Fequently Asked Questions
When I become an Investor, how does that work?
American Colonial Capital is providing a private, secure and simple to use online platform for accredited investors to access, review and invest in real estate transactions across the nation. Investors can peruse the pre-vetted real estate investment opportunities on our platform, review offering materials, review legal documents and due diligence items all to allow them to make informed investment decisions in what we feel is the greatest wealth creation tool on the planet.
When I become an Investor, what do I own?
Investments with American Colonial Capital will be in the form of units of a limited Partnership (LP). Each property offering will have a single purpose, bankruptcy remote entity formed for the sole purpose of owning and operating that asset. LLCs are often the best structure for real estate ownership as it allows the investors the benefits of limited financial exposure, pass through taxation status and relative flexibility in the ability to liquidate ownership should the need arise.
Who can invest with ACC?
American Colonial Capital Investors are accredited investors across the United States, just like you. Investors who know they would like to invest in commercial real estate, but do not have the opportunity to, due to either large capital requirements or inexperience in operating the assets.
Why should I become an Investor?
The main benefit of becoming an Investor is that we are demystifying the art of investing in commercial real estate. By streamlining the process and providing a one-click execution of documentation, ACC is the easiest solution to access a nation of fully vetted real estate investment opportunities. The Founders of ACC have a combined 90 years and $1+ billion of experience in real estate transactions. Their knowledge base allows for only the best investment opportunities to make it to your dashboard.
Is the American Colonial Capital platform secure?
We protect the security of your information during transmission by using Secure Sockets Layer (SSL) software, which encrypts information you input and receive back from us.
Is my investment with ACC secure?
American Colonial Capital will structure all investments as single asset LLC?s, which will allow for their existence to continue should something happen to ACC or the operating partner we select for the investment. Options would include transferring management to a third party service provider, a court appointed advisor or back to the members. Ultimately, one of the benefits of ownership in real estate is that your investment is in a bricks and mortar asset, not a financial derivative that is subject to the whims of the stock market.
How is documentation handled with ACC?
American Colonial Capital utilizes a standardized base set of documents that are tailored for each specific investment. When the investment is initially posted on our platform for review, you will be able to browse the draft documents at that time. While the documents are non-negotiable, we have taken care to draft a favorable and friendly document that provides the highest level of investor protections and ease of use. All signatures will be executed electronically with a fully executed electronic version both emailed to you as well as a copy kept in your investor dashboard.
How do I communicate with ACC?
In addition to an online Q&A section for each potential investment, operators that enter into investments with American Colonial Capital will be required to report at a minimum on a quarterly basis. ACC will be launching a mobile app that will allow for real time communication that can link with the operators property management systems for up to date status reports on all leasing and property related activities.
Is there a minimum or maximum investment?
Investment minimums will typically be at $100,000, however American Colonial Capital reserves the right to alter this at any time. There will be no maximum investment amount, but the fund managers reserve the right to limit the investment to amounts reasonable to invest efficently.
Is the American Colonial Capital Fund a REIT?
The American Colonial Capital Fund I is fundamentally different from a Real Estate Investment Trust (REIT) in that you are owning units of an LP whose sole purpose is to own and operate the assets. Ownership of REIT shares are not physical ownership of real estate, more like a derivative of a real estate, since what you own is a piece of the company that owns real estate. Not only are you subject to the whims of that company, their strategy and the properties they choose to purchase, you are subject to the tremendous volatility of the stock market. By investing with ACC, you are able to control your own portfolio, which assets you choose to invest in and ultimately own the real estate itself, not a financially engineered product that can be wiped out if the stock market goes into a tailspin.
What types of real estate investments will ACC make?
American Colonial Capital will offer investments in hotels, hospitality restaurant, leisure resorts, multi-family and entertainment theaters, industrial senior living/healthcare and land opportunities. In addition to traditional direct investments in these assets, ACC will specialize in the structuring of Joint Venture partnerships with real estate operators to leverage the micro-market expertise of our partners and the ability to generate massive deal flow for our investors.
How does American Colonial Capital screen potential investments?
The Co-Founders of American Colonial Capital have decades of combined real estate transaction experience totaling over $1 billion. Our process to fully understand the fundamentals of each transaction, the structure, the micro and macro market statistics, the property condition, the quality, reputation and track record of the operator and a multitude of other details in each transaction will allow for only the best quality opportunities to make their way through to your Dashboard. Our business is centered around capital preservation and minimization of risk. After all, if you are not happy, we are not happy.
How many Investors can invest in the American Colonial Capital Fund?
American Colonial Capital will aim to keep the amount of investors to no more than 2000. To this fund I, we may have higher minimum investment requirements as the deals become larger in scope.
How are additional capital requirements handled?
Each investment will have a detailed business plan and projected budget that will allow for us to build in the appropriate capital reserves that will be funded at the onset of the transaction. In today's current financing market, on value add or transitional investments, most lenders will provide for future fundings of loan proceeds to cover additional tenant improvement and leasing commission (TILC) costs. In the event that the TILC costs exceed the proposed budget or unforeseen expenses arise, the manager will reserve the right to first offer the existing investors the ability to invest additional capital to cover the costs or to issue additional units effectively diluting the current ownership who elects not to invest the additional capital required to execute the business plan.
