Frequently Asked Questions

ASICON GENERAL

What is ASICON and how does it work?

ASICON is an online marketplace for real estate investing. We are here to connect investors who want to invest in real estate with institutional quality real estate investments.
Through the ASICON platform, investors have the opportunity to invest in real estate opportunities online through a private, secure website. Investors can browse investments, review due diligence materials and sign legal documents securely online. Once invested, investors have access to an investor dashboard, giving them 24/7 access to watch how their money is working for them.
Real estate companies looking for equity capital can do so by filling out an online application, creating an account and going through our due diligence process.
We are here to simplify real estate investing through using technology.

How do I get started on ASICON?

If you want to invest in commercial real estate with us, you can start here.
If you are looking for equity for your real estate project, you can start by completing an application here.

Who is ASICON?

ASICON is a team of professionals, with experience in real estate, technology and finance. You can learn more about us here.

Is ASICON secure?

ASICON is committed to protecting the privacy and confidentiality of information. This includes but is not limited to physical and electronic procedures to protect information from loss, misuse, damage or modification by unauthorized access. Some of the central features of our security program are:
• Internal and external review of our public and non-public Internet sites and services;
• The use of specialized technologies such as firewalls and encryption;
• Rigorous multi-stage testing of the operability of products and features before they are exposed to the Internet as well as updates for known vulnerabilities;
• Monitoring of our systems infrastructure to detect weaknesses and potential intrusions.

Who makes up the ASICON team? Where are we located?

We have a team of professionals with experience in real estate, credit, technology, finance, and regulation. You can read more about our leadership here.
We are headquartered in Los Angeles, CA. If you need our contact information, you can find it here.

How is ASICON capitalized?

ASICON is backed by various venture capital firms and additional strategic investors such as real estate firms. In March 2014, we completed our first major capital raise for $9 million, which was led by Canaan Partners, a prominent venture capital firm and one of the first investors in LendingClub. In July 2015, we raised an additional $35 million from Sorenson Capital, Canaan Partners, and additional strategic partners.

How much money has been raised and invested through ASICON?

To date, investors have invested over $600 Million through RealtyMogul, financing 300+ properties valued at over $2.8 Billion.

GENERAL INVESTOR QUESTIONS

Who invests through ASICON?

ASICON investors include high net worth individual investors and institutional investors including family offices and registered investment advisors. Non-accredited individual investors can also invest in either of our two real estate investment trusts (“REITs»).

Who is eligible to invest through ASICON?

Accredited investors have access to all investments on ASICON and non-accredited investors are eligible to invest in the ASICON REIT I and ASICON REIT II offerings, subject to some legal limitations.
In addition to ASICON REIT I and ASICON REIT II, accredited Investors can invest in private placements on the ASICON platform. 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:
• Earn an annual income per individual of over $200,000 per year ($300,000 per couple) with the expectation of maintaining such level of income in the future.
• Have a net worth of more than $1 million (individually or jointly), excluding the value of a primary residence.
• Be a bank, insurance company, registered investment advisor, business development company, or small business investment company.
• Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
• Be a business in which all the equity owners are accredited investors.
• Be an employee benefit plan, a trust, charitable organization, partnership, or company with total assets in excess of $5 million.

What are the benefits of using ASICON?

ASICON makes it easy for investors to invest in commercial real estate without having to do all of the work.
We provide access that was historically limited and thoroughly underwrite every investment offered on our website. We spend countless hours sourcing real estate investments and allow investors to invest in real estate with dramatically smaller investment sizes. And we make the process frictionless – allowing you to screen investments online, sign legal documents online, and have access to all your documents in one place on your investor dashboard.
For institutional investors, we are a source of efficient and technology-based production, helping them diversify their portfolio while getting access to a wide suite of commercial debt and equity investments.

How is ASICON's approach different than its peers?

ASICON employs a different approach to investment. Some of our peers are highly transaction focused. They want to list as many deals as possible, and, in doing so, may not have had the opportunity to diligently underwrite each investment. Our focus at RealtyMogul is to put every deal to the test against our due diligence criteria. On average, for every 1,000 deals we scrutinize, only one may meet all the criteria of our rigorous underwriting process. We are thinking about the business in terms of decades as we know real estate investing is a long-term strategy. As such, we do not offer as many investments as some other online real estate investing peers. We focus on quality over quantity and evaluate every deal. Somebody from the RealtyMogul underwriting team also steps foot on every property before we invest.
And we limit what we invest in. Unless it is particularly compelling, we rarely make an investment in ground up development and instead focus on potentially cash flowing commercial real estate where we believe there may be a better risk/reward equation. This focus on quality means that we may have fewer asset management problems. Not every real estate transaction is created equal and not everything in our portfolio is perfect, but we believe we may have fewer issues than our peers due to our defensive investing nature. Fewer asset management problems typically means lower expenses in managing our existing portfolio.

How does an investment opportunity get listed on ASICON?

Real estate companies may list their investment opportunities on the ASICON platform after going through an in-depth review process.
For equity investments, the ASICON team reviews the real estate company materials and determines whether the company and the investment meet the minimum requirements to be listed on the platform. The process includes a review of the property, market, target returns, and a review of the track record, reputation and quality of the real estate investment company. When reviewing the real estate company, each principal undergoes a background and criminal check to mitigate the risk of fraud. Lastly, somebody from the ASICON team strives to step foot on each property. We reject over 95% of investments submitted. At ASICON, we look for transactions that provide cash flow to investors as quickly as possible. Some properties may have some level of vacancy or have the ability for our real estate company partner to add value and increase cash flow over the life of the investment. We typically fund apartment buildings, self-storage facilities, mobile home parks, office and multi-tenant industrial buildings and retail shopping centers.

