Question 1

How do I get started as an investor with Wellings Capital?

Accepted Answer

Click here to get started: https://www.wellingscapital.com/get-started

Once you complete the form, you’ll receive an email with next steps.

Question 2

What is the minimum investment?

Accepted Answer

The minimum investment is $50,000.

Question 3

When do your funds open and close?

Accepted Answer

We typically do not accept capital until we have suitable properties/operators identified. To get on our email list and be notified about funding announcements, you can register here: https://www.wellingscapital.com/get-started

Question 4

I want to invest. What does it look like?

Accepted Answer

Here is the step-by-step process:

1. Register as an investor and review investment documents and details: https://www.wellingscapital.com/get-started

2. Schedule a call with us to get your questions answered and ensure investing with us is the right fit for you and your goals: https://calendly.com/wellings-capital/investment-call

3. Submit your commitment to invest online in our portal: https://wellingscapital.investnext.com/portal/offerings/

4. Verify your accreditation. Steps for this are laid out in the portal.

5. Sign the subscription agreement online.

6. Receive funding instructions and fund your investment through wire or ACH.

7. Wellings Capital receives your funds and deploys the funds to carefully vetted investments.

8. Assuming distributions are available and you have not opted into the Distribution Reinvestment Plan (DRIP), you will receive monthly distributions at least 3-6 months following your investment. Here's the DRIP link: https://www.wellingscapital.com/drip

9. You will receive a detailed investment update for your Fund each quarter and intermittent updates between quarters when there is relevant data to report.

Question 5

How are Wellings Capital's investments structured?

Accepted Answer

Our funds invest with carefully vetted operating partners. The operators are responsible for day-to-day management of the property. We do intense due diligence on each operator before approving them and serve as a large capital provider assuming responsibility for oversight, reporting, and major decisions on behalf of our investors.

As an investor, you will own a membership interest in a Wellings Capital Fund. Through this structure, investors have direct ownership in the individual properties in the Fund, giving investors access to tax benefits. For full details on this structure, please register and read through the Private Placement Memorandum.

Question 6

Who are your operators and what is their track record?

Accepted Answer

This is one of the most important questions every prospective investor should be asking. Much of the success of our investments depends on our operators. For this reason, we take the operator vetting process extremely seriously and we only approve those with stellar track records and distribution history.

These are not companies we just heard about online and decided to partner with. We have met the key principals multiple times in person, met their team, visited their offices, visited their properties in person, and much more. We are transparent with our investors about who these operators are and what we did to vet them. After doing an introduction call (https://calendly.com/wellings-capital/investment-call) with us, we'll be happy to share detailed track records and bios of our approved operators, as well as our stringent operator due diligence process.

Question 7

Can I sell or transfer my interest in this investment?

Accepted Answer

Generally, no. Because there is not an open market for this investment, it is considered illiquid. Historically, we have successfully facilitated exits for investors who needed to get out of a fund. We do not guarantee this, however.

Interests can be transferred by gift or inheritance, usually to family members, by will or other official document. Please see the Private Placement Memorandum for more details. It is important to get to know us and what you're investing in before investing.

Question 8

What is the duration of the funds?

Accepted Answer

An investment in the funds should be considered long-term in nature. Investors should be in a financial position that will enable them to hold their investment for the duration of the offering, which is often projected to be up to ten (10) years, or longer.

Question 9

What types of properties would I be investing in?

Accepted Answer

Wellings expects to invest in multifamily apartments, self-storage facilities, manufactured housing communities (mobile home parks), RV parks, and potentially other commercial real estate asset classes. Here is the link to access free eBooks about self-storage and mobile home parks: https://wellingscapital.com/resources

Question 10

What is a preferred return?

Accepted Answer

We answer this question in a blog post here: https://www.wellingscapital.com/blog/preferred-return

Question 11

What type of funds can I use to invest?

Accepted Answer

You can invest with cash and through trusts, LLCs, and LPs. In addition, you can invest through eQRPs, self-directed IRAs, and self-directed 401(k)s.

You can go here to view our self-directed IRA firm recommendations: https://www.wellingscapital.com/ira

We have worked with quite a few in the past.

