FAQ

Common Questions

While our vision is to make real estate investing simple, we understand that making a decision to invest your capital is never easy. Browse our FAQs below, and if you cannot find the answers to your questions, please reach out to us at Contact Us.
For answers to the hard questions that investors sometimes hesitate to ask us, the No Spin section answers them.

Private real estate funds offer a number of benefits for sophisticated investors looking to diversify their portfolios and maximize their returns. By investing in a range of properties through a private fund, you can spread out your risk and increase the chances of a positive return. Private funds also offer customization, allowing you to tailor your investments to your specific needs and preferences. Additionally, private funds provide diversification across markets, asset classes, and investment time frames, as well as the ability to invest gradually and benefit from liquidity and tax advantages. According to a study by the National Association of Realtors, investing in multiple properties through a private fund can lead to higher returns compared to investing in a single property.
Private real estate funds can include a variety of property types, such as residential, commercial, industrial, and retail properties. The specific properties included in a fund may vary, depending on the fund’s investment strategy and target market. For example, a fund may focus on investing in multifamily apartment buildings in major cities, or it may invest in a mix of properties across different sectors and regions. As an investor, you have the ability to choose investments that align with your goals and risk tolerance.
Private real estate funds are typically managed by a team of professionals with expertise in real estate investing. This team is responsible for identifying and evaluating potential investment opportunities, negotiating deals, and managing the assets in the fund. The management team will also work with investors to ensure that their portfolio meets their individual needs and objectives. Private real estate funds may also have a board of directors or other oversight body to provide additional oversight and ensure that the fund is being managed in the best interests of investors.
Like any investment, investing in private real estate funds carries some level of risk. Some of the potential risks include market risk, where the value of the fund’s assets may fluctuate due to changes in economic conditions or other factors; operational risk, where the fund may encounter difficulties managing its properties or dealing with tenants; and liquidity risk, where it may be difficult to sell your investment in the fund if you need to access your capital. It’s important to carefully consider these risks and consult with a financial professional before making any investment decisions. However, by diversifying your portfolio through a private fund and working with a professional management team, you can help to mitigate some of these risks and increase your chances of a successful investment.
Better Capital Real Estate Fund is a real estate investment platform that enables investors to build their own custom portfolios through an online portal. Avestor has its own fund (BetterCapital Real Estate Fund, LP) and we partner with other real estate sponsors to help them build their own customizable fund offerings.
Accredited investors join a private fund offered by Avestor or through one of our partners.

Inves
tors build their portfolios by selecting slices of available investments.

For each investment, BetterCapital Real Estate Fund tracks your pro-rata share of both percentage and time in each deal and distributes earnings to you based on that pro-rata share. Earnings and principal returned can be re-invested in new deals.
The real estate market has historically performed independent of the stock market. Investing in real estate helps diversify your overall portfolio, and provide passive income and opportunities for long-term appreciation.
Our platform allocates your capital into investments based on the direction you give the fund manager. This results in every investor having a customized portfolio. REITs cannot be customized by an investor to meet their personal investment goals.
Additionally, REITs distribute all earnings through dividends while limited partnerships allow pass-through profits/losses and appreciation. Consult your tax or investment advisor to understand the tax advantages of our model.
BetterCapital Real Estate Fund platform provides a new level of transparency for investors. Unlike a REIT, investors are able to view the performance of every individual investment in their portfolio. For equity/syndication deals, we have all the due diligence documents (PPMs, Operating Agreements, financial spreadsheets) from sponsors. For debt deals, we have the information available to us that was provided by the sponsor.
BetterCapital Real Estate Fund is unique in numerous ways from other real estate platforms.
1) Most platforms focus on individual deals. We focus on helping investors build a custom portfolio of deals.
2) Avestor does not originate deals. For our Avestor funds, we evaluate deals across many platforms and sponsors, select the best ones, and pre-invest in them.
For other funds on Avestor’s platform, the sponsor of the fund may be originating the deals.
BetterCapital is BetterCapital Real Estate Fund, LP first private, customizable fund. It invests in residential debt deals, commercial debt deals and commercial syndication deals. Investors build a custom portfolio inside the fund by allocating slides of active deals to their portfolio. Individual slices are between $500 and $5000 per slice.
The BetterCapital Real Estate Fund, LP Fund focuses on three types of deals – residential debt notes, commercial debt notes and commercial equity. Debt notes have a shorter time horizon (<24 data-preserve-html-node="true" months) and pay interest income. Commercial equity have a longer time horizon (3+ years) and pay cash distributions and a share of profits on the sale of the property.