Are the investments secure?

Although no investment is guaranteed, one benefit of investing with ASICON is that you are investing in physical assets around the United States. Your investment is in an actual property as opposed to a stock or bond or other non-physical asset.

Are these investments risky?

Yes. Similar to investing in the stock market, there is no guarantee when you are investing in real estate. The real estate market has economic cycles and it is difficult to know how and when the economy will change.

Why am I being asked to supply additional information for accreditation verification?

Individual private placement investments at ASICON are offered under Regulation D (Reg D) of the Securities and Exchange Commission (SEC). Within Reg D are two rule classifications of offerings: Rule 506(b) and Rule 506(c). These rule classifications dictate how widely an offering can be marketed to an investing audience, whether a prior relationship with the investor must be established in order solicit an offering, and the method of verifying investor accreditation.

As an investor, do I have to go through a due diligence process?

Prior to making an investment on the ASICON platform, investors are required to answer qualification questions and complete know your customer (“KYC”) and anti-money (“AML”) requirements. Our technology will guide you through this process. We never run credit checks on investors.

Is there an investment minimum?

Yes. The minimum investment is different for each investment, but can be as low as $1,000.

Are there fees for investors?

Joining ASICON and browsing the marketplace is free. For those who choose to invest, there are fees associated with each investment. The fees depend on the type of investment (investing in a loan or investing in equity) and the nature of the transaction. In addition to administrative and legal expenses, the fees will cover the ongoing reporting and communications for the investments. As we are big believers in transparency, you can find the specific fee structure for each deal when you browse through our investment opportunities.

How does the investment process work?

After you have created an account on the ASICON platform and chosen which investment you would like to invest in, our technology will guide you through the subscription process. You will be able to sign legal documents online and select a bank account to fund your investment with. The investment is not final until all legal documents are signed and funding has been contributed and cleared. When an investor makes their investment, the money is held securely at a US bank. Once the fundraising target is met and the real estate transaction is completed, the investor funds are transferred and the investment is now active.

How do investors transfer funds into the investment?

Standard ACH transfers can be made from an investor’s bank account for amounts up to $100,000. Amounts larger than $100,000 are made using a wire transfer. For each investment opportunity there will be specific account and routing numbers that we will provide to the investor so that funds are properly received into the investment.

How are legal documents handled on the ASICON platform?

All legal documents can be sent and signed electronically through our website. This allows for more efficient and seamless transfer of documents between you and the sponsor of the investment, while maintaining the authenticity and security of your information. Investments are finalized once proper legal documentation is accepted, funds are confirmed received, and you are provided with completed counter-signatures.

Can I use a self-directed IRA account or other type of retirement account for my investments?

Our real estate investment trusts (“REITs”), do accept investments from self-directed IRA accounts but it will depend on your custodian’s processes/procedures. Our two requirements are that the custodian be able to process documents via electronic signatures, and that it be able to process contributions and distributions via ACH transfer payments. Unfortunately, some custodians have difficulty meeting these conditions; inquire of your current custodian whether they can work with these requirements, and if not, we can refer you over to other providers who can meet these guidelines.

How will investors be updated about their investment status?

Investors will be able to view real time updates of their investments when they login to the site and view their investor dashboard. This is their hub of information, providing comprehensive metrics about their distributions to date, upcoming milestones, and overall return on investment. Investors are notified by email when distributions are sent to their bank account.

Once invested, how do investors get regular updates about their investments?

ASICON will work with the real estate company to provide timely updates shared with all investors at least quarterly. Updates will be provided via email and via the investor dashboard. In addition, investors will receive tax documents every year that they have a distribution from a real estate investment on ASICON.

How will my investment cash flow allocations be distributed?

If you invest in ASICON REIT I, we seek to distribute on a monthly basis.
If you invest in ASICON REIT II, we seek to distribute on a quarterly basis.
For all other investments, please review the description of that individual investment.
Distributions are typically sent to the same bank account that was used for your original investment. However, we can accommodate changing a distribution bank account by request. Any changes to a distribution account will require you to prove valid ownership of the new account for compliance purposes. Distributions are never guaranteed in amount or timing and you should carefully read the offering documents on the specific deal you are interested in to fully understand the projected distributions and what risks are involved.

Is my investment liquid?

No. The real estate investments found on ASICON are private transactions in physical properties around the United States. The investments are not traded on public stock exchanges and cannot be easily sold or traded.
You may be able to resell your investment security in a private transaction subject to restrictions that are specific to each investment and under the Securities Act of 1933. Since the resale restrictions on RealtyMogul can be very limiting, you should not invest with the expectation of reselling your investment.

When will I get my investment back?

Different properties have different expected hold periods. A hold period is the anticipated time investors will be involved with the investment until the underlying property is re-sold or the loan on it is paid off. It is important to read the offering documents for each investment opportunity for a deeper understanding of the hold period for each investment.

INVEST IN EQUITY

What types of properties are available through equity investments?

ASICON offers access to a variety of property types including, but not limited to, multi-family, office, industrial, self-storage, retail and medical office.

What is the difference between a 506(b) and 506(c) offering?

