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What is CAPFUNDR?
CAPFUNDR is a new way to invest in real estate funds without going through brokers or paying their fees. We do the homework for you and select funds with strong management teams, proven track records, and clear, sensible strategies. We also manage some of our own funds, in areas where we have a particular expertise. You select the funds that fit your investment style, your return expectations, and your risk tolerance. We track their performance and keep you fully informed about how they are doing.
Why did you form CAPFUNDR?
The idea for CAPFUNDR evolved from our experience in the commercial real estate business. When Ed and Mitch worked at large real estate funds, their friends and family asked them how they should invest in real estate but they could never come up with a good answer. Their friends and family didnt have enough savings to meet the investment minimums for the funds they worked at, they couldnt recommend non-traded REITs due to the high fees, and buying property directly was too management intensive and did not offer sufficient diversification. When new legislation allowed crowdfunding for real estate investments in 2013, they were excited that this might be a new and more efficient way for individuals to invest in real estate. But investing in individual projects isnt for everyone. It requires a lot of time, knowledge and effort to thoroughly evaluate a real estate deal. Most investors want an experienced and trustworthy professional manager to do that for them. So CAPFUNDR was formed to give everyone a new and better way to invest in real estate.
Does CAPFUNDR use an automated investment process?
We firmly believe that technology is a tool to enhance our evaluation of risk and return, not a substitute for experience and sound judgment. Real estate is heavily influenced by subjective factors that are difficult to quantify. An algorithm, no matter how clever and sophisticated it may be, lends itself to distortions and manipulation. We believe that our collective real estate experience and expertise is our greatest asset. While technology can be replicated, experience and expertise cannot.
What is CAPFUNDRs mission?
CAPFUNDR is creating a new and better way of investing in U.S. commercial real estate by providing investors with access to the best real estate funds with reasonable fees. CAPFUNDR aligns the individual accredited, family office and small institutional investor with smart money and provides the highest level of expertise, transparency, and credibility as the first curated real estate fund marketplace offering funds to investors.
What is a CAPITAL STACK and what is a TRANCHE within the capital stack?
A capital stack is the stratification of the various equity and debt components of propertys entire capitalization. The capital stack components ("tranches") will always total to 100%. The tranche at the top of the capital stack is the riskiest, and the bottom of the stack is the safest. For example, a simple capital stack for the home you own may consist of two tranche:
  1. Equity (your down payment) = 20%
  2. Debt/First Mortgage (home loan) = 80%
CAPFUNDR may structure its investments with as many as four tranches:
  1. Equity/Sponsor Equity = 15%
  2. Equity/Preferred Equity = 10%
  3. Debt/Mezzanine Debt = 10%
  4. Debt/Senior Loan = 65%
What does "risk-adjusted return" mean?
Risk-adjusted return is a measure to find how much return an investment will provide given the level of risk associated with it.  
Why Invest through CAPFUNDR?
With CAPFUNDR, individual investors have access to the same returns and the same quality of management that large institutions benefit from. Until now, individual investors have had limited choices due to the high investment minimums required by institutional funds. Non-traded REITs and other products designed for retail investors charge such high placement fees that up to 15 cents of every invested dollar is going to brokers and sponsors rather than being invested in property. CAPFUNDR offers a curated choice of real estate funds with fair and transparent fees that won't eat up your returns. The funds represent a variety of different investment strategies with varying degrees of risk and return. What they share in common is that the management teams are the best at what they do. Our founders know how to select funds and their strategies because they have held senior positions at prominent real estate funds and companies including Starwood Capital Group, NorthStar Realty Finance (NYSE: NRF), CBRE Investors, ORIX Capital Markets, Lone Star Funds, AEW Capital Management and Prudential Real Estate Investors.  
Why should individuals invest in Real Estate?
Historically, real estate has produced strong and relatively stable returns. The average annual total return since 1978 has been 8.7%, according to the NCRIEF index, which is based on the aggregate performance of income-producing properties owned by large institutional funds. Not only is this return higher than the S&P average of 8.1% over the last 40 years, real estate has been a lot less volatile.
How secure is the capfundr.com web site and how is my personal information secure?
HTTPS and SSL/TLS
All communication between our users and the CAPFUNDR website is securely encrypted using HTTPS and SSL/TLS. Furthermore, all sensitive information that is captured is encrypted using the AES-256 standard, which is the same standard used by many other financial institutions.

Amazon Web Services
CAPFUNDR uses Amazon Web Services (AWS) to host and operate the CAPFUNDR web site. As a result, we benefit from the security certifications AWS has obtained including ISO 27001 certification, ability for Level 1 service provider under the Payment Card Industry (PCI) Data Security Standard (DSS). AWS undergoes annual SOC 1 audits and has been successfully evaluated at a moderate level for U.S. Federal government systems as well as DIACAP 2 for US Department of Defense systems.

