ACCREDITED INVESTORS FAQ

HOW DO I GET STARTED AS AN INVESTOR WITH PREVALENT CAPITAL?

You can get started as an investor with Prevalent Capital here: https://prevalentcapital.com/register/

The entire account creation and investment process is completed online via the Prevalent Capital website. You will be prompted to provide or verify any required information, as well as make the necessary acknowledgments electronically.

WHAT TYPES OF ACCOUNTS CAN I INVEST THROUGH?

We currently support personal investment accounts, joint accounts, and certain entity accounts (Trusts, Limited Liability Companies, Limited Partnerships, C Corporations, and S Corporations). For more information on IRA accounts, see below.

WHAT IS A K-1?

As a partner in the LLC that purchases the properties, you will receive 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.

WHEN WILL THE K-1 BE AVAILABLE TO INVESTORS?

Our goal is to finalize all K-1s by March 31st, however, we do rely on outside reporting and may require additional time to furnish the forms in a way that is to the investor’s best advantage. Accordingly, you may be required to obtain one or more extensions for filing federal, state and local tax returns.

AM I ACCREDITED INVESTOR?

An accredited investor, in the context of a natural person, includes anyone who:

  • earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
  • has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period, in which case the person may satisfy the threshold on the basis of joint income for the years during which the person was married and on the basis of individual income for the other years.

In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:

  • any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or
  • any entity in which all of the equity owners are accredited investors.

In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.

DO I HAVE TO BE AN ACCREDITED INVESTOR TO INVEST?

Yes. Our offerings under Regulation D Rule 506(c) are available to accredited investors only. Please register at https://prevalentcapital.com/register/ to view our current offerings.

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