Frequently Asked Questions

Everything you need to know about commercial real estate investing, real estate crowdfunding and more.

Topics

  • About the Process
  • Investor Questions
  • Legal, Compliance and Tax
  • All Questions

About the Process

+

How do I invest?

There are 3 simple steps to investing:

1. Browse and Conduct Due Diligence - Review the offering materials, including the real estate investment presentation and investment documents.

2. Invest – If you see a deal you like and want to make an investment, you can move to a secure investment area by clicking on the “Invest Now” button then simply fill in the amount and other investment information.

3. Benefit - Fund the investment by wire transfer or send in a check.

+

How do I fund my investment?

After you have filled in your investment amount and gone through the electronic documents, you will be provided funding information. To fund an investment you will be provided with wire transfer instructions or you can send us a check for the amount of your subscription. The investment amount will go into the deal bank account. Once the closing is complete, CityVest will send you a notification via email that we have closed and you will receive the fully executed documents.

+

How / when do I receive my distributions?

After an investment is made to acquire a property or in a real estate investment fund but prior to the sale or realization of the investment, your investment may earn a quarterly, semi-annual or annual distribution at the rate of 6% to 10% per annum of the investment amount. Some development and value add real estate investments may initially provide a lower annual distribution. Some real estate private equity funds may delay providing any distribution until after the first or second year of making the investment. An investor’s share of any distributions is generally transferred directly into the same bank account that was initially used by the investor for the contribution of the original investment amount, and typically occurs soon after CityVest's receipt of such distributions. Please review the expected distribution schedule for each investment before making an investment. No distributions are guaranteed.

+

Where does my money go once I commit to making an investment?

A distinct bank account will be utilized for each investment. You can send your money via a wire transfer or mailing a check. Your money will remain in the bank account until the time of closing. Bank wire transfer instructions are provided on the CityVest platform and in the Subscription Agreement.

+

When and how does my money get transferred from the bank account?

After signing and submitting all required documents digitally via Docusign, you can then fund your investment via wire transfer or check to a bank account. When we have received the minimum amount necessary, you will receive a confirmation from CityVest that the closing process is complete at which point your funds will be released for the investment from the bank account.

+

How do I make money?

You can make money from a CityVest opportunity in two ways: 1) distributed cash flow from each of your properties or funds and 2) profit when the property is liquidated. You may also receive certain tax benefits associated with property depreciation.

+

What is the target return of my investment?

The typical investment will seek to achieve a 10% to 25% rate of return over the life of the investment. This return may include an annual interest or other distribution from the investment, and sometimes this payment may include a preferred return structure. In addition you may get a payment of profits after the property is sold.

+

What criteria does CityVest look for in a real estate private equity fund?

CityVest is focused on real estate investment funds that have a track record of audited investment returns, strong property and asset management capabilities, reputable service providers (such as auditors, administrators, banking and financing relationships), and good relationships with prior limited and joint venture equity partners. We will generally only take on investment managers that are on their second, third or fourth fund and can provide detailed evidence of prior experience and capability in the geography and niche focus of the fund for which they are seeking to raise capital. The lead members of the investment manager must clear a criminal and credit check with no felonies, OFAC or SEC violations. The investment manager must also invest in no less than 1% of the targeted value of the fund.

+

What is the structure of my investment?

You are typically investing in shares or membership interests in a limited liability company established by CityVest. 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 a specific apartment building. An LLC gives you liability protection, shielding your personal assets from the investment. Please find more detailed investment information and risk disclosure in the investment memorandum, presentation or operating agreement for your investment. Potential investors are strongly urged to read the complete set of closing documents in its entirety prior to investing.

+

What criteria does CityVest look for in an investment opportunity?

CityVest is focused on investing in real estate investments originated by strong sponsors. Strong sponsors may possess many of the following attributes: (1) verifiable track record of prior sponsored deals amounting to at least $10 million of transactions and 3 deal in last 3 years. (2) the sponsor’s current transaction must be in a similar geography and property type as their past deals, (3) the sponsor must possess strong property and asset management capabilities, (4) have reputable service providers (such as auditors, administrators, banking and financing relationships), (5) good relationships with prior limited and joint venture equity partners, (6) invest 10% of the equity of the deal, net of sponsor transaction fees, (7) clear a criminal and credit check with no felonies, OFAC or SEC violations. Regarding the sponsor’s property, it must have (1) financial reports indicating a history of positive cash flow performance, (2) strong indications that the property's positive performance will continue for at least the next five years related to geography, demographics or a value add component, and (3) the properties should produce a targeted preferred return of 6% to 10% with a targeted IRR of 10% to 20%.

+

Who makes the decisions of the 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, such as CV Manager LLC, 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 liquid is my investment? What happens if I need to sell early due to an unforeseen cause?

No secondary market currently exists for your investment. You should assume that you will not be able to retrieve your investment prior to the scheduled liquidation date. Further, the investment is considered a “restricted securities” and are not being registered under federal or state securities laws. As such, they may not be resold or transferred unless they are so registered or qualify for an exemption therefrom. CityVest will endeavor to assist each investor in locating a buyer of their investment interest should the need for liquidity arise prior to the realization on an investment.

+

How much money will the sponsor invest in the acquisition of a property or an investment manager in a real estate private equity fund?

The exact amount should be specified in the investment presentation. Generally, sponsor's and investment manager's contributions account for five to twenty percent of the total amount of equity invested in the investment.

+

What are the risks of this investment?

Your investment involves substantial risk including risks to the value of the property at the time of its liquidation. See Risks.

+

Do I qualify to invest in CityVest investments?