Extended Validation SSL Plus Certificates
CAPFUNDR uses 2048 bit EV SSL Certificates. Our preferred provider, Digicert, does rigorous checks on the ownership of the site, and in the end the user sees a green bar in their browser in addition to the typical lock they would see with a regular SSL site. This more rigorous certificate gives the user the impression that the platform uses the highest level of legitimacy. Information on EV certificates can be found here: http://www.digicert.com/ev-ssl-certification.htm.
What are the investment terms (duration) of a CAPFUNDR Fund investment?
CAPFUNDR investment offerings are closed-end private equity funds with a term of 5 to 7 years on average, and which have provisions for two one-year extensions on the sunset date of the fund extending the maximum term to 9 years.
Who can invest through CAPFUNDR?
Individuals who are "Accredited investors" (also referred to as High Net Worth or "HNW" individuals or Family Offices), Qualified Purchasers, HNW Family Offices and Small-Medium Institutions, including non-profits, (ERISA and Taft-Hartley) plan sponsors and endowments.
How do I join CAPFUNDR?
Joining CAPFUNDR is free for Investors. Follow this link to get to the registration page: SIGN UP.
What is the Jumpstart Our Businesses Start-Up ("JOBS") Act?
The JOBS Act (Jumpstart Our Business Startups Act) of 2012 is legislation that eases regulatory restrictions for raising capital directly from individual accredited investors and for new businesses to make it easier for startups to get established.
How is an investment in a debt fund (i.e., loans) different from an investment in an equity fund that invests directly in property?
An investment in the debt/mortgage fund that makes loans secured by property does not constitute an ownership stake in the underlying collateral property, while an investment directly in a property constitutes ownership as does an investment in the equity ownership is a participation in the ownership entity as a partner. An investment in a loan on a property makes investors a "Creditor" to the borrower ("Owner"), while an investment in the equity of a property makes investors a partner/Owner of the property.
What type of Regulation D investment offering is offered to accredited investors?
CAPFUNDR uses Regulation D 506(c) offerings that allow for greater flexibility in marketing offerings. For some Feeder Funds where the master fund uses a Reg D 506(b) offering, CAPFUNDR will also use a 506(b) offering (which does not allow for general solicitation of the fund). Go to the Glossary for more info on this type of offering.
What is an Accredited Investor?
A term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by certain government filings. Accredited investors include individuals, banks, insurance companies, employee benefit plans, and trusts. In order for an individual to qualify as an accredited investor, he or she must accomplish at least one of the following:
  1. earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of income.
  2. have a net worth exceeding $1 million, either individually or jointly with his or her spouse.
  3. be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
These investors are considered to be fully functional without all the restrictions of the SEC. An employee benefit plan or a trust can be qualified as accredit investors is total assets are in excess of $5 million.
How and when must I verify that I am an Accredited Investor?
New members who are Accredited Investors registering on capfundr.com for the first time may initially "self-certify" and represent that he or she is an Accredited Investor without any further verification. This allows registered Investor members the ability to access and review, in detail, the current investment offerings. Official verification of Accredited Investor status is required prior to each investment commitment, performed by FundAmerica Technologies, LLC, our third-party accredited verification service provider.
What are the minimum and maximum investment amounts?
There is no maximum investment amount, and the typical minimum investment amount per single offering is $25,000. Please see each offering for the stated minimum for the respective offering.
Why do you need my birth date, social security number and/or tax ID number?
As manager of the investment vehicles (SPVs) associated with each property investment offering, CAPFUNDR needs this information to provide annual tax documentation to investors and to the U.S. Internal Revenue Service.
Why cant Non-Accredited Investors invest through CAPFUNDR?
All offerings administered through CAPFUNDR are SEC Regulation D 506(c) offerings that are by law only open to accredited investors. At this time, CAPFUNDR does not plan to administer or offer any non-accredited investor offerings.
When will I receive my first dividend payment, and how frequent are distributions to Investors?
Distribution frequency is dependent on the charter of each respective fund. Distributions are made electronically within five (5) business days of the closing of a month on a monthly basis in arrears 30 days prior or of a quarter on a quarterly basis in arrears of the 3-months prior. For funds with monthly distribution frequency, the first available fund distribution payment shall be the first full month plus the prorated partial amount after the most recently closed month. For funds with quarterly distribution frequency, the first available fund distribution payment shall be the prorated amount after the most recently closed quarter in arrears.
