At Concreit, our mission is to democratize real estate investing by making it accessible to everyone, whether you’re an accredited investor or not. That’s why our offerings are structured under Regulation A+ Tier 2, which allows us to provide real estate investment opportunities to a broader audience. With Cash Flow and Home Shares as our two core strategies, we aim to deliver both financial returns and the peace of mind that comes with knowing your money is being managed responsibly.
However, as part of maintaining our regulatory compliance, there are moments when our offerings need to be re-qualified by the SEC. While this process is crucial for keeping us on track with regulations and ensuring a trustworthy platform, it can lead to questions about what’s happening behind the scenes and how it might impact your investments. In this article, we’ll break down what’s going on and what you can expect during this period.
Why Regulation A+ Tier 2?
Regulation A+ Tier 2 is designed to enable companies like Concreit to raise capital from both accredited and non-accredited investors while still following stringent SEC guidelines. This regulatory approach aligns perfectly with our vision of making real estate investing more inclusive. The trade-off? Compliance with these regulations requires periodic re-qualification, which involves submitting updated information to the SEC and awaiting approval. This ensures transparency, investor protection, and overall platform stability.
What Happens to Cash Flow During Re-Qualification?
During the re-qualification process, you might wonder what happens to your investments, particularly in our Cash Flow strategy. The good news is that your money continues to work for you and grow 💪 , even when we temporarily pause issuing new shares. Here’s how it works:
Weekly Dividends Remain Constant
Your weekly dividends are paid out just as they always are. The amount you receive won’t be affected, and the shares you currently own remain the same throughout the re-qualification process.
Instant Earn Keeps Your Money Active
When re-qualification begins, our Instant Earn feature kicks in. This feature allows you to start earning rewards on any pending investments and DRIP (dividend reinvestment plan) contributions that would otherwise be waiting for shares to be issued. Instant Earn matches the dividend rate, so your money continues to grow while the regulatory process is ongoing.
How Long Does This Process Take?
The re-qualification process varies depending on many factors, and has generally taken most issuers 2-4 weeks for amendments, and for more in-depth qualifications anywhere from 10-20+ weeks. It will vary depending on the team we work with at the SEC and their internal timeline. During this time, your investments remain active, and the Instant Earn rewards help ensure that you don’t miss out on growth opportunities. We aim to keep you informed with updates as the process progresses.
As of July 2024, our Cash Flow strategy was qualified 3 years ago, and we are required to go through an longer qualification as we modernize many elements of our Offering Circular to conform to the most up-to-date SEC requirements.
Is the Cash Flow business still operating?
Yes! We are still originating, managing mortgage notes and working to generate income for our investors. This is how we are able to support continued dividend payouts.
What Happens Once We’re Re-Qualified?
Once the re-qualification is complete, everything will return to normal and we will begin to process new investments. Your pending investments will be converted into shares, and any accrued rewards from Instant Earn will apply to your balance. We encourage you to keep your funds invested during this period so you can take full advantage of the rewards offered by Instant Earn.
Why Staying the Course is Important
It’s understandable to have concerns during a regulatory pause, but rest assured that this is a routine part of being a regulated investment platform. We believe in being your fiduciary and building a durable business to reflect the durability of our underlying real estate investments.
Keeping your money invested allows you to maximize your returns and benefit from the programs we’ve put in place to keep your investments working for you, even during these regulatory periods.
Final Thoughts: Transparency and Trust
At Concreit, we believe that regulatory compliance is a sign of stability, not disruption. Our commitment to providing a compliant and trustworthy platform means there will be occasional re-qualification periods. However, we have designed features like Instant Earn to ensure your financial growth continues without interruption.
We’re here to support you and answer any questions you have. If you ever need more information or clarity, please don’t hesitate to reach out to our support team. We’re committed to keeping you informed every step of the way.
This article is meant to demystify the re-qualification process and provide you with the confidence that your investments are in good hands. Regulation is not just a hurdle; it’s part of what makes Concreit a stable and reliable platform for building long-term wealth.