CityVest is seeking investors who are “accredited investors,” as defined in Rule 501(a) of Regulation D under the Securities Act.

+

What is an “accredited investor”?

The SEC defines accredited investors as a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person; or a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.

+

Why do I have to be an “accredited investor” in order to invest?

Under Securities and Exchange Commission rules, we may only accept investments from accredited investors.

+

What is the maximum and minimum investment amount?

There is no set maximum amount. Generally the minimum amount will be $10,000 and on a case by case basis the minimum may be higher. To the extent that demand exceeds capacity; allocation preference will be given on a combination of first come first served and to those who invest greater amounts.

+

Can I invest via a self-directed IRA?

Self-directed IRAs can invest in a Cityvest investment but they require custodian involvement and approval before an investment can be consummated. This process creates delay and involves manual processes that reduce the efficiency of the CityVest platform. We continue to evaluate our processes here, however, so if you are interested in investing through an IRA then please contact us and we’ll see what we can do.

Once you link your self-directed IRA to CityVest with a bank account, you can transfer funds immediately.

+

If I commit to investing, am I guaranteed a place in the investment?

No. We will attempt to accommodate as many investors as possible. However, if demand exceeds supply, we will need to allocate shares to investors ourselves. CityVest may accept or reject subscriptions at their discretion.

+

How is CityVest different from a Real Estate Investment Trust (REIT)?

REITs can be liquid investments and are often traded on public exchanges making them subject to the ups and downs of the equity markets. REITs cannot pass through any of the tax benefits that are so attractive in real estate investments. CityVest shares none of this type of market risk as primary real estate asset prices are less correlated with the Dow Jones or other comparable equity markets. REITs are similar to mutual funds in that they are directed by asset managers with broad authority to buy, sell, or restructure properties within the fund and without your consent. REITs generally have a range of different properties that they are investing in. In the case of a CityVest investment in a specific property, you will know details about that specific property. In the case of a CityVest investment in a real estate private equity fund, you will know the track record, strategy and focus of the investment manager, but you will not know the specific details of their investments prior to your investment. However, unlike a REIT investment, a real estate private equity fund will provide a pass through of certain tax benefits to investors.

+

What happens if an investment’s funding target is not met?

If an investment target is not met, you will receive 100% of your investment deposit back.

+

Will the properties have mortgages on them?

Real estate investments are generally funded mostly by mortgage debt due to the low cost of financing. Debt or “leverage” increases returns to equity holders, while also making the project more risky. We expect that CityVest investments will be partially funded with debt, this information will be clearly detailed in each projects presentation. Principal and interest payments due under the mortgage will be paid through rental income generated from the property and will not be your liability or owed by you.

+

What if more money is needed for the property?

CityVest investments general do not have capital calls, meaning investors are not required to commit more money to the property beyond their initial investments. Rather than requiring an additional investment, it is possible that investors may be diluted if more money needs to be raised. It is also possible that the property may be sold.

+

What is backing my investment?

When you invest in a CityVest investment, you own a membership interest in a limited liability company (LLC). That LLC will invest in either the entity that is acquiring the property or the real estate private equity fund. CityVest does not usually provide direct real estate investment opportunities that have a mortgage lien or collateral securing the investment.

+

How long does it take to invest?

After registration, users can immediately view investment opportunities and subscribe to invest.

+

What types of partners does CityVest work with?

CityVest seeks to find its investment opportunities through experienced real estate sponsors or investment manager of real estate private equity funds. The sponsors or investment managers will conduct due diligence and analysis on the property, structure the investment and arrange for mortgage financing.

Copyrights © 2017 All Rights Reserved by CityVest Capital Inc
Privacy / Terms of Service

Please read the important disclosures below.

CityVest.com is a website owned by CityVest Marketplace LLC, a subsidiary of CityVest Capital Inc. (together with its affiliates, “CityVest”). By accessing this website, you agree to be bound by its Privacy Policy and Terms of Service.

The information on this website does not constitute an offer to sell, a solicitation of an offer to purchase or a recommendation of any interest in any investment or security described herein. Any such offer or solicitation shall be made only pursuant to the final confidential offering documents of any entity described on this website, which will contain information about each entity’s investment objectives and terms and conditions of an investment and may also describe certain risks and tax information related to an investment therein and which qualifies in its entirety the information set forth herein. The information contained herein does not constitute part of the offering documents of any entity. An investment in any investment included on this website, entails a high degree of risk (including the possible loss of a substantial part, or even the entire amount, of an investment) and no assurance can be given that any entity’s investment objectives will be achieved or that investors will receive a return of their capital. Past returns are not indicative of future performance.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. Any investment information contained herein has been secured from sources we believes are reliable, but we make no representations or warranties as to the completeness, adequacy or accuracy of any information provided. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed on this website, and are encouraged to consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any investment opportunity.

Prospective investors should read the confidential offering materials of any privately offered investment product, including all risk and conflict disclosures included therein, before investing. Please read detailed information about such calculations in the investment manager’s detailed financial and information material. The information contained herein should be treated in a confidential manner and may not be reproduced or used in whole or in part for any other purpose.

CityVest does not make investment recommendations, and no communication through this website or in any other medium should be construed as such. Private placements on CityVest.com are intended for accredited investors (for persons residing in the U.S.), and for persons residing abroad in jurisdictions where securities registration exemptions apply. Private placements of securities are not publicly traded, are subject to holding period requirements, and are intended for investors who do not need a liquid investment. Private placement investments are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by CityVest, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.

© 2017 CityVest Marketplace LLC. All rights reserved.