Q. What is Buy The Block and how does it work?
A. Buy The Block is a registered Crowdfunding Intermediary (also known as a “Portal”). Under Title III of the JOBS Act of 2012 (Jumpstart Our Business Startups Act), Portals, are allowed to act as a platform connecting issuers, such as real estate developers seeking to crowd fund any type of property. Block Developers list their projects – which we vett in advance – and investors can choose which one to invest in. Developers who utilize Title III are able to raise up to $1M subject to certain limits for each investor depending on such investor’s annual income or net worth. For more information on Crowdfunding, see https://www.sec.gov/spotlight/crowdfunding.shtml.
1). If a Block Offering in which you invested meets its minimum fundraising amount, you will be able to monitor its progress through your BlockVestor dashboard.
2). If a Block Offering in which you invested does not meet its minimum fundraising amount, 100% of your money will be returned to you with no fees or hidden charges.
Q. What is a BlockVestor
A. BlockVestor is an investor who is investing in equity or debt securities in real-estate via Buy The Block.
Limits on BlockVestors:
Anyone can invest in an offering on Buy the Block. However, securities laws limit how much a BlockVestor – even those deemed “accredited investors” – may invest, in a single Block Developer. These limits are calculated during a rolling 12-month period and for a given BlockVestor may not exceed:
EXAMPLE: Deshawn Jackson earns $100,000 per year and has a net worth of $150,000.
BlockVestor Jackson makes his first Buy The Block investment on November 17, 2017, investing $7,500 in Turnkey Restaurant / Event Center | 7,364 SF. On November 27, 2017, BlockVestor Jackson would like to make his second Buy The Block investment, investing $5,000 in Washington Park Shopping Center. Can he reinvest? Yes, he can invest an additional $5,000 in Washington Park Shopping Center on December 27, 2017, as long as he does not exceed his cap of $15,000 per Block Offer (i.e., property). He can invest another $10,000, if he wanted to the following year on November 17, 2018. $10,000, if he wanted to) on December 1, 2018.
Do you need help creating an account? Please dial 513.299.7941 press option 1 for one of our staff to get started.
Q. What is the minimum investment?
A. To become to a BlockVestor you must create an account and you can invest a minimum of $100 for every Block Offer.
Q. What is a BlockDeveloper?
A. Block Developer is an entity, such as a corporation or company who acquires property upon which they plan to develop their real estate projects, whether for commercial or residential purposes. Block Developers utilize Buy the Block’s Portal to offer BlockVestors the opportunity to invest in their Block Offering.
Limits for Block Developers:
To use Buy The Block, a company must be organized in the U.S. and may not be:
EXAMPLE: Turnkey Restaurant / Event Center | 7,364 SF raises $750,000 using Buy The Block. Washington Park Shopping Center, which is under common control with Turnkey Restaurant / Event Center | 7,364 SF, may raise only $250,000 using Buy The Block during the same 12 month period. But it can raise as much it wants using other exempt offerings like Rule 506(b) or Title II.
Q. What is a Block Offer?
A. Block Offering is securities offering of a Block Developer. The underlying project of a Block Offering must include an aspect of a real estate purchase and may be associated with real estate of varying categories, such as office, retail, industrial, multi-family residential and single-family residential.
Q. Are there fees to join?
A. No, absolutely no fees to join the site as a BlockVestor and review offers. Buy the Block charges 1% fee to each transaction at the time of investment. Buy The Block charges the issuer (i.e., Block Developer) fees which may come from the offering proceeds.
Q. How do I learn more about the offers on Buy The Block?
A. Click on an offer, you’ll see a lot of information right away. For more information, after you click on the project, click on Company Information. There you’ll see even more in-depth information about the offer and the investment.
Q. How should I choose an offer on Buy the Block?
A. We provide some general educational material. At this point, however, we’re not allowed to provide investment advice. If you’re not sure, you should consult with your own financial and investment advisors.
Q. Is investing in offers risky?
A. Yes, 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 Buy The Block nor anybody else guarantees your investment.
Q. What is the process for investing in an offer?
A. First, review our active offer. When you decide to invest, click “Invest Now” and we will guide you through the process. We’ll have you review important information about the offer, we’ll ask you to sign our Investment Agreement, and then – and only then – we’ll ask you to pay for your investment.
Q. Can I change my mind after investing?
A. If you have invested in a project, you’ll have until 48 hours before the offering closes to request a full refund.
A BlockVestor may cancel his or her investment for any reason up to 48 hours before an offering’s close and receive a full refund of such investment without any fees or penalties by sending an email to firstname.lastname@example.org with the subject line of “Investment Cancellation” and identifying the particular investment to be canceled. Refunds will be processed within (24) twenty-four hours.
