An accredited investor, in the context of a natural person, includes anyone who:
Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current calendar year, OR
Has a net worth over $1 million, either alone or together with a spouse or spousal equivalent (excluding the value of the person’s primary residence), OR
Holds good standing a Series 7, 65 or 82 license
On the income test, the person must satisfy the thresholds for the prior two years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period. The person may satisfy the threshold based on joint income for the years during which the person was married and based on individual income for the other years.
In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:
Any trust with total assets more than $5 million, not formed to specifically purchase the subject securities, and whose purchase is directed by a sophisticated person, OR
Certain entity with total investments more than $5 million, not formed to specifically purchase the subject securities, OR
Any entity in which all the equity owners are accredited investors.
In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
That depends on which vehicle you decide to invest in. If you invest in our new accredited fund, you will receive a Form K-1. A Form K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income. Our goal is to finalize all Form K-1s annually by March 31st, however, we do rely on outside reporting and may require additional time to furnish the forms in a way that is to the investor’s best advantage. Accordingly, you may be required to obtain one or more extensions for filing federal, state and local tax returns, but that is not our intention.
If you invest in our new non-accredited vehicle, you will receive a Form 1099-DIV. A Form 1099-DIV is a tax form that records income earned from entities or persons other than your employer. For our non-accredited vehicle, it will record the amount of distributions you receive and whether those distributions are income or a return of capital. We will provide you with a Form 1099-DIV by January 31st each year.
For stabilized, income-producing property investments, we target low- to mid-teens equity returns on an annualized basis over the entire life of the investment. We may target equity returns that are higher or lower depending on the type of investment and amount of leverage utilized. For example, if we invest in a property that requires significant repositioning through capital and marketing investments, we may forego near-term distributions to achieve a higher gain on the sale of the property in the longer term. We target higher equity returns for these types of investments as they involve more risk.
Our targeted returns are just that, targets. Investment involves risk and our actual returns may be higher or lower and may include a partial or total loss of your investment.
All investments involve risk, including those investments made in ProudLiving NJRE and PL Equity Fund and we do not guarantee that you will earn our targeted returns. There are many factors that can impact the performance of your investment, many of which are not under our control. Please keep in mind, investing involves risk and may result in partial or total loss of your investment.
Prospective investors should carefully consider investment objectives, risks, charges, and expenses, and should consult a tax or legal advisor before making any investment decision.
We do believe that investing in private real estate poses less risk than other types of investments. Private real estate has historically been less volatile than the stock market, and properties generally appreciate over time as inflation tends to push rents up.
Additionally, we conduct extensive research and due diligence on every project investment we have a high degree of conviction that our risk is balanced with our targeted returns.
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