Frequently
Asked Questions :
What is Syndication?
A syndication in the realm of real estate refers to a collaborative investment strategy where a collective of investors combine resources to purchase substantial properties that may be out of reach for individual buyers. This concept is commonly seen in multifamily real estate deals. Within a syndication structure, there are typically two main categories of participants: General Partners(GPs) and Limited Partners(LPs). GPs, also known as syndicators, are tasked with the active management and operation of the asset, while Limited Partners invest capital into the project without direct involvement in daily operations and managing the asset. The LP, in most of our investments, receives preferred returns meaning they get the returns BEFORE the GPs.
How do I become Accredited?
We use a third party to verify your ability to become an Accredited Investor. Once we have our discovery call and we both decide that we are a good fit, we will email you a link to become an accredited.
What is the process?
We will go into a lot more detail during your on-boarding process but here’s the key milestones:
1. Set up your discovery call with Black Axe Capital via the “Contact Us” page. We find out what your goals are, if this is a good fit and what kind of investor you are.
2. When we put together an investment offering (based off of the Reg D class of investment and the type of investor you are) we make you aware of the investment or will advertise it via our email list, website, social media, etc.
3. We host a webinar to go over the investment opportunity in detail. At that time we present and discuss the opportunity, the business plan and strategy, the details, who is involved with roles and responsibilities of the GPs ( us and the other General Partners) as well as the percentages and splits for the LPs(you and the other investors).
4. The investment window opens for investment for subscription.
5. Once the subscription is filled we notify everyone who is now a LP(Limited Partner) and we begin to execute on the business plan for the specific investment.
Am I financially capable of investing with you?
Some of this decision is financial ability, some of this decision is your level of confidence. Always know that any kind of investment has some level of risk and you should always consult your attorney on any investment you pursue. Do your home work and research. Always.
There are two types of investment opportunities we offer at Black Axe Capital via Regulation D: Regulation D Investments are private investment opportunities that aren't registered with the Securities and Exchange Commission (SEC). They are typically offered to a limited pool of investors and do not require the usual public registration because they are considered private placements. This allows companies to raise capital more efficiently but often limits the investment to accredited investors due to the higher risks associated.
What is an Accredited vs. Non-Accredited Investors?
Accredited Investors are individuals or entities that meet certain financial criteria set by the SEC, such as having a net worth exceeding $1 million (excluding the value of one's primary residence), or having an income exceeding $200,000 ($300,000 for joint income) in each of the last two years with the expectation of earning the same or higher income in the current year. Accredited investors are deemed capable of handling the risk associated with certain investment opportunities, which allows them access to a broader range of investments, including those under Regulation D.
Non-Accredited Investors do not meet these financial criteria and are therefore limited in the types of investments they can access, as these investors are considered to have less financial stability or investment experience. Regulatory measures are stricter for offerings available to non-accredited investors to protect them from potentially high-risk investments. These distinctions help manage the type of investments available to individuals based on their financial stability and investing experience, aiming to protect less experienced investors from high-risk ventures.
If I’m a Non-Accredited Investor,
do you have investment offerings I can participate in?
Yes! From time to time we do offer non-accredited investments and they are labeled as Reg D 506(b), we do not advertise these or blast out any information on them. You have to have a substantial relationship with us in order to even know about these opportunities.
To dig down further, you need to understand the differences between Rule 506(b) and Rule 506(c) under Regulation D and how they are primarily related to how investments are solicited and who can invest:
1.Rule 506(b): This rule allows companies to raise an unlimited amount of money without having to register the securities with the SEC. Companies can sell their securities to an unlimited number of accredited investors and up to 35 non-accredited but sophisticated investors. A key restriction of 506(b) is that companies cannot use general solicitation or advertising to market their securities.
2.Rule 506(c): Under this rule, companies can also raise an unlimited amount of money and are allowed to broadly solicit and advertise their offering. However, all investors must be accredited, and the company must take reasonable steps to verify that the investors are indeed accredited, which is not required under Rule 506(b). In summary, the main differences are the allowance of advertising and the investor requirements: 506(b) allows for some non-accredited investors without the need for advertising, whereas 506(c) permits advertising but requires all investors to be accredited.