Q. How does a BlockVestor get his/her return on Buy The Block?
A. Getting a return on your real estate deal depends on what type of investment you make, debt or equity. It also depends on the type of security you invest in. Real estate developers deposit all money with in an escrow account and are distributed to every BlockVestor in the time specified in the offering.
Q. How will Buy The Block handle BlockVestors funds?
A. As the Block Offering receives funding via BlockVestors, such funds will be placed in an escrow account managed by a qualified third-party that Buy the Block has contracted with, and will only be released if and when the BlockOffering meets its minimum offering requirement. This effectively allows Block Developers to only have to worry about investor relations.
Q. Why should I consider investing in real estate?
A. Allocating some portion of your portfolio to a direct investment in real estate may provide you with a reasonably predictable and stable level of current income from the investment; the opportunity for capital appreciation; and diversification of your portfolio; and may also provide you with the knowledge that you are helping to improve communities. But you should view these as very risky investments, much riskier than an investment in a stock market index fund.
Q. How often can I expect distributions?
A. It depends on the Block Offer. You can recieve your distribution via By check, ACH or credit card credit.
Q. The real estate market crashed in 2007-08, can it happen again?
A. Yes, real estate market can be unpredictable, you should be prepared for the all ups and downs.
Q. How do I submit a property or an offer?
Set up a Block Developers account to submit an offer. You must include all the details about the property you want to submit. We need real information Legal Name, State Registered Company, Email, Phone Number, Property Type, ect.. We reserve the right to ask any and all information related to this particular property and your business to determine if it will be a good fit for Block Vestors. We also reserve the right not to approve your offer (i.e., property) if we find you are not cooperative or providing real information. You must include relevant credentials to Buy The Block for due diligence and online underwriting.
Please call Buy The Block if you have questions related to our procedures.
Q. Which type of properties can I invest in with Buy The Block?
A. Buy The Block will have different types of property available for your investing needs.
These categories are:
Q. Can I invest using an IRA?
A. Usually, yes. For tax reasons we have to cap how much IRA money any one offer can accept.
Q. Can I sell my real estate investments in Buy The Block?
A. You aren’t going to be able to sell your real estate crowdfunding investments. You only own an indirect interest in real estate so can’t sell it outright to someone else.
Q. What do I need to know to become a BlockVestor or submit a BlockOffer via Buy The Block?
A. Financial inequality is one of the biggest problems in the world today, and it’s in part driven by the fact that most attractive investment opportunities are only open to wealthy investors. However, with the introduction of the Jobs Act, private real estate investing is opening up to the masses.
Here is a summary of real estate investing through Buy The Block:
1). You must create an account.
2). You self-certify as a BlockVestor to invest.
3). Our self-certification process is a potential BlockVestor filling out all the information asked for in their profile.
4). Buy The Block = Low Minimums
5). Investment = As little as $100 or $10 for KidVestors (Custodial Accounts)
6). Annual Cap = Greater of minimum of $2,200 per non-accredited investors or 5% of their income/net worth <$107,000; or
7). 10% of income/net worth if > $107,000
8). Buy The Block is intended for both accredited and non-accredited investors, who are residing in the U.S. or living abroad in jurisdictions where securities registration exemptions apply.
9). Investment opportunities posted on this website are “private placements” of securities that are not publicly traded, are subject to holding period requirements, and are intended for investors who do not need a liquid investment.
10). 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 on the website. Investors must be able to afford the loss of their entire investment.
11). Investors should conduct their due diligence and not rely solely on the financial assumptions or estimates displayed on this website; they 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.
1). Block Developers must submit an offering online.
2). Must agree to go through Buy The Block FULL due diligence process.
3). Block Offerings maximum $1.07M per development per year.
4). Through a portal such as Buy The Block
5). PPM lite; Form C
While real estate investment is an important component of a diversified portfolio, investors must understand the intricacies and risks associated with real estate as an asset class.
Q. I live in Hawaii can I Buy The Block?
A. Buy The Block is a nationwide concept that allows groups and individuals anywhere to pool funds, share knowledge, vote on a property to invest and efficiently manage investments online. You can Buy The Block from anywhere in the continental US and even outside the US.
Q. How can I Buy The Block in my city?
A. For Block Developers, Buy The Block is a great chance to get financing and develop communities in need. With Buy The Block, Block Developers have a new mechanism to raise capital via the internet through our real estate crowdinvesting platform having massive databases of BlockVestors.
To Buy The Block in your city, sign up as a Block Developer and let us help you begin the process. Sign up today.