Rule 506(b):
Rule 506(b) allows investors to “self-verify” their accreditation information, certifying the information they have provided is accurate and truthful. Offerings can only be solicited to investors with existing, substantive relationships – in the RealtyMogul case, this would be investors signed up on the platform and approved for accredited access prior to an offering being launched. The offering cannot be broadly (“generally”) solicited to new investors outside of the platform.
Rule 506(c):
Rule 506(c) does allow for general solicitation of an investment offering, without the requirement for an existing relationship with the investor prior to soliciting the investment. Thus, the offering can be generally advertised both to existing investor relationships as well as new potential investors that haven’t yet created an account with RealtyMogul.
Along with the more lenient allowance for general solicitation comes a more onerous requirement for accreditation verification, however. Investors cannot “self-verify” under Rule 506(c) – there must be “reasonable steps” taken to verify the accreditation of each investor. The accreditation verification can be accomplished by one of the following:

• Providing tax returns to prove accreditation by income
• Providing verification of net worth (via brokerage or bank statements) net of any liabilities (typically verified through a “soft” credit check)
• Providing written confirmation from an attorney or certified accountant

How are equity investments structured?

Investors are typically purchasing shares in a Limited Liability Company (“LLC”) established by the Sponsor specifically for ASICON investors. That LLC in turn invests into an LLC that holds title to the real property.

What is a pledge for an individual private placement offering?

Pledging is a process we use at ASICON to take indications of interest from investors in an investment prior to the actual funding of that transaction. The pledge is non-binding, meaning there is no commitment to the investment by creating a pledge.

Can I invest in an offering without pledging first?

Investment funds will be taken on a first come, first served basis, which means we take funds exclusively from pledged investors until we reach capacity in the transaction. In the event that we do not reach capacity strictly from pledged investors, the offering opens for all investors to fund the investment.

What is the waitlist for an investment opportunity?

If an investment reaches full capacity, the offering moves to the Waitlist stage to prevent further pledges or investments. You are welcome to place yourself on the waitlist and should any investment capacity become available in the offering, our Investor Relations team will reach out to you in the order that you joined the waitlist. There is no obligation to invest once contacted.

When I invest in equity investments on the ASICON platform, what do I own?

When you invest in an equity opportunity, you are typically purchasing shares of an LLC as a limited member. In turn, that LLC owns (directly or indirectly), along with the real estate company and other investors, a share of a joint venture entity that owns a specific investment property, like a specific apartment building. An LLC gives you liability protection, shielding your personal assets from the investment.

Who makes decisions in an LLC?

Decisions in an LLC are governed by a document called an “operating agreement”. While every operating agreement is slightly different, they usually include a manager (who may also be a member) and limited members. The manager typically makes all of the day-to-day decisions and the limited members act as passive investors on the transaction. The manager can determine how much cash to distribute to the limited members versus how much to hold in reserve and assess possible sales for the property. There are certain activities that might mandate a vote by the limited members and the limited members can typically take action if the managing member defaults on the terms of the agreement or is grossly negligent.

Who makes decisions in the LLC that investors contribute to?

The real estate company, also known as the “sponsor” will typically make decisions in the LLC. In some instances, RM Admin, a wholly owned subsidiary of ASICON, may have decision making rights. Please review the specific offering materials for each investment to fully understand the structure and the duties of all entities involved.

How often should distributions be expected?

Distributions depend on the specific investment, but are typically provided to equity investors each quarter. Please review the expected distribution schedule for each investment before making an investment. No distributions are guaranteed.

What if I invested in equity and more money is needed for the property in the future? Am I obligated to invest more as an equity owner?

ASICON investments typically do not have capital calls. A capital call is where the investor is required to commit more money to the property, beyond the initial investment. Rather than requiring an additional investment, it is possible that investors will be diluted if more money needs to be raised. While this is typically the case with equity investments offered on ASICON, please check the offering materials for each investment to fully understand your liabilities as an investor.

What are the tax implications of investing in Equity opportunities with ASICON?

One of the benefits of investing in real estate equity through limited liability companies (LLCs) is that LLCs can be treated as partnerships for tax purposes. Partnerships generally are not taxed at the entity level (other than annual franchise taxes and filing fees) and can “pass through” applicable items of income, loss and depreciation to their members.
Non-cash depreciation deductions can shelter or eliminate the amount taxable income that may be otherwise passed through to an investor from a real estate equity investment, particularly in the early stages of the investment. As a result, cash distributions received by an investor, in a year when there is no corresponding pass-through of taxable income (again, due to depreciation deductions), may result in lower or deferred taxes.
The special purpose entity (an LLC) you own when you invest in an equity transaction reports your annual share of income and loss and distributions on federal and state K-1s that you can then use to prepare your tax return. While the special purpose entities (the LLCs) that are formed for each equity transaction typically are Delaware entities, there may be filing requirements and tax liabilities in other states depending on the details of a particular transaction, your state of residence, and the location of the investment property.
ASICON, Co. and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. See offering documents for additional details, disclosures, and disclaimers.

INVEST IN ASICON I

What is ASICON REIT I?

ASICON REIT I is a limited liability company formed to invest in and manage a diversified portfolio of commercial real estate investments, such as loans, equity in commercial real estate ventures, and other real estate-related assets.
ASICON REIT I is a registered, non-traded REIT. That means that it is registered with the Securities and Exchange Commission, but is not traded on a stock exchange.

What types of properties or investments go into ASICON REIT I?

ASICON REIT I can invest in a variety of property types, including but not limited to, multifamily, office, industrial, self-storage, and retail real estate opportunities. ASICON REIT I can invest in various commercial real estate-related equity and debt assets across these different property types.

Who can invest in ASICON REIT I?

ASICON REIT I is available to both accredited and non-accredited investors. For non-accredited investors, limitations based on the investor’s annual income or net worth apply to the amount that may be invested.

What is the minimum amount I can invest in ASICON REIT I?

