In addition to the Questions & Answers below, we have launched an Investor Insights page with articles that dive deeper into various topics.
Rise Capital is a boutique real estate investment company based in Forest Lake, Minnesota. We work with investors to purchase and operate apartment buildings throughout the Midwest. Read more about us on Our Stories page.
We try very hard to offer useful, honest, & accurate information, however we are not investment advisors, attorneys, or accountants. The answers on this page are not meant to be one-size-fits-all instructions or advice for investors. Please consult professionals who know your specific circumstances to verify all information and provide investment advice.
We typically invest in 100+ unit apartment buildings constructed in the 1970's and 80's. Rise Capital has specific criteria for properties. Please see What We Buy.
We purchase properties typically using 75% bank financing and the other 25% from a pool of investor funds (which includes money we invest ourselves into the pool, officially called a "fund.") You can be a part of our investor pool, which gives you ownership in the properties we buy without any requirement for you to do any of the work to locate, negotiate, or manage properties.
Not only do we concentrate in the Midwest, we also focus on properties located in mid-size towns not associated with major metropolitan areas. Why? It's the niche we have found that produces the highest cash flow margins, which is our primary focus. Other geographical regions and larger cities are largely "priced out" in our opinion, a
Not only do we concentrate in the Midwest, we also focus on properties located in mid-size towns not associated with major metropolitan areas. Why? It's the niche we have found that produces the highest cash flow margins, which is our primary focus. Other geographical regions and larger cities are largely "priced out" in our opinion, and make it difficult to allow for the margins we seek. Plus, it's been our focus for long enough now that we've gotten pretty good at it!
The short answer is it's not our niche and we believe in staying in our lane. Why isn't it our niche? Just like with a new car, newer buildings tend to come at a premium. Newer projects can be great long-term investments and we know many successful companies investing in newer projects, so it's not to say it can't be done! However, ou
The short answer is it's not our niche and we believe in staying in our lane. Why isn't it our niche? Just like with a new car, newer buildings tend to come at a premium. Newer projects can be great long-term investments and we know many successful companies investing in newer projects, so it's not to say it can't be done! However, our focus is on cash flow and we have found success in our target niche.
Yes, and we would not receive a "kick back" or any sort of compensation. Our investors are really important to us. Even if that means there's a better fit for you with a different investment option, we want what's best for you!
Please note: we are not investment advisors! All investments, whether with Rise Capital or elsewhere, should
Yes, and we would not receive a "kick back" or any sort of compensation. Our investors are really important to us. Even if that means there's a better fit for you with a different investment option, we want what's best for you!
Please note: we are not investment advisors! All investments, whether with Rise Capital or elsewhere, should be reviewed carefully. Make sure to consult with appropriate professionals to ensure a good fit for your personal situation.
Our current investment option is Rise Capital Fund I and the minimum investment amount is $50,000.
We do sometimes offer lower investment amounts with syndication investments (investments in only one property versus the Fund, which invests in multiple properties.) Please call and we'd be happy to explain further!
In the case of Rise Capital Fund I, investors must be accredited. We occasionally offer syndication investments (see previous question) where we can work with non-accredited investors under certain circumstances. Please note: We would love to work with everyone, however the rules and requirements are set forth by the SEC.
Contact us for more information about the accreditation process.
Definition of Accredited Investor from investor.gov: An accredited investor, in the context of a natural person, includes anyone who:
Definition of Accredited Investor from investor.gov: An accredited investor, in the context of a natural person, includes anyone who:
There are other categories of accredited investors, including the following, which may be relevant to you:
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.Please visit here for more information, including how net worth is determined for the purpose of being an accredited investor. Verivest will verify your status as an accredited investor prior to your investment with Rise Capital.
Investors that decide to work with Rise Capital sign up for our Investor Portal and pledge an investment amount. Investors then go through the process of verifying their accreditation status and signing the fund paperwork.
When we have a property we're ready to purchase (we never stop looking and usually have at least a few candidates "i
Investors that decide to work with Rise Capital sign up for our Investor Portal and pledge an investment amount. Investors then go through the process of verifying their accreditation status and signing the fund paperwork.
When we have a property we're ready to purchase (we never stop looking and usually have at least a few candidates "in the works"), we do a "capital call" for pledged funds to be transferred to Rise in order to complete our next purchase.
Rise Capital Fund I, the name of our current fund, has an estimated length of five to seven years. The reason it's estimated is because it would be bad for everyone if we had to liquidate assets in less-than-ideal markets, so the fund paperwork allows for variances in the timeframe in order to accommodate optimal sales prices. However,
Rise Capital Fund I, the name of our current fund, has an estimated length of five to seven years. The reason it's estimated is because it would be bad for everyone if we had to liquidate assets in less-than-ideal markets, so the fund paperwork allows for variances in the timeframe in order to accommodate optimal sales prices. However, the goal is that all initial capital from investors will be paid back by the 7th year even if we continue to own the assets beyond that point.
Rise Capital is an expert at finding apartment complexes with high cash flow potential, negotiating the purchase price, performing targeted improvements after purchase, increasing income through better marketing, and decreasing expenses. Please see the What We Do page.
If purchased right, which is the key, apartment buildings can produce money for Investors in the following three ways, with a 4th "cherry on top."
If purchased right, which is the key, apartment buildings can produce money for Investors in the following three ways, with a 4th "cherry on top."
The target is to create both short-term and long term-income. Short-term income comes in the form of net cash flow, which is the net profit left over after we have collected rents and paid operating expenses & loan payments.
Long-term income comes in the form of selling properties at a profit, typically five to seven years after we bought them.
When payments (called "distributions") are made to investors, they are made on a quarterly basis and must follow what is commonly known as the "waterfall structure." In the case of the Rise Capital Fund I, profits first go to investors in the amount of 8% of the investor's remaining investment principal. This is known as a "preferred re
When payments (called "distributions") are made to investors, they are made on a quarterly basis and must follow what is commonly known as the "waterfall structure." In the case of the Rise Capital Fund I, profits first go to investors in the amount of 8% of the investor's remaining investment principal. This is known as a "preferred return" and commonly shortened to a "pref. return." After the 8% pref. return is caught up from all current quarters, profits next go toward paying back investors' investment principal. Once all initial investment principal has been returned to investors, profits after that are split roughly 70/30 between investors and Rise Capital. The exact split depends on a number of performance factors and the full split breakdown can be found in the Rise Capital Investor Guide as well as the Private Placement memorandum, both found on the Investor Guides page.
Our target goal is that the IRR (Internal Rate of