What are the tax implications of investing with ACC?
American Colonial Capital is unable to offer tax and/or legal advice and strongly recommends you contact your attorney and accountant for advice on the legal and tax implications of investing with ACC. However, for informational purposes only, the benefits of investing in a Limited Partnership provide for a pass-through taxation entity, limited investor liability as the name suggests, more efficient formation and ongoing reporting requirements as well as far greater flexibility in allocations of profits/losses than other investment entities.
Who makes investment decisions in an LLC?
Each investment through American Colonial Capital will be managed by an ACC controlled LLC who will act as the Managing Member. The Managing Member will have the sole and exclusive right to manage, control and conduct the affairs of the LLC including, but not limited to, the distribution of funds to investors, sale and leasing decisions, operational decisions and reporting activities.
Who manages and maintains the assets?
Each asset will have a seasoned asset managers that have the skills, knowledge and the experience to optimize the asset and solve any challenges involved in owning commercial real estate. The managers will be an expert in the field of that particular asset class, whether it's a Class A, Hospitality, multi-tenant, industrial, or an apartment building.
What fees do investors pay?
American Colonial Capital will charge a nominal fee for its asset management fee. Depending on the nature of the investment and the complexity of structure, the fees will cover the administrative and legal expenses of structuring the investment, the ongoing reporting and management of the investment. Additionally, ACC may utilize an affiliated operating company to provide asset management services for the ongoing optimization of the investment.
When will I be able to get my investment back?
Real estate investments by their very nature have longer term time horizon than that of liquid stocks or bonds. Each investment will have a thoroughly detailed business plan that will outline the timeline to realize the investment and may vary from 2 year to 10+ years. As the nature of the units in the LP investment will be restricted. Per SEC guidelines, they may not be freely sold to the public. It is the intent of American Colonial Capital to either partner with an established secondary market provider or develop our own proprietary secondary market for these securities to provide for the ultimate flexibility to investors.
Are these investments risky?
Real estate investments can have an element of risk and investors need to be prepared for the potential to lose all of their investment. If you are not able to survive or be willing to potentially lose your invested capital, these investments are not for you. That said, American Colonial Capital understands the value of thorough due diligence, deep underwriting of potential investments and the fundamentals that reduce the risk in these investments and will only allow investments on our platform that meet strict investment criteria.
Why is this investment only for accredited investors?
The Securities and Exchange Commission (SEC) has provided for certain exemptions in the sale and registration of securities if they are only offered and sold to accredited investors. Accredited investors have to meet minimum income and/or net worth thresholds and are thought to be sophisticated enough to make informed decisions on the merits of any particular investment opportunity. By offering our investments only to accredited investors, American Colonial Capital is ensuring regulatory compliance.
What is the investment process?
After an investor has certified themselves as accredited and has passed the American Colonial Capital initial screening, they will be able to browse potential investment opportunities by logging in to our Dashboard platform. There they will see all of the due diligence items, property level financials, the proposed deal structures and business plans, draft investment documents (operating agreement, investor questionnaire and subscription agreement) as well as information about the operating partner. Once the investor has deemed the investment is attractive to them, they can simply click on. "investing in fund I" where they will be asked to execute the required documents online via a secure e-signature process and their position in the investment will be secured. The investor will be presented with several options to execute the transfer of funds into a secure third party escrow account where funds will be held until the investment is complete. Monies will then be securely transferred to the investment fund and the real estate transaction will be closed with the new entity taking ownership of the asset. Should the opportunity not reach its full funding amount, 100% of the funds will be refunded to the investor.
How will I be updated as to my investment?
Investors will be able to view real time updates to their investments in their customizable dashboard and mobile application. American Colonial Capital's will be reporting monthly on the status of the assets including leasing updates, tour updates, financial performance/variances and any capital improvements or requirements. Our mobile integration will provide for instant updates to investors and a real time view of how your investments are performing. In addition to the real time updating, Investors will be allowed to post a limited number of questions in our Q&A section of the ongoing investments.
How does the JOBS Act impact ACC?
The Jumpstart Our Business Startups Act (JOBS Act) was signed into law by President Obama in April of 2012 and is intended to provide more effective access to capital for small businesses and start-ups. While most of the attention has been paid to Title III of the JOBS Act (providing for a legal framework to enable equity based "crowdfunding"), Title II potentially will have the greatest impact on American Colonial Capital. While ACC will not initially rely on the implementation of the JOBS Act, Title II will lift the ban on general solicitation of certain securities, allowing companies such as ACC to offer our investment opportunities to accredited investors where no prior meaningful relationship exists. Once Title III regulations are fully enabled by the SEC, ACC will be able to offer investment opportunities to the crowd in its fullest sense, opening up to $30 trillion of capital to invest in real estate opportunities around the nation, truly allowing ACC to bring Wall Street back to Main Street.