How do I get started?
Are there fees to join?
No, it’s absolutely free.
Can anyone invest?
Anyone over the age of 18 can invest in Regulation Crowdfunding offerings. However, there are also offerings that only “accredited investors” can participate in.
What is an accredited investor?
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.
What if I’m not an accredited investor?
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.
What kinds of projects will I see on your site?
All kinds of real estate projects that we believe can improve cities and communities.
How do you select projects?
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.
Why should I consider an investment in real estate?
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.
How much should I invest?
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.
Are there minimum investments?
Each project will have a stated minimum investment.
Are these risky investments?
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.
How long is the investment period?
Investment periods can vary greatly. It is important to review the investment period specific to the project you are interested in investing in.
Where does my money go when I invest?
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.
If I invest in a project, do I become personally liable for anything?
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.
What will I own if I invest? Will I own real estate?
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.
How do I make an investment on Small Change?
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.
What will I receive for my investment?
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.
The real estate market crashed in 2007-8. Could that happen again?
Yes! Real estate can be a volatile investment and you should be prepared for ups and downs.
How should I choose among the projects on the site?
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.
Will I be able to sell my shares?
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.
Where can I learn more about the projects?
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.
Can I invest in pools of real estate assets, rather than one at a time?
Not yet. We’re exploring that option for the future.
Can I invest through my IRA?
Yes you can, as long as you have a self-directed IRA (SDIRA). For tax reasons we have to cap how much IRA money any one project can accept.
What if I change my mind after I have invested?
If you have invested in a Regulation Crowdfunding project, you’ll have until 48 hours before the offering closes to request a refund.
Why don’t you show “projected IRRs” for Regulation CF offerings?
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.
How will my money be returned?
The same way you invested it. Usually by ACH through a direct deposit to your bank account, but sometimes by check or wire.
Can I invest if I don’t live in the U.S?
Yes, you can.
But to be clear, when we say that a non-U.S. investor is allowed to invest, we mean only that she is allowed to invest under the laws of the United States. We do not make any representation that she is allowed to invest under the laws of her country of residence, or even that the offering is legal under the laws of that country.
When you invest as a non-U.S. investor, you will be asked to represent that the offering and your investment are permitted under the laws of your country of residence. Be sure to consult your tax advisor on the legality of investing under the laws of your country, and the legality of investing in any particular offering on our site.
If I don’t live in the U.S., is there anything additional required for me to make an investment?
However, unless your country has a tax treaty with the United States that stipulates a lower withholding rate, the issuer is required to withhold 30% of any return you earn per the United States tax code. If you plan to claim a refund of any of the tax withheld, or claim the benefits of reduced tax withholding rates per any income tax treaty for which you are eligible, you will need to obtain an Individual Taxpayer Identification Number (or ITIN) prior to the end of the year, as this is required when filing such a claim. If you already have an ITIN you will be able to provide that number during the investment process. If not, you will need provide it to the issuer later.
What is an ITIN?
An ITIN is an Individual Taxpayer Identification Number, issued by the Internal Revenue Service (IRS), which is required to process tax documents in the United States. It is a nine-digit number that always begins with the number 9 and has a 7 or 8 in the fourth digit, example 9XX-7X-XXXX. You can download the application from the IRS website.
How can I obtain an ITIN?
You apply for an ITIN through the Internal Revenue Service (IRS) by completing form W-7 which can be found on the IRS website, and having the completed form certified by a Notary Public.
I don’t live in the U.S., where can I have my W-7 form certified?
W-7 forms and accompanying documents must be certified by a Notary Public. This service may be available at your local U.S. Embassy or Consulate, as U.S. Consular Officers abroad can sometimes function in the place of U.S. notaries public.
If I invest as an individual, how much of the income generated through my investment is withheld?
Unless your country has a tax treaty with the United States that stipulates a lower withholding rate, the issuer is required to withhold 30% of any return you earn per the United States tax code. You can find a list of countries that have tax treaties with the U.S. on the IRS website. These can be complicated documents, so always consult your tax advisor to assess whether the treaty has any impact on your withholding.
What is a tax treaty?
The United States has tax treaties with quite a few foreign countries. These treaties may provide residents (not necessarily citizens) of foreign countries with a reduction or exemption on United States taxes on certain types of income they receive from sources within the United States.
How can I find out if my country has a tax treaty with the U.S.?
You can find a list of countries that have tax treaty with the U.S. on the IRS website. As noted above, these can be complicated documents, so always consult your tax advisor to assess whether the treaty has any impact on your withholding.
Will my ITIN Expire?
Your ITIN will not remain active forever. The expiration date will vary depending on when you last used it, when it was issued and other factors. Please review the detailed information on the IRS website to ensure that your ITIN does not expire unexpectedly.
How do I know if my ITIN is expiring?
You should receive a CP-48 Notice from the IRS but it’s a good idea if you check when you can expect your ITIN to expire, as described in the FAQ above.
How do I renew my ITIN?
You can renew your ITIN using the same form you used to obtain one, the W-7. This can be found on the IRS website.