Investment minimums for ASICON REIT I differ based on account type.
For most investors, the minimum investment is $1,000 and investors may invest additional capital at a minimum of $1,000.
For Self-Directed IRA (“SDIRA”) investors, the minimum investment is $1,000 and $1,000 thereafter.
If you invest with a Registered Investment Advisor, the minimum is $1,000 for the first transaction and $1,000 thereafter.

How liquid is an investment in ASICON REIT I?

Public nontraded REITs are not liquid investments, which means you may think of an investment in ASICON REIT I as a long-term investment into real estate. We have, however, adopted a Share Repurchase Program whereby we alone may purchase shares back from investors. The Share Repurchase Program is designed to provide our shareholders with limited liquidity on a quarterly basis for their investment in ASICON REIT I shares, subject to availability of capital.
After 12 months of ownership, ASICON may repurchase your shares at the most recently announced NAV per share multiplied by the Effective Repurchase Rate, a discount based on how long the shares have been held.
The Effective Repurchase Rate is based on the stock purchase anniversary as follows:
Share Repurchase Anniversary (Year) Effective Repurchase Rate(1)
Less than 1 year (Lock-up) 0%
1 year until 2 years 98%
2 years until 3 years 99%
3 or more years 100%
Death (Exception Repurchases) 100%
(1) As a percentage of the Repurchase Base Price per share. The repurchase price will be rounded down to the nearest $0.01.
Our REIT Manager may in its sole discretion, amend, suspend, or terminate the share repurchase program at any time. Reasons we may amend, suspend or terminate the share repurchase program include (i) to protect our operations and our remaining shareholders, (ii) to prevent an undue burden on our liquidity, (iii) to preserve our status as a REIT, (iv) following any material decrease in our NAV, or (v) for any other reason.
Additional details regarding ASICON REIT I, Inc.’s Repurchase Program are found in the Offering Circular.

How is investing in ASICON REIT I different from other investment opportunities offered on the ASICON Platform?

The ASICON Platform currently offers individual real property-related investments as private placements to accredited investors only. The ASICON Platform allows accredited investors to review due diligence materials for individual transactions and invest in one transaction at a time. Investing in ASICON REIT I is different since investment decisions are made by its Manager, RM Adviser, LLC, and you are investing in a diversified portfolio and not a specific transaction or property. Additionally, ASICON REIT I is accessible to both accredited and non-accredited investors and offers a lower investment minimum than some of the transactions offered on the ASICON Platform. RM Adviser, LLC charges a 1% asset management fee for managing ASICON REIT I and its investments, whereas the other investment opportunities offered through the ASICON Platform may charge fees that are higher or lower. Finally, ASICON REIT I is set up as a “blind pool” REIT, which means that it is not committed to acquiring any particular investments with the net proceeds of its offering. Investing in ASICON REIT I can lead to greater diversification because ASICON REIT I intends to invest its assets in multiple real estate opportunities. However, unlike other investments on the ASICON Platform, a purchaser of common shares in ASICON REIT I may not know what investments ASICON REIT I will make with its assets at the time the investor purchases common shares in ASICON REIT I.

Who is on the Manager team of ASICON REIT I?

ASICON REIT I is managed by RM Adviser, LLC, a SEC registered investment adviser and wholly-owned subsidiary of ASICON, Co. RM Adviser, which manages ASICON I’s day-to-day operations, will have access to the experienced team of real estate finance professionals employed by ASICON, Co., including Jilliene Helman, its Chief Executive Officer. Many of the senior executives and origination professionals at ASICON have deep experience in the commercial real estate sector and have been in leadership roles at financial services institutions for many years. Collectively, these professionals have approximately 200 years of combined direct experience in the commercial real estate business, and have managed more than $4 billion of originations and more than $8.5 billion in underwritings in commercial real estate loans and equity investments. ASICON REIT I expects to benefit from the knowledge and industry contacts, experience and judgment that these professionals have accumulated over numerous real estate cycles.
The credit team of ASICON and its affiliates is very experienced in reviewing and underwriting commercial real estate investments. This team has substantial experience in reviewing and underwriting commercial real estate investments and has adopted approaches used by real estate finance industry leaders in its analysis of real estate capital structures and financial strategies, and these approaches will be brought to bear for ASICON I’s benefit.

What services will the Manager perform?

The Manager performs the following services: investment advisory and acquisition services (including performing due diligence on ASICON I’s investments), offering services, asset management services, accounting and other administrative services, shareholder services, financing services, and disposition services.

How does ASICON decide which investments go into the fund and which don’t?

ASICON I pursues the investment strategy using the criteria described in its Offering Circular. Some opportunities may arise which could be allocated to either ASICON I or the RealtyMogul Platform. In these instances, any potential debt investment exceeding $1,000,000 and equity investment exceeding $1,500,000 will first be made available to ASICON REIT I. If ASICON REIT I chooses not to invest and the investment opportunity meets the investment criteria for ASICON, then those investment opportunities will be made available to other investors through the ASICON Platform. ASICON REIT I may, where the investment committee of its Manager determines that the size of an investment would create undue concentration in its portfolio or that the entire investment would otherwise be unsuitable for the REIT, permit a portion of an investment to be sold on the ASICON Platform.

What is a pledge for a ASICON offering?

ASICON REIT offerings may occasionally go into the Open for Pledging stage if we are currently at cash capacity relative to invested property assets. We want to ensure invested dollars in the REITs are, as readily as possible, invested into accruing underlying property investments and not sitting idle due to a cash imbalance. The pledge is non-binding, meaning there is no commitment to the investment by creating a pledge.

What are the differences between ASICON REIT I and ASICON REIT II?

