F.A.Q. for investors.

The term “IRR” stands for “internal rate of return,” a measure of financial profitability. Although the term is used frequently in the real estate industry, the Financial Industry Regulatory Authority, or FINRA, does not allow it to be used by its members. Since NSSC Funding Portal, LLC, which conducts the Regulation CF offerings on Small Change, is a licensed “funding portal” and a member of FINRA, we are not allowed to use the term for these offerings.

Small Change is a socially responsible investment platform, featuring real estate projects that we believe can transform cities for the better.  Developers list their projects – which we have reviewed in advance – and investors can choose among them.

To get started, register and create a password. Then you can start seeing and using all the benefits of the Site.

No, it’s absolutely free.

Anyone over the age of 18 can invest in Regulation Crowdfunding offerings.  However, there are also offerings that only “accredited investors” can participate in.

In general, a person is an “accredited investor” if she (i) earns at least $200,000 per year, or $300,000 per year with her husband; or (ii) has a net worth of at least $1 million, excluding her principal residence. You’ll find a more complete definition in our educational materials. Just search for the Accredited Investor definition.

There are plenty of opportunities for non-accredited investors to invest in Regulation Crowdfunding projects on our platform. In fact, that’s what we focus on.

All kinds of real estate projects that we believe can improve cities and communities.

We’ve developed our proprietary Small Change Index to measure the impact each project makes. We won’t list an offering unless the project has the potential to make your city, community or neighborhood better.

Diversifying your portfolio with a real estate investment may provide you with a reasonably predictable and stable level of income from the investment, the opportunity for capital appreciation and an impact investment! But remember, all investments are risky. And direct investments might be riskier than an investment in a stock market index fund, for example.

That’s entirely up to you and your investment advisors. You might consider a balanced portfolio that includes both low-risk and high-risk investments, with the right mix based on lots of factors including your age and your own tolerance for market fluctuations.

Each project will have a stated minimum investment.

You should view these as very risky investments, much riskier than an investment in a stock market index fund, for example. The same is true for any direct investment in real estate. You could lose some or all of your money in any of these investments. Neither Small Change nor anybody else guarantees your investment.

Investment periods can vary greatly. It is important to review the investment period specific to the project you are interested in investing in.

No, not at all. You are only personally liable only to make your investment. We choose our legal structures to protect investors from personal liability.

First, review our open projects. You’ll find a detailed offering description on each campaign page. When you are ready to invest, click the Add Some Change button and follow the prompts until your investment is complete. We’ll have you review important information about the project, ask for information about you, ask you to sign the Investment Agreement and then you’ll provide us with bank information. All on-line. It takes about 60 seconds.

Your money is held safely in an escrow account (which we don’t control) until the funds are raised or the target offering date is reach. Then the funds are  sent to the project developer. If the the offering target amount is not reached, the full amount you invested will be returned to you.

You won’t own real estate directly in your own name, the way you own your home. Instead, you’ll own an indirect interest in real estate. Often, you will own an interest in a limited liability company that itself owns real estate. In other cases, you will own a promissory note that is backed by real estate. In still others, you’ll own an interest in a limited liability company that itself owns a promissory note backed by real estate. We’ll describe exactly what you own in the information we provide for each project.

Your return will vary from project to project. For some projects you might receive a regular flow of income, while for others your interest might appreciate over time. We’ll describe the investment goals of each project as clearly as we can.

Yes! Real estate can be a volatile investment and you should be prepared for ups and downs.

We might provide some general educational material but we’re not allowed to provide investment advice. If you’re not sure about what to invest in, you should consult with your own financial and investment advisors.

Usually, yes. For tax reasons we have to cap how much IRA money any one project can accept.

Generally speaking, no. For one thing, there won’t be an active market, meaning you probably won’t be able to find any buyers. For another, in many projects you will be restricted from transferring your interests. Finally, any transfer of your interest would have to comply with the securities laws.

Choose the project you are interested in on the home page. You’ll land on the project campaign page which is chock-a-block full of information about the offering. You can download the disclosure packet (which includes Form C) on that page as well. And once you have reviewed everything, you can click the Add Some Change button to invest.

 

Not yet. We’re exploring that option for the future.

If you have invested in a Regulation Crowdfunding project, you’ll have until 48 hours before the offering closes to request a refund.

The same way you invested it. Usually by ACH through a direct deposit to your bank account, but sometimes by check or wire.