How will Investors be updated on the status of their investments?
Investors will receive monthly statements and quarterly updates of their investment. Investors will receive email notifications of when these statements and updates are available.
Can I sell my fund investment before the investment exit?
You may privately resell your fund investments, subject to certain restrictions specific to each fund offering's Private Placement Memorandum ("PPM") and under the Securities Act of 1933. If you have any questions regarding restrictions on the resale of your investments, please refer to the offering documents associated with the offering.
Is there a secondary market to sell my fund investment before the holding period ends?
Currently there is no secondary market for reselling your fund investment purchased through the CAPFUNDR platform.
I am a non-U.S. resident (foreign investor). Can I invest in a CAPFUNDR offering?
Yes. Foreign investors can invest in CAPFUNDR offerings, but are required to meet the Accredited Investor qualifications criteria as described in this section as well as the international AML (anti-money laundering) criteria as specified by the U.S. government. Note: all investors in CAPFUNDR offerings (both U.S. and international investors) are required to comply to AML rules. Presently, our payment processor, FundAmerica, only handles U.S. investor AML verification. CAPFUNDR will use our legal counsel to verify AML rules for foreign investors until FundAmerica has the capability.
Should I invest in a fund with a specific strategy? Or in individual properties via crowdfunding sites?
Investing directly in a real estate project makes sense if you have the necessary time and the expertise. A good real estate investor brings an open yet skeptical mind, and a wealth of experience, to the process. Imagine an opportunity to invest in an attractive retail property with a projected IRR of 12%. Are you able to ask the right questions to determine whether the assumptions behind that IRR are realistic? Questions you need to be able to answer include:
  • When does the tenants lease mature?
  • How long will it take to find a replacement if they move out?
  • How much must be spent to refit the space for a new tenant?
  • Is the manager charging hidden fees that will reduce your return?
A good real estate investor needs to know the right questions to ask, and needs independent sources of information to check the reasonableness of the information presented by the sponsor. This is what we look for in our fund managers. A second consideration is diversification. It is possible to have a diversified portfolio of individual real estate investments, but that involves making many investment decisions, and a large amount of capital. Funds are diversified because they invest in multiple properties. Investors can diversify even more by owning multiple funds with different managers and different strategies.
Can I invest using retirement savings through my IRA?
Yes. CAPFUNDR has partnered with Pensco Trust, the leading alternative asset custodian for retirement funds (www.pensco.com ). Please contact an Investor Relations professional to assist how to most efficiently invest using retirement savings.
What documents are provided to Investors after an investment has been made?
A copy of the electronically executed subscription documents will be saved to investors' respective Documents Tab of their CAPFUNDR Investor Account Section following the completed funding of the investment. Depending on the structure of the selected fund investment, investors shall receive documentation stating their receipt of either equity interests (LLC Fund) or shares (private REIT Fund) in the respective fund. Typically, investor documents include: the Private Placement Memorandum ("PPM"), the executed Subscription Agreement document (including the W-2) and the Operating Agreement (for LLC Funds).
How do I get started making investments through CAPFUNDR?
The steps to start investing are:
  1. Register as an Self-Accredited Investor on CAPFUNDR
  2. Go to the Offerings section of the site to view all available offerings
  3. Select an offering and review the details and Due Diligence information
  4. Click on the Invest button when you are ready to commit to making an investment, after all offering information and investment analyses have been reviewed
  5. Enter the amount you wish to invest
  6. Electronically sign the Subscription Agreement and W9 forms
  7. Complete the accredited verification process
  8. Initiate a transfer of your investment commitment from your bank account to a secure FundAmerica escrow account (this can also be done offline via a wire transfer or check) while you await confirmation of accredited investor verified status
When will my annual tax forms be available?
CAPFUNDR will provide tax forms by February 15 of each following calendar year.
Can I do a 1031 tax-deferred exchange through CAPFUNDR?
As timing of executing a 1031 exchange is imperative, please inquire with one of our Investor Relations professionals to see if and how CAPFUNDR can accommodate 1031 tax deferred exchanges through CAPFUNDR.
What is the difference between a K-1 and a 1099 tax document?
A K-1 is the annual partnership tax documentation provided to members of LLCs (limited liability companies) and a 1099 is the annual tax documentation provided to shareholders of S-corporations.
Are my income distributions subject to U.S. withholding tax?
U.S. residents are not subject to U.S. withholding. Non-residents that receive certain types of U.S. source income are that are non-allocable to them are subject to U.S. withholding.
What is Form 1099-INT?
Information on 1099 forms can be found in the Glossary.
What is Form K-1?
Information on K-1 forms can be found in the Glossary.