The main differences between these two public, non-traded REITs are seen in their primary investment objectives.
ASICON REIT I’s primary objective is to pay attractive and consistent monthly cash distributions through diversified investments into multiple commercial property types. ASICON REIT I invests into the debt, preferred equity, and equity of these properties.
ASICON REIT II’s primary objective is to realize capital appreciation in the value of our investments over the long term, and to pay attractive and stable cash distributions to stockholders. ASICON REIT II exclusively invests in multifamily properties and does so in the form of equity or preferred equity.
To learn more, view the infographic here.

INVEST IN ASICON II

Who can invest in ASICON REIT II?

ASICON REIT II is available to both accredited and non-accredited investors. For non-accredited investors, limitations based on the investor’s annual income or net worth apply to the amount that may be invested.

What is the minimum amount I can invest in ASICON REIT II?

Investment minimums for ASICON REIT II differ based on account type.
For most investors, the minimum investment is $5,000 and you may invest additional capital in increments of $1,000.
If you invest out of a self-directed IRA (“SDIRA”) account, the minimum is $5,000 for the first transaction and $1,000 thereafter.
If you invest with a Registered Investment Advisor, the minimum is $5,000 for the first transaction and $1,000 thereafter.

How liquid is an investment in ASICON REIT II?

Public nontraded REITs are not liquid investments, which means you may think of an investment in ASICON REIT II as a long-term investment into real estate. We have, however, adopted a Share Repurchase Program whereby we alone may purchase shares back from investors. The Share Repurchase Program is designed to provide our shareholders with limited liquidity on a quarterly basis for their investment in ASICON REIT II shares, subject to availability of capital.
After 12 months of ownership, ASICON may repurchase your shares at the most recently announced NAV per share multiplied by the Effective Repurchase Rate, a discount based on how long the shares have been held.
The Effective Repurchase Rate is based on the stock purchase anniversary as follows:
Share Repurchase Anniversary (Year) Effective Repurchase Rate(1)
Less than 1 year (Lock-up) 0%
1 year until 2 years 98%
2 years until 3 years 99%
3 or more years 100%
Death (Exception Repurchases) 100%
(1) As a percentage of the Repurchase Base Price per share. The repurchase price will be rounded down to the nearest $0.01.
Our REIT Manager may in its sole discretion, amend, suspend, or terminate the share repurchase program at any time. Reasons we may amend, suspend or terminate the share repurchase program include (i) to protect our operations and our remaining shareholders, (ii) to prevent an undue burden on our liquidity, (iii) to preserve our status as a REIT, (iv) following any material decrease in our NAV, or (v) for any other reason.
Additional details regarding ASICON REIT II, Inc.’s Repurchase Program are found in the Offering Circular, including all supplements.

How do you decide which properties or investments go into ASICON REIT II and which are offered to the ASICON Platform or other ASICON REIT offerings?

Investment opportunities may arise that could be allocated to the ASICON Platform, the ASICON REIT II or another ASICON REIT offering. In these instances, investments may be distributed as follows:
• Equity investment opportunities under $1,500,000, excluding preferred equity, may be allocated to the ASICON Platform.
• If the REITs have capital ready to invest, all other investment opportunities may be allocated based upon the appropriateness of each investment opportunity to each REIT’s investment policy

If an investment opportunity is appropriate for the ASICON Platform or any of the ASICONs, the investment committee may allot the new opportunity based on which entity has gone the longest period without making an investment.
If the investment committee determines that the size of an investment would create undue concentration in the ASICON REIT II portfolio or that the entire investment would otherwise be unsuitable, they may permit a portion to be sold on the RealtyMogul Platform to acquire it. They may also choose to deviate from this policy if it impacts the best interest or regulatory requirements of ASICON REIT II or another ASICON REIT offering.

Who is on the Management Team of ASICON REIT II?

ASICON REIT II is managed by RM Adviser, LLC, a SEC registered investment adviser and wholly-owned subsidiary of ASICON, Co. RM Adviser, which manages ASICON REIT II’s day-to-day operations, has access to the experienced team of real estate finance professionals employed by ASICON, Co., including Jilliene Helman, its Chief Executive Officer. Senior executives and origination professionals at ASICON have experience in the commercial real estate sector and have been in leadership roles at financial services institutions for many years. Collectively, these professionals have approximately 200 years of combined direct experience in the commercial real estate business, and have managed more than $4 billion of originations and more than $8.5 billion in underwritings in commercial real estate loans and equity investments.
The credit team of ASICON and its affiliates is experienced in reviewing and underwriting commercial real estate investments. The team has adopted approaches used by real estate finance industry leaders in its analysis of real estate capital structures and financial strategies.
Although the Manager, RM Adviser, LLC, manages the day-to-day operations, ASICON REIT II operates under the direction of its Board of Directors, a majority of whom are independent directors. Flynann Janisse has served as an independent director of ASICON REIT II since July 2017. She has several decades of experience in asset management with an emphasis on the development and implementation of social services programs for service-enriched affordable housing. She currently serves as Executive Director of Rainbow Housing Assistance Corporation, President and Executive Director of Equality Community Housing Corporation, and President and Chairman of the Board of Rainbow Housing Texas, Inc.
Louis S Weeks III has served as an independent director of ASICON REIT II since July 2017. He has been involved in commercial real estate and finance for more than 35 years, most recently as Founder and Principal of SeaburyCoxe Advisors, LLC, which consults in financing and investing for commercial real estate projects nationwide.

What services does the Management Team provide?

The Manager performs the following services:
• Investment advisory and acquisition services (including performing due diligence on ASICON REIT II’s investments);
• Asset management services;
• Accounting and other administrative services; and
• Shareholder services, financing services, and disposition services.