  • Equity Deals (you are an “owner”)
  • Longer term investments – 3 to 7 years
  • Equity stake in the property
  • Pro-rata shares of income distributions
  • Pro-rata shares of profits from sale
  • Debt Deals (you are a “banker”)
  • Short term investments (2 to 24 months)
  • Participate in financing of a note to borrower
  • Fixed interest rate based on borrower quality
  • Pro-rata shares of monthly income or deferred interest
  • 1st lien on the property
Better Capital Real Estate LP Fund is only accepting accredited investors at this time. To qualify as an accredited investor, you must meet certain thresholds as defined by the Securities and Exchange Commission under rule 501 of Regulation D. Specifically, you must meet one of the following criteria: (1) Income Test: Earn an annual income per individual of over $200,000 per year ($300,000 per married couple or spousal equivalent) with the expectation of maintaining such level of income in the future or (2) Asset Test: Have a net worth of more than $1 million (individually, jointly or with spousal equivalent), excluding the value of a primary residence or (3) Qualification Test: Passed the Series 7, Series 65 or Series 82 exams administered by FINRA.
The minimum investment in the fund is $100,000. Subsequent capital investments are $1000.
For an initial $25,000 investment, most investors should expect to be allocated at least 25 deals unless you have directed us differently. The number and types of deals that each individual Limited Partner varies based on the capital investment they have made in the partnership and what deals were available when they made their capital investment. For each deal, Avestor allocates the deal across multiple investors to reduce risk
BetterCapital Real Estate Fund selects deals that best suit the financial and suitability requirements of the fund as a whole. We do not select investments directly for individual investors. Avestor then pre-invests in the deal. Once a deal is closed, investors may select the deals they want to participate in or request Avestor to auto-allocate slices of deals based on their portfolio direction.
The BetterCapital Real Estate LP fund is a Delaware Limited Partnership. Investors join the fund as limited partners.
Earnings, profits, and losses are tracked at a deal level and are allocated to the Limited Partners that are participating in each specific deal. The actual allocation is calculated by algorithms based on a combination of when the capital was allocated and how much capital was allocated. More details can be found in the Private Placement Memorandum (PPM) and the Limited Partnership Agreement (LPA).
The BetterCapital Real Estate LP fund charges an annual platform fee of 1.25% on accounts valued up to $100,000 and 1.00% for accounts valued over $100,000. The fee is calculated based on the daily account value and multiplied by either .0125/365 or .010/365 to calculate the fee for that day.

Investors in the fund also share in any limited partnership expenses such as regulatory fees, and tax/accounting costs. Pro-rata expenses are calculated as an investor’s account value as a percentage of the total fund assets. Expenses are projected to be approximately 0.25%-0.50% of an investor’s account value. More details on the fees will be available in the Private Placement Memorandum (PPM) and Limited Partnership Agreement (LPA).

The BetterCapital Real Estate LP fund does not take any additional Performance fees from Limited Partners.
BetterCapital Real Estate Fund does not invest in distressed loans.

Investments

Residential debt notes are short term loans (~12 months) to borrowers to purchase a single family home. Borrowers put 10% to 30% cash down and the note covers the remainder. The borrowers pay either monthly interest on the loan or the interest is accrued and paid in full at the end of the loan term.

Investors participating in the notes receive their pro-rata share of interest income that the borrower pays for the loan and receive principal back at the end of the term.

The sponsor of the note generally holds the first lien on the loan. If the borrower fails to pay, the sponsor can take possession of the property and sell it to return the principal back to the investors holding the notes.
Commercial debt notes are short term loans (24 months or less) to borrowers to purchase a commercial properties. These can include multi-family homes, townhomes, mixed use properties, land development projects and other new construction projects. Borrowers put 15% to 35% cash down and the note covers the remainder. The borrowers pay either monthly interest on the loan or the interest is accrued and paid in full at the end of the loan term.

Investors participating in the notes receive their pro-rata share of interest income that the borrower pays for the loan and receive principal back at the end of the term.

The sponsor of the note generally holds the first lien on the loan. If the borrower fails to pay, the sponsor can take possession of the property and sell it to return the principal back to the investors holding the notes.
Commercial equity deals provide an opportunity for investors to participate jointly with an active sponsor in the purchase of a larger property. These can include apartment buildings, student housing, self-storage, retail centers or other commercial properties.

The investments are a minimum of 3 years and can be as long as 7 years. Sponsors may be constructing a new property or renovating an existing property with the goal of increasing the income and value of the asset over a time horizon. At the end of the time horizon, the sponsor sells the property and splits the profits with the passive investors. Investors also get the tax benefits of real estate including depreciation.