Question 12

What is a K-1?

Accepted Answer

Similar to a 1099, a K-1 form is an accounting of the tax income for the year. Each Wellings Capital investor receives one per investment each year, regardless of how many properties are in each fund. K-1 forms are most commonly used in partnerships and in real estate ownership.

Question 13

How is this different from a REIT?

Accepted Answer

A REIT (Real Estate Investment Trust) is basically real estate flavored stock and is often highly correlated to the performance of the stock market. As direct fractional investors, Wellings Capital clients are protected from that volatility.

Additionally, direct fractional ownership provides investors access to all of the tax advantages that are often unavailable to REIT Investors. REITs typically make the majority of their fees through transactions, while the bulk of our fees come after our investors make money.

Question 14

How often should I expect to receive distributions?

Accepted Answer

The frequency of distributions may vary based upon the investment, but typically investors receive distributions on a monthly basis.

Question 15

Can I add funds after my initial investment?

Accepted Answer

Yes you can, while the fund is open. Please check with our team about this if you have additional questions.

Question 16

What kind of reporting will I receive?

Accepted Answer

On a quarterly basis Wellings Capital intends to furnish investors with a fund update, which reports various activities and operations of the fund. It is not uncommon for Wellings Capital to send shorter updates via email between quarters when there is relevant information and/or data to share.

Question 17

What are the tax advantages?

Accepted Answer

Commercial real estate can provide several tax advantages to an investor:

- Cash flow distributions will often flow to you on a tax-deferred basis

- Proceeds from refinance events typically come to you with no immediate tax obligation

- The step up in basis benefit reduces your heir’s tax obligation when they sell the inherited asset

This is not professional tax advice and should not be relied upon for making investment decisions. Investors should consult with their financial advisor, accountant and/or tax attorney for tax advice specific to their particular needs and objectives.

Question 18

Does Wellings Capital intend to use leverage?

Accepted Answer

There will be no leverage at the fund level. However our operators typically use debt when acquiring new properties. It is anticipated that bank or seller financing will generally account for between approximately fifty percent (50%) and seventy percent (70%) of the gross fair market value of each property.

Question 19

What legal risks do I assume in this investment?

Accepted Answer

Your liability cannot exceed the amount of your investment plus amounts distributed to you. One value of real estate as an investment as compared to stocks, etc., is that it is highly unlikely for a property to lose all value, as is possible when investing in stocks or other alternative investments. Companies can go completely out of business or have their value reduced to virtually nothing. The passive investors carry no lending risk.

Question 20

Is my investment guaranteed?

Accepted Answer

No. While Wellings Capital does not make any guarantees regarding investments in these funds, we have used documented historical data on the properties involved and commonly used industry methods to conservatively calculate the potential of these investments. Because it is not possible to predict future events, which can influence any investment, it is not possible to guarantee this as an investment. Guaranteed investments generally carry very low returns as compared to the potential returns projected for these funds.

Question 21

How does Wellings Capital get compensated?

Accepted Answer

The Wellings Capital team leverages years of real estate experience to maximize each project’s success. Wellings Capital realizes routine asset management fees and a share of upside profits after investors receive priority distributions.

Question 22

Who can invest?

Accepted Answer

Our investments are open to approved, accredited investors. Since our offerings fall under Rule 506(c) of Regulation D, investors will be required to verify their accredited status through a third party such as a CPA, financial advisor, attorney, or a service like www.accredd.com. We cover the cost of the accreditation verification for investors through our portal.

Accredited Investors are individual investors who either have a net worth of at least $1,000,000, excluding the value of one’s primary residence, or have earned income over each of the last two years of at least $200,000 and have the expectation to make the same amount in the current calendar year. If you don’t qualify under that standard, you can choose to combine your income with your spouse and the new threshold for qualification would be $300,000.

In addition, entities such as LLCs, 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 in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or

- any entity in which all of the equity owners are accredited investors.

It is also important we ensure we are a fit for one another. This type of investing is not appropriate for every investor. To determine if commercial real estate investing is right for you, please schedule a call with us.

Source: Investor.gov

Wellings Capital