Questions? We’ve Got Answers.
FREQUENTLY ASKED QUESTIONS AND FACTS
How secure am I, in my investment?
A: We are NOT attorneys please consult with an attorney if you are concerned about any real estate investment. Here are 10 things to consider before making an investment as posted by the S.E.C. Your investment is at risk, as you have an ownership or lien position in real estate that can change in value. If the budgeting & execution of the project is successful & the valuation estimates prove true, you could capture from 6 to 18% annualized return.
We disclose the financials related to a project for your review (see investment structure Blog). As an example, in our 1st project 3433 E. Sells specifically, they [you] are in a first lien position on the property for the investors, unless we fall short or there are cost over-runs, then it could be a second lien position. The estimated value of the real estate is higher than the investment itself, so we think the risk is market risk.
Can I invest as a Company or Trust?
A: Yes, When you click INVEST NOW, you will be directed to our third part escrow service. During the 1st Step in setting up your investment, there is an option to enter your company or trust name.
Can I invest through my Self Directed IRA or 401K account?
A: Yes, if you have checkbook control of your account or are self-directed. When you click INVEST NOW, you will be directed to our third part escrow service. During the 4th Step in setting up your investment, there is an option to enter your IRA or 401K account information.
What is the return?
A: That depends on the success of the project and what the crowdfunding preferred interest offer is. Each project has a fully disclosed financial structure for your review. Your investment is at risk, as you have an ownership or lien position in real estate that can change in value.
As an example, our first project 3455 E Sells, the return on $1000 was calculated using 3 different resale value scenarios.
$649,000 would generate $20 in preferred return at a 6% preferred annual interest rate and a profit participation return of $7. Resulting in a 2.72% return annualized to 8.04%.
With a sale price of $699,000 a $1000 investment will generate the same $20 in preferred return at 6% preferred annual interest rate and a profit participation return of $42. Resulting in a 6.24% return annualized to 18.42%.
The third scenario is at a sales price of $749,000, so a $1000 investment will generate $20 in preferred return at 6% preferred annual interest rate and a profit participation return of $77. Resulting in a 9.76% return annualized to 28.79%.
How much can I invest in a project?
A: $1,000-10,000 unless you are an accredited investor per SEC guidelines, then you can invest more.
The regulations for accredited investors vary and are often defined by the local market regulator or a competent authority. In the United States, from a federal standpoint, the definition of accredited investor is put forth by SEC in Rule 501 of Regulation D.
Ok I’m ready, what is needed to get started?
- Full Legal Name of AZ Resident
- Contact information (phone, email, address)
- How much you want to invest? 1 share Minimum equals $1,000 up to $10,000.
- US Bank account number (ACH- Electronic Check)
- If you have a financial advisor (name and email address)
- Social Security Number and Date of Birth
- Annual Income and Net Worth
- Sign the Subscription Agreement
What if I have a Finical Advisor?
A: We would be glad to communicate with or cooperate with your advisor(s). When you click INVEST NOW, you will be directed to our third part escrow service. During the 1st Step in setting up your investment, there is an option to enter your finical advisor contact information.
When do I get my money back?
A: When the project is sold & the bookkeeping is completed. Our estimated time frame our first project 3433 E. Sells is 7-8 months from the crowdfunding “cut-off” date.
What do I own?
A: You actually own a Preferred Membership in a limited liability company controlled by the Sponsor. You will get an electronically signed subscription agreement that shows all the details of your investment.
I’m I investing directly in a property?
A: No, you are buying a security. You actually own a Preferred Membership in a limited liability company controlled by the Sponsor. You will get an electronically signed subscription agreement that shows all the details of your investment. IF you would like to preview the agreement, please contact us via email and we can send you a copy.
How am I going to get updated on the project?
A: Our plan is to give monthly updates via email once the minimum investment is reached & the first part of the project is funded. We suggest keeping up with the projects on our Facebook page or on our website www.PhixNPhlip.com as we will have updates available on these sites.
A: You will receive an email with an acceptance. All subscription agreements must be signed by the issuer and are all reviewed prior to acceptance. In order to be in compliance with SEC rules, we may need to request additional information as to the investment source or identity.
How will I know when the next project is available?
A: If you have an investment with PhixNPhlip, you will receive an email with a solicitation, unless you have requested not to receive the updates. You can keep updated on our social media sites on Facebook, YouTube, instagram or Twitter.