Commercial equity deals are traditionally higher-risk deals since banks generally hold the first lien on the property. Returns on successful deals are also higher.

Regulatory

Any funds on Better Capital’s platform are disclosed to the SEC and any states where we have investors through Regulation D, Form D electronic filings. Funds use a 506(c) or 506(b) exemption, so SEC registration for the offering is not required.
BetterCapital Real Estate Fund is not a registered investment adviser. We recommend that you work with your financial or investment adviser to determine if real estate investments and private funds should be part of your portfolio.

BetterCapital Real Estate Fund. is an Exempt Reporting Adviser in Oregon. More information can be found on the SEC website at link
BetterCapital Real Estate Fund is not a broker and does not receive any broker compensation.

Tax

BetterCapital Real Estate Fund provides a single, consolidated K-1 each tax year to each investor. The K-1 will consolidate all interest income, dividends, business income/losses, and real estate income/losses.
Limited Partnerships are complex and require time to ensure accounting is properly done. Investors will be participating in deals where Avestor is dependent on the delivery of partnership K-1s from its sponsors to Avestor prior to being able to generate our consolidated K-1 for investors. Avestor’s goal is to deliver individual K-1 to each investor in early April ahead of the tax deadline but cannot guarantee it. Like most real estate investments, investors should plan for the possibility of delays and filing extensions for their tax returns.

No Spin

Every company starts out as a small company. Some investors are comfortable working with small companies, and others are not. If you are not, that’s okay. Join our mailing list and track our progress. When you are comfortable, reach out, and we would love to work with you.
Yes. As the saying goes, “put your money where your mouth is”. We have personal accounts with Better Capital Real Estate Fund, LP Fund, and invest our own capital into deals before you even look at the deal; this is how much we believe in our investments.
Our legal structure is set up to protect investors. Investors join private funds that are a separate legal entity from Avestor Inc.

BetterCapital Real Estate Fund’s initial fund, BetterCapital Real Estate LP Fund, is a limited partnership where BetterCapital Real Estate Fund is the general partner. In the event that Avestor Inc. cannot continue to function as the general partner, the partnership agreement states that BetterCapital Real Estate Fund. will assign a trustee to manage the partnership until all investments exit, investor capital is returned, and the partnership can be properly dissolved. In an absolute worst case scenario where BetterCapital Real Estate Fund. did not assign a trustee, the investors, who are limited partners of the partnership, have the right to assign their own trustee.

Our structure is set up to protect investors regardless of what happens to Better Capital Real Estate Fund. as an entity
We believe every investor should invest with eyes wide open. Commercial real estate investing has a multitude of different risks, and you can lose your capital on a deal due to a variety of reasons. This can be anything from the deal sponsor failing on their business plan to real estate market conditions. We do our best to help investors build a diversified portfolio, so their risk is minimized on any given deal. Bottom line, when an investor seeks high returns, it comes with risks. Please read our PPM carefully before you invest.
We believe we are providing significant value for the 1.00%-1.25% annual platform fee that we charge investors. We spend a large amount of time researching deals around the country, talking to deal sponsors, and then selecting deals that we believe provide the best return opportunity at the lowest investor risk level. We enable investors to participate in equity deals at a significantly lower investment level than if they went directly to the deal sponsor. Finally, unlike any other platform in the market, we have built a leading edge technology platform that allows investors to build a fully customized portfolio that meets their investment goals.
We do not receive any direct compensation, soft dollars, or benefits of any other kind from the syndicators or crowdfunding platforms to invest in their deals.
We have no financial interests or affiliation with any of the sponsors in which we invest your capital.
Absolutely not. All fund expenses are expenses tied directly to the fund, such as Regulation D filing fees, state fees, bank fees, funding accounting/tax, etc.).

BetterCapital Real Estate Fund., which is developing the platform and marketing BetterCapital Real Estate Fund, is a separate legal entity. The only compensation that Avestor Inc. receives from the fund is the annual platform fees.

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Disclaimer: No Offer of Securities—Disclosure of Interests. Under no circumstances should any material at this site be used or considered as an offer to sell or a solicitation of any offer to buy an interest in any investment. Any such offer or solicitation will be made only by means of the Confidential Private Offering Memorandum relating to the particular investment. Access to information about the investments are limited to investors who either qualify as accredited investors within the meaning of the Securities Act of 1933, as amended, or those investors who generally are sophisticated in financial matters, such that they are capable of evaluating the merits and risks of the specific investment. None of the content provided on this website should be seen as tax or legal advice. Please consult a licensed professional

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