Where can I get a summary of the ASICON REIT II offering and a full list of questions and answers about the offering?

For a summary of the ASICON REIT II offering and a full list of questions and answers about the offering, please refer to the Offering Circular.

What is ASICON REIT II?

ASICON REIT II is a Maryland corporation formed to invest in both preferred and common equity of multifamily apartment buildings throughout the United States. The REIT’s objective is to make investments into apartment communities that follow one of two core criteria:
• Demonstrated consistently high occupancy and income levels across market cycles; and/or
• Offer value add opportunities with appropriate risk-adjusted returns and the potential for significant value appreciation.

What types of properties or investments go into ASICON REIT II?

Common equity and preferred equity investments in multifamily apartments.
Common Equity: Equity ownership in a piece of real estate that typically receives a preferred return and a share of the potential appreciation upon sale.
Preferred Equity: Equity ownership in a piece of real estate with a priority of payments on cash flow and upon liquidation, typically receives a fixed coupon that is higher than the properties distributable cash flow and in return does not share in any of the potential appreciation upon sale.

What are the differences between ASICON REIT II and ASICON REIT I?

The main differences between these two public, non-traded REITs are seen in their primary investment objectives.
MogulREIT II’s primary objective is to realize capital appreciation in the value of our investments over the long term, and to pay attractive and stable cash distributions to stockholders. ASICON REIT II exclusively invests in multifamily properties and does so in the form of equity or preferred equity.
ASICON REIT I’s primary objective is to pay attractive and consistent monthly cash distributions through diversified investments into multiple commercial property types. ASICON REIT I invests into the debt, preferred equity, and equity of these properties.
To learn more, view the infographic here.

INVEST IN 1031

What is a 1031 Exchange?

A 1031 exchange is a strategy for deferring the capital gains tax from the sale of a property. By exchanging a relinquished property for like-kind real estate, owners may be able to defer their federal taxes and use the proceeds for the purchase of replacement property.

What is “like-kind property”?

Generally any form of property held for business or investment purposes qualifies including Apartment Buildings, Single-Family Rentals, Vacant Land, Office Buildings, Self-Storage Facilities, Shopping Centers, and Hotels. These property types may be 1031 eligible properties.

What does it mean to be “1031 eligible”?

Not all real estate investments are eligible for 1031 exchanges. In order for your investment in real property to be 1031 eligible you must have a direct ownership in the underlying real estate. Debt investments aren’t eligible because they are interests in a promissory note, not the underlying real estate. Similarly, partnership interests (including LLC’s) where an investor owns a share of a partnership interest instead of a share of the underlying real estate would be ineligible. However, per the IRS’s Revenue Ruling 2004-86, ownership of a beneficiary interest in a Delaware Statutory Trust does qualify to be part of an investor’s 1031 Exchange.

What is a Delaware Statutory Trust Property?

Commonly known as “DST”, this entity is often used to hold title to real estate similar to an LLC. Instead of owning a membership interest in an LLC, a DST investor owns a beneficial interest in the DST. Also like an LLC, the entity shields the investor from individual liability. However, unlike an LLC, a DST 1031 property will qualify as a “like kind” exchange replacement property for a 1031 exchange per Internal Revenue Ruling 2004-86.

What are the downsides of investing in a DST?

The DST is typically managed by the DST Trustee and the beneficial owners do not have voting right like they would typically have in an LLC. Instead the DST and therefore the real property investments held by the DST are managed by the Trustee, not the investors themselves. Additionally, the IRS established seven prohibitions over the powers of the DST Trustee, which includes the following:
• Once the offering is closed, there can be no future equity contribution to the DST by either current or new co-investors or beneficiaries.
• The DST Trustee cannot renegotiate the terms of the existing loans, nor can it borrow any new funds from any other lender or party.
• The DST Trustee cannot reinvest the proceeds from the sale of its investment real estate.
• The DST Trustee is limited to making capital expenditures with respect to the property to those for a) normal repair and maintenance, (b) minor non-structural capital improvements, and (c) those required by law.
• Any liquid cash held in the DST between distribution dates can only be invested in short-term debt obligations.
• All cash, other than necessary reserves, must be distributed to the co-investors or beneficiaries on a current basis, and
• The Trustee cannot enter into new leases or renegotiate the current leases.

What is a Springing LLC?

DST Agreements often contain a provision that allows the Trustee to convert the DST to an LLC (the “Springing LLC”) if the Trustee determines that the DST is in danger of losing the property due to its inability to act because of the prohibitions in the trust agreement. The conversion to an LLC will allow the Trustee, who becomes the Manager of the LLC to raise additional funds, renegotiate terms of existing debt, and enter into new leases. However, because a membership interest in a Springing LLC is not a 1031 eligible the members (investors) lose their ability to defer capital gains upon the sale of the property owned by the LLC through another 1031 exchange.

What are the basic requirements to complete a 1031 Exchange?

The following is a list of the basic elements involved in typical 1031 Exchanges:
• A Qualified Intermediary, sometimes referred to as a “1031 Accommodator” is used to exchange the funds from the real estate that is sold to the real estate that is purchased.
• Investors identify their replacement properties (typically 3 properties) with their 1031 Accommodator within 45 days of sale of the initial property.
• Investors reinvest 100% of the net sales proceeds from the initial property sale into their replacement properties.
• Investors acquire an equal or greater amount of debt on the replacement properties than they had on their initial properties.
• Investors close on the purchase of the replacement properties within 180 days of the sale of their initial property.
1031 Exchanges can be very complicated and you should consult with your CPA and Attorney before proceeding with an exchange.

