Assess their risks, liquidity, investments, returns, timeframes and other terms
Buy shares in vacation rental properties
Invest in startups in exchange for equity
Fundhomes sets its minimum investment threshold at $100, with shares available at $10.
The standard minimum investment on Wefunder for most Community Rounds is $100. However, the exact minimum can vary based on the specific offering and the investor's status as an accredited investor.
Investing in Fundhomes carries risks such as potential loss of capital, market fluctuations, and regulatory changes affecting profitability. Investments are generally illiquid with a long-term exit strategy, and early withdrawal may result in penalties. A secondary market to improve liquidity is under consideration but not guaranteed.
Investing in startups on Wefunder is highly risky, and there's a real possibility of losing your entire investment.
Fundhomes offers liquidity options including automatic share sales when properties are sold (5-10 years), a secondary market for selling shares to other investors, and a buyback program, with potential early sale penalties within the first year.
Wefunder's investments are not highly liquid, as there is no public market for selling your stake. After one year, you can sell to any interested buyer.
Investors in Fundhomes can expect cash dividends from rental income, projected at a hypothetical rate of 6.62% per year, and property appreciation, estimated at 4.74% per year, upon sale within 5-10 years. This totals a hypothetical annual return of 11.36%.
On Wefunder, investors can earn returns through different investment mechanisms: Debt, Convertibles Stock (No Dividends), Stock, Dividends. Investment returns on Wefunder vary by investment type, with dividends more typical in later-stage, non-tech businesses.
The investment time horizon at Fundhomes is typically 5 to 10 years, focusing on long-term gains from rental income and property appreciation.
Investments on Wefunder are long-term, with an average return period of around seven years, particularly for convertible notes or SAFEs.
To invest in Fundhomes, one must be a U.S. Citizen or a resident of the U.S. with a valid Social Security Number.
Individuals 18 and older can invest on Wefunder, regardless of whether they are accredited or non-accredited investors. Additionally, Wefunder allows investments through entities.
Fundhomes' vacation rental properties face real estate market volatility, with valuations influenced by economic shifts, interest rates, and regulatory changes.
The assets on Wefunder, primarily startups and small businesses, are highly volatile due to the uncertain success of these ventures and fluctuating market conditions.
Fundhomes utilizes Regulation A for public offerings, enabling investors to buy shares in Series LLCs that each own a vacation rental property. This approach grants investors partial ownership in a property, with all details outlined in SEC-filed offering circulars.
Wefunder is regulated by the SEC and FINRA under Regulation Crowdfunding (Reg CF), requiring it to adhere to strict rules about investment limits, company fundraising, and disclosures.
Fundhomes insures its properties against physical damage, but this doesn't cover market risks or regulatory changes affecting property values. Insurance limits may also not match property market values.
Investors in Fundhomes receive quarterly dividends derived from the net rental income of vacation rental properties, after deducting operational expenses. These dividends reflect a portion of the property's profitability but are not guaranteed and can fluctuate based on occupancy rates and market conditions.
Wefunder investments typically do not offer dividends, as they are often in early-stage startups focusing on growth.
Investors in Fundhomes can receive their investment back when the property is sold, usually within 5-10 years, or by selling their shares earlier on a secondary market, depending on demand.
On Wefunder, investors primarily see returns from liquidity events like acquisitions or IPOs, where investments may convert to cash or shares. After the first year, shares can be sold to any interested buyer, with Wefunder facilitating the transfer process. For debt investments or revenue shares, returns follow the agreed terms, like fixed repayments or revenue-based payouts.
Fundhomes earns through fees for property and asset management. This includes handling vacation rental operations like maintenance and guest services, as well as overseeing investment strategies and performance.
Wefunder charges a one-time transaction fee of 2% for bank payments and 5.5% for credit card payments. For WeFunds, an administrative fee covers lifetime costs like filings and accounting, with no additional contributions required from investors.
Fundhomes provides K-1 Tax Forms for each investment property, detailing investors' share of income, deductions, and credits. Typically, these forms are issued by March 15th each year, with an IRS extension deadline of September 15th if needed.
Wefunder supports tax reporting for investors by providing Schedule K-1 forms for those invested through LLCs or SPVs, detailing taxable gains or losses. For investments receiving payments, such as revenue shares, Form 1099 may be issued to report income.