How much do you charge for the investment?
A: We do not charge you for any fees or a platform service charge. No, there are no charges for our crowdfunding services.
Do you disclose your profits?
A: Yes, we disclosure all of our purchase costs. Estimate the repairs and fees associated with the project. Then provide you with a market report and three resale scenarios to give you the best calculations on your return investment.
We disclose the financials related to a project for your review (see investment structure Blog).
What if I have a question?
A: Call us Direct at 602-694-3677 or send us an email at PhixNPhlip@gmail.com
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Ok, what do you get out of this?
A: If successful, we have a success fee included after the investor receives a minimum of 6% preferred return & then after the success fee, we get 60% of the additional profits that are split with the investor who receives 40%
Do you offer a referral fee?
A: No, for now the securities rules do not allow this in the manner this project is being funded
Is this your first crowdfunding project?
A: Yes this is our first crowdfunding offering, NOT our first real estate project. This is an opportunity to invest in one of our projects, using our experience of over 25 years in the Arizona real estate market. We have a track record of success and are now offering crowdfunding to investors with as little as $1000 to invest in a real estate project.
Are the Different Types of Crowdfunding?
A: Yes there are four types of crowdfunding
- Reward based; a donation to a cause and get a reward
- Donation; nothing in return
- Debt; borrow money to be paid back at a later date, with interest
- Equity; part of a shareholder percent of business
PhixNPhlip is an Equity crowdfunding platform. The project has already secured financing in before we offer a share percentage. We are not looking to borrow money and there are no fees or interest.
What is The Basic End-to-End Process?
A: Phix and Phlip uses our experience from over 25 years in Arizona to identify and vet all of our projects. We purchase and secure financing for the project, even if we don’t raise any funds from the crowdfunding opportunity. We then offer the crowdfunding project shares, until all shares are sold or a specific date. The return is a 6% preferred interest plus profit sharing (see details on projects to confirm investment structure). You will get updates on the project including timing and distributions. Once the project has sold and bookkeeping is reconciled, distributions will be made and the books closed. You can then choose another project to reinvest in or withdraw. You have control of how many projects you participate in. Our goal is to reach 10-18% annualized return, have periodic liquidity, and have a number of projects for you to choose from.
How Long Before I See My ROI?
A: less than a year. We will provide you with project updates periodically that will include estimated results and timing of distributions.
What are the tax implications of investing with PhixNPhlip?
A: The same as investing in real estate and we are not tax advisors, so would recommend that if you have any tax related questions to please contact a tax professional. Annually, we will issue a tax document schedule K1 delivery – per subscription agreement item (ii)
I’m not a U.S. citizen, can I still invest?
A: No, must be a resident of AZ (& therefore the USA)
What is an Intrastate Offering?
A: An Intrastate Offering (“IO”) is a term that refers to an offering of securities within a specific state, in this case, Arizona. An IO can assist a business or nonprofit raise capital from both accredited and non-accredited investors. Using an IO in the manner set out by this Offering is also known as crowdfunding. A business or nonprofit can market and advertise its offering publicly by any means it chooses – through advertising in newspapers and magazines; at public events and private meetings; and on the internet and through social media channels.
What happens to our investments if the Company doesn’t raise the minimum?
A: Subscribers will first have a choice to receive their investments back. Woodglen has committed to complete The Project whether or not the Offering is successful, so Woodglen would then have the choice to subscribe to the minimum, at which time Subscribers would also have a choice to receive their investment back.
What happens when the Company raises the minimum?
Subscribers will be notified that the Company is now active and we will close the minimum Offering. They will also be notified if they have been accepted and become Preferred Members of the Interests.
Who regulates this type of investment offering?
The Arizona Corporation Commission Securities Division is the regulatory agency for this Offering in Arizona.
Is my personal liability limited to my investment or could there be a cash call?
Yes, your liability is limited to your investment into the Company. There will be no cash calls.
Can I invest more in the future?
No, this is a single asset Offering expected to liquidate when this House is sold and The Project is completed. However the Manager of the Company anticipates being active in Arizona in this type of Offering.
Can I invest as much as I’d like or are there limits?
The State of Arizona has limits on individual investments as outlines in the Offering Memorandum. Certain prospective investors can invest between $1,000 and $10,000. Other investors can invest $10,000 or more, but have additional qualifications to meet