Can I invest if I do not currently own a 1031 eligible property?

Yes. “Cash Investors” are investors who use non-1031 money to invest in a 1031 eligible deal. Once they have completed their investment, those investment funds become 1031 eligible and can be used as part of a 1031 exchange in the future.

TAXES

What is Form 1099-DIV?

IRS Form 1099-DIV: Dividends and Distributions is sent to investors annually and used to report dividends earned and capital gains distributions paid to you during the tax year.

Why have I received a Form 1099-DIV?

You received a Form 1099-DIV because you were paid dividends from one or more of your investments in ASICON REIT I or ASICON REIT II. For you to properly report these distributions to the IRS, Form 1099-DIV shows the type of income from distributions you received. The ASICON REIT that sent you a distribution is identified in the top-left box of the form.

What is the difference between the distributions shown in Boxes 1a, and Box 3 in Form 1099-DIV?

Form 1099-DIV shows your ordinary dividends in Box 1a and non-dividend distributions in box 3.
Each year, we are required to report to you the type of income for distributions paid to you, which is determined by comparing the amount of distributions paid by each ASICON REIT with the ASICON REIT’s earnings and profits for a given year. The ASICON REIT’s calculated current and accumulated earnings and profits is the result of a tax calculation, which often differs from the ASICON REIT’s profits calculated in accordance with generally accepted accounting principles and presented to you in such ASICON REIT’s Annual Report on Form 1-K each year.
In the event that any portion of distributions paid to you exceeds earnings and profits in a given year for ASICON REIT I or ASICON REIT II, it is treated as a non-dividend distribution, also referred to as a return of capital. Distributions that do not exceed the calculated current and accumulated earnings and profits are reflected as ordinary dividends.
In general, ordinary distributions (Box 1a) are taxed currently; non-dividend distributions (Box 3), or returns of capital, reduce cost basis or the original purchase value of your shares. In the event aggregate returns of capital received exceeds your original cost basis, then the excess is recognized as a capital gain for the year in which it is received. Therefore, you can adjust the cost basis of your investment each year based on the amount shown in Box 3 “non-dividend distributions” on your Form 1099-DIV. By tracking adjustments to your cost basis each year, you can properly report any gain or loss you experience on the disposition or redemption of your shares.
When you sell your shares, the difference between your adjusted cost basis and final net sale price will be taxable as a capital gain or loss on your tax return. Keeping track of your adjusted cost basis each year can be helpful when you finally sell your investment. Please consult your tax advisor if you need assistance with the calculation of your cost basis or if you have other questions regarding the reporting of distributions that you received.

What is Box 5 Section 199A in Form 1099-DIV, and why is it the same as Box 1a?

If you received any dividends from ASICON REIT I, it was reflected in Box 5 Section 199A dividends. This reports your qualified REIT income and allows a 20-percent deduction for pass-through businesses and was created by the 2017 Tax Cuts and Jobs Act. All of ASICON REIT I dividends were categorized as qualified REIT dividends, which is why Box 5 and Box 1a are the same.
If your taxable income exceeds $315,000 as a married couple filing a joint return, or $157,000 as any other type of taxpayer, the deduction can be subject to additional limitations. Please consult your tax advisor for more information about these limitations.

What is Form 8937 and where can I obtain a copy of the most recent one?

Any corporation (or entity that is taxed like a corporation, including our ASICON REITs), that undergoes a stock split or a merger, pays a stock dividend, pays a return of capital distribution, or otherwise undertakes an “organizational action” is required to either (i) file Form 8937 with the IRS and send copies to its shareholders or (ii) make the required information publicly available on its website. To the extent none of the above described organizational actions are taken, no Form 8937 is required. This form, prepared by our ASICON REITs, will be available by March 1 on our website at www.asicon.ltd

What is a qualified dividend, and will my dividends be qualified?

A qualified dividend is a type of dividend which may be subject to preferential tax rates, which are typically lower than regular income tax rates. Non-qualified, ordinary dividends are taxed at the normal rate based on your ordinary income. Based on the historical operations of the ASICON REITs, all dividends issued by the ASICON REITs are not qualified. If the ASICON REITs pay qualified dividends, we will report them in Box 1b.

What is Form 1099-INT?

Form 1099-INT is used to report income from interest above $10 during the tax year.

Why have I received Form 1099-INT for my ASICON investment?

If you have invested in any Private Offerings that were structured as debt investments, you are considered a lender. The dividends that you received due to the debt investments included interest payments, which are considered taxable income. ASICON is required to file Form 1099-INT on interest over $10 paid during the tax year.

What is a K-1?

A K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income. Partnerships are generally not subject to federal or state income tax, but instead issue a K-1 to each investor to report his or her share of the partnership’s income, gains, losses, deductions and credits. The K-1s are provided to investors on an annual basis so that each investor can include K-1 amounts on his or her tax return.

Will I receive a K-1 for my ASICON investment?

Depending on which investments you own in your portfolio, you may receive a Schedule K-1, K-1 information, or substitute K-1 (collectively referred to as a K-1), a Form 1099-DIV or both. If part of your ASICON portfolio is allocated to one or more of the Private Offerings or Private Placements, you will receive a K-1.

When will K-1s be available to investors?

The real estate company or “sponsor” of each individual transaction is responsible for preparing K-1s for investors. We recommend that all K-1s are sent to investors by April 1 of each year, however, you may be required to obtain one or more extensions for filing federal, state and local tax returns if the sponsor is unable to produce the K-1 in time.

Should I request an extension for filing my tax returns if I have invested in a Private Offering?

