Before You Join
What is your policy on memberships?
We do NOT offer refunds for paid memberships. At Fresh Start Investors, we want to make real estate investing open to everyone, which is why we’ve created a very low barrier to entry and offer low investment options. However, we are serious investors and, while it is not necessary for our members to be real estate investing experts, we want our members to take these investments just as seriously as we do.
What Is Fresh Start Investors and how does it work?
Fresh Start Investors is a platform where anyone interested in real estate investing can “get in the game” with an investment as small as $5,000. Fresh Start Investors specializes in high-capitalization-rate, income-producing properties that can also appreciate in value. The focus is on single-family residential rental properties in specifically targeted markets. Fresh Start Investors offers you no-hassle passive investment opportunities with total cash-on-cash return rates projected to be 8-12% per year. The Fresh Start Investors platform features private placement offerings, which means Fresh Start Investors can make its opportunities open to all investors, non-accredited as well as accredited. In each property, you invest alongside of Fresh Start Investors, and you are assured that Fresh Start Investors will not make any money until you make money (a minimum preferred return). Fresh Start Investors is NOT a fund, and Fresh Start Investors is NOT a platform for listed properties that are brokered by third parties.
Fresh Start Investors creates its individual investment opportunities by:
• Physically finding its properties in the market
• Selecting them individually
• Pricing the properties and structuring the transactions so that you can generate attractive returns
• Making sure all the property management issues are handled
• Generating a preferred return for you before Fresh Start Investors makes any money
Fresh Start Investors members benefit directly from Fresh Start Investors’ expertise, network, market knowledge, and it’s “you make money before we do” investment structure.
Who is eligible to invest?
Anyone who is 21 years or older can invest through Fresh Start Investors. Suitable investors are generally those who can reasonably afford to invest and tolerate the risk profile of a Fresh Start Investors investment.
What are the steps to becoming a member?
Create a Fresh Start Investors account by signing up online.
Register your membership by following the link in your account confirmation email from Fresh Start Investors. Pay your annual membership fee.
Receive your membership activation. (See “WHEN CAN I START INVESTING?”)
When can I start investing?
Typically, members are activated to be able to invest in new deals after 20-30 days. It is important that Fresh Start Investors members be informed and educated about the aspects of Fresh Start Investors transactions and that Fresh Start Investors is assured that you are a suitable investor. This is standard practice, per the SEC, for what are known as 506(b) transactions.
Why does Fresh Start Investors require a membership?
The Fresh Start Investors platform features investment opportunities from Fresh Start Investors Properties. Fresh Start Investors is NOT simply a platform for listed properties that are brokered by third parties. Fresh Start Investors creates these investment opportunities by:
Physically finding its properties in the market
Selecting them individually
Pricing the properties and structuring the transactions so that you can generate attractive returns
Making sure all the property management issues are handled
Generating a preferred return for you before Fresh Start Investors makes any money
As a member, you benefit directly from Fresh Start Investors expertise, network, market knowledge, and it’s “you make money before we do” investment structure. As a Fresh Start Investors member, you can see and invest in all of the new properties on the platform as they are made available. (Existing investors are not required to renew their memberships if they are not interested in seeing new properties.)
What is the minimum investment?
$5,000 is typically the minimum investment. Investors may invest any amount up to the remaining amount available on the property. See individual property details.
Note that in some circumstances, Fresh Start Investors may waive the $5,000 minimum if less than $5,000 remains to be funded to complete a property purchase. (For example, a property with a price of $53,700 may have an unfunded amount of $3,700.) If you are interested in learning about these opportunities as they arise, contact email@example.com.
What are the steps to investing in a property?
Review the available properties in the Offerings section of the website (for activated members only).
Look at the photos and summary data and information of each individual property that interests you.
Select a property of interest and examine the legal documents posted in conjunction with that listing.
Pledge an investment amount by clicking the “Invest Today” button.
Enter the desired investment amount.
Complete all the investment documentation electronic reviews and signatures as instructed.
Fund your investment using the available options as instructed in each offering.
How are investment funds transferred?
Fresh Start Investors allows for wire transfer or certified funds check. Follow the instructions on the platform to execute the transaction as desired. If you wish to provide a paper check, please contact Fresh Start Investors at firstname.lastname@example.org.
Can I invest through my IRA?
Yes. Fresh Start Investors can accept investments from a self-directed IRA.
Do I have to pay more money to make more investments?
No. Members may make as many investments as they like for no additional out-of-pocket costs.
Regulatory and Legal Information
What is the JOBS act?
The “Jumpstart Our Business Startups (JOBS) Act” was signed into law on April 5, 2012. This new law required the Securities and Exchange Commission to draft new rules to loosen the restrictions that were in place at the time. The new law opened the door for companies to issue unregistered securities commonly known as “crowdfunding”.
Why is there a “cooling off” period?
The SEC has recommended that new investors who join an online investing site like Fresh Start Investors be required to accept a cooling off period of around 20-30 days before they can actually commit their money to an investment. The rationale of the SEC is to give the potential investor time to develop a “pre-existing relationship” with the investment platform. Also, the SEC wants the potential investor to be informed and educated about the details of the investment purchase. At Fresh Start Investors, you may view offerings, but you are unable to invest until the cooling off period is fulfilled.
What tax documents will I receive and what are my filing obligations?
