us differently. The number and types of deals that each invidividual Limited Partner varies based on the capital investment they have made in the partnership and what deals were available when they made their capital investment. For each deal, Avestor allocates the deal across multiple investors to reduce risk.
How are investments made in the fund?
Avestor selects deals that best suit the financial and suitability requirements of the fund as a whole. We do not select investments directly for individual investors. Avestor then pre-invests in the deal. Once a deal is closed, investors may select the deals they want to participate in or request Avestor to auto allocate slices of deals based on their portfolio direction.
How are earnings, profits & losses allocated?
Earnings, profits and losses are tracked at a deal level and are allocated to the Limited Partners that are participating in each specific deal. The actual allocation is calculated by algorithms based on a combination when capital was allocated and how much capital was allocated. More details can be found in the Private Placement Memorandum (PPM) and the Limited Partnership Agreement (LPA).
How do I exit the fund?
Unlike investments in publicly traded equities, real estate deals are not liquid. An investor must wait for each deal in their portfolio to complete before the principal and earnings for that deal can be returned. Once an investor seeks to exit the fund, Avestor will determine an estimated timeline based on the their investments. In most cases, fully exiting the fund and the underlying limited partnership will take multiple years.