While we recommend each real estate company or “sponsor” send out K-1s by April 1 of each year, due to the complexity of these forms, we cannot guarantee that all K-1s will be received prior to tax deadlines. We do recommend that investors discuss filing tax extensions with your tax advisor.

Where do I report the information contained in my K-1?

The information provided to each investor on his or her K-1 is included on the investor’s federal tax return. Typically, an investor must also file state tax returns in the states in which the Private Offering owns property. In some cases, a composite tax filing may eliminate the need for an investor to file at the state level. Please consult with your tax advisor for more information.

How does a K-1 differ from a Form 1099-DIV?

Form 1099-DIV recognizes dividend income equal to cash distributions received. These ordinary dividends are typically treated as ordinary income for tax purposes. For Schedule K-1, investors will recognize their portion of the taxable income from the partnership but typically will not pay tax on their cash distributions. The taxable income allocated to each investor may include ordinary income, dividend income, interest income, rental real estate income, or otherwise. This income retains the same tax character as it had in the partnership and should be reported on each investor’s federal tax return. Please consult your tax advisor for more information.

Do I need to mail in my K-1 to the IRS?

No, the real estate company will submit a Form 1065 to the IRS that will include a copy of each individual investor’s K-1.

If a Private Offering suffers a loss, can I claim that loss as a deduction on my individual tax return?

Yes, you may report your allocable share of any net losses reported by the Private Offering on your individual tax return (Form 1040 or other applicable tax form). The amount that you are entitled to claim as a deduction on your tax return may be less than the total loss amount reported on your K-1. Limitations that apply to deductions include IRS basis rules, at-risk limitations, and passive loss limitations. Generally, you are not allowed to claim your share of the Private Offering’s loss if it exceeds your adjusted basis in the Private Offering for the applicable tax year. Please consult the IRS or your tax advisor for more information.

What is my tax basis in my investment in the Private Offering?

The capital account reflected on your K-1 should approximate your tax basis in your investment. Your capital account is calculated based on your initial investment(s) in a Private Offering plus any allocable net income, less any net losses and/or cash distributions as reflected on your K-1. You may want to keep your own running record of your cost basis in each Private Offering for tax purposes because there are certain instances where your tax basis may differ from your capital account balance. For additional details on how to calculate your basis, please ask your tax advisor.

Do I need to file in each individual state in which I have an investment?

This depends on your state of residence.
Circumstances may vary if you have additional partnership income, expect to receive other K-1s, or in other circumstances. Please consult your tax advisor, CPA, or financial planner for specific guidance.

SPONSOR – RAISE EQUITY

How does the ASICON platform work for real estate companies or “sponsors”?

Through RM Technologies, a wholly owned ASICON subsidiary that operates www.asicon.ltd, sponsors can post their investments on the ASICON platform. The process begins with a thorough review of the real estate transaction and the sponsor. The process includes a review of the property, market, target returns, and a review of the track record, reputation and quality of the sponsor. When reviewing the sponsor, each principal undergoes a background and criminal check to mitigate the risk of fraud. Once approved, sponsors have access to the ASICON platform to post investment opportunities.
Once the transaction is approved, sponsors create a separate LLC for investors on the ASICON platform to invest into. That LLC then invests into the property holding entity. RM Admin, a ASICON subsidiary, signs on as the administrative member of the down-stream LLC to provide ongoing support on the transaction including responding to inbound investor inquiries regarding how to subscribe to the Project, distribution of all annual tax forms, processing distributions, distribution of all quarterly reports and summarizing sponsor information on property performance in addition to responding to investor inquiries regarding sponsor performance as well as the real estate market generally.

How much money do sponsors raise on the ASICON platform?

Typically, sponsors raise between $2 and $10 million using the ASICON technology platform.

What types of investments can sponsors post on the ASICON platform?

We allow sponsors to post investments in multifamily, office, industrial, retail, mobile home parks and self-storage. We do not permit investments in hospitality.
Historically, investments with high cash on cash returns have raised the most capital on the ASICON platform, however we do allow sponsors to post ground-up development investments on a select basis.

What types of sponsors does ASICON work with?

Real estate companies that have at least $25 million in acquisition experience as principal. However, sponsors are evaluated on a case-by-case basis.

Does ASICON run background, criminal and credit checks?

Yes, ASICON requires background, criminal and credit checks for sponsors as part of our due diligence process.

What reporting is required?

ASICON requires quarterly qualitative and quantitative investor reporting.

Does the sponsor interact directly with individual investors?

Sponsors will have the opportunity to record a webinar with the ASICON team for investors to review. Sponsors will also approve each individual investor prior to accepting investor subscriptions. If a sponsor wants to call on specific investors introduced by the ASICON platform, they are able to do so. Typically, most investors will not contact the sponsor directly but will submit any inquiries through the ASICON platform.

Does ASICON have control of sponsor investments?

In some instances, RM Admin, a wholly owned subsidiary of ASICON will have control rights. Typically, this is in investments where the investors sourced from the ASICON platform account for the largest consolidated equity in the investment.

How long does it take to fund a transaction?

Most transactions are funded within 45-60 days of submission.

Can a sponsor white-label the technology?

No, ASICON does not currently have a white-label solution.

What is your deal approval process?

ASICON has a two-stage approval process that involves a full underwriting of the investment and a tour of the asset.

What type of equity capital can sponsors raise on the ASICON platform?

JV equity, co-GP equity or preferred equity are all available. Sponsors are able to structure their transactions however they see fit.

Does the ASICON platform require sponsors to invest their own equity into their transactions?

Yes. Typically sponsors invests a minimum of 10% of the total equity requirement of a transaction.

Translate »