You will receive the IRS Form K-1 after the end of the calendar year.
Does Fresh Start Investors withhold taxes?
No. You will be responsible for the tax liability resulting from the earnings on your Fresh Start Investors investments.
How does Fresh Start Investors make money?
Fresh Start Investors is compensated through a “promote,” which basically means that after the investors receive a minimum “hurdle-rate” return, Fresh Start Investors will get a percentage of the remaining cash flows. This approach ensures that Fresh Start Investors does not make any money on a property until you make money on that property. Fresh Start Investors may also charge an additional fee in association with the sale of the property at the end of the investment term. Fresh Start Investors target model for its properties utilizes an 8% hurdle rate and a 25% promote, but investors should review the investment documentation for each property for specific details.
Fresh Start Investors also charges a membership fee to help cover a portion of its baseline operations. See “WHY DOES FRESH START INVESTORS REQUIRE MEMBERSHIP?” for additional information.
Is my personal information secure?
How many properties are available on the platform at a given time?
The properties made available on the Fresh Start Investors platform are hand-selected by Fresh Start Investors management. The number of properties available at any given time can vary, based on market conditions, platform demand, and other variables. Fresh Start Investors manages its pipeline with the objective of ensuring that its members have attractive investment options at all times.
Can I invest through an LP, LLC or Trust?
Yes. You can invest through an LP, LLC or a trust as long as you provide the proper documentation to show that you are empowered to make decisions on behalf of the investing entity.
Does this investment qualify as a 1031 like-kind exchange?
Each 1031 exchange is unique and must be examined by a tax professional to provide full confirmation. That being said, generally speaking, these investments can qualify as 1031 like-kind exchanges when the person or entity that sold the property is the same person or entity that invests in a Fresh Start Investors deal. We are not tax experts and are not providing tax advice. Please check with your tax advisor or 1031-exchange expert, as there are many complications that may limit your ability to receive the benefit of a 1031 exchange.
How do I make money from Fresh Start Investments?
Investors get a pro rata share of the rental income and a share in the appreciation (or potentially depreciation) of the property. See investment documentation for details on the transaction structure, cash flow streams, and disclosures about the individual property.
What are the rates of return?
Fresh Start Investors targets properties that yield a Total Return (cash-on-cash) for its investors of 8-12% annualized. The Income-Only Return rates, which exclude returns from the projected appreciation of its properties, may vary from the total return rates but are also targeted at 8-12%.
How are Fresh Start Investors deals structured?
Fresh Start Investors investors own equity shares of Limited Liability Companies that own income-producing residential rental properties. Fresh Start Investors deals are structured so investors generate a minimum cash return (typically 8% annualized) before Fresh Start Investors can earn any of its “promote” (Fresh Start Investors’ compensation for managing the property and related issues).
How long does each investment last?
Property investments are generally structured to have a five-year time horizon. However, the initial investment term may be either truncated or extended by Fresh Start Investors, so that the company has the ability to be opportunistic in optimizing the total return associated with the property for the investors.
How long does it take for my investment to start cash flowing?
Fresh Start Investors holds your investment funds until the property is fully funded, which can occur within a week or it may take up to 90 days. Fresh Start Investors would guide investors to expect a typical time frame for complete funding to be 30 – 45 days. Once fully funded, most properties will begin cash flowing immediately.
How will I receive my distributions?
Fresh Start Investors investment entities will distribute cash flows on a periodic basis, typically quarterly. In most cases, distributions will be electronically transferred into the account that you designate. If you require an alternative method, you may contact Fresh Start Investors to make that request.
What kind of updates will I receive on my investments?
You will be able to review your personal investment statement on the platform at any time, and you will receive notifications when distributions are made.
Who makes the decisions on the investment entity?
Fresh Start Investors, LLC is the manager of the LLC investment entity that owns the property. The managers of Fresh Start Investors, LLC make the decisions on behalf of the partnership.
Are these investments secure?
These investments contain risks up to and including a total loss of your investment. You should review the detailed risks and disclosure statements associated with each property investment that you consider. Investments in Fresh Start Investors properties should be made only to the extent that they are affordable and the risk is tolerable. Investors are encouraged to consult with professional financial, legal, and tax advisors before making final investment decisions.
What happens if the target funding amount for the property is not met?
If you invest in a property where the target funding is not met your funds will be returned.
What if more money is needed for a property?
Fresh Start Investors property investments are structured so that the purchase price includes an initial contingency fund. Typically, the property will also include: 1) a one-year guarantee on major mechanical equipment (furnace, water heater, air conditioner), 2) a six-month guarantee on repairs made prior to the initial transaction, and 3) a three-month vacancy guarantee. If events arise that require additional funds beyond what is available in the contingency fund, Fresh Start Investors will make a pro-rata capital call to investors in the property. If necessary, Fresh Start Investors may fulfill the remaining capital requirement on its own, in which case investors may face some dilution of their investment and/or a lien may be attached to the property.
Can I get my money out early?
Investors should view these investments as long-term and illiquid in nature. That said, there are mechanisms by which investors can seek to sell their investment either back to Fresh Start Investors, to another member within the LLC or to a third party. Investors should be aware that there are specific terms with which these transactions must comply. Executing such a sale may be time consuming. Fresh Start Investors will make a good faith effort to assist investors who need to exit their investment; however, the company cannot guarantee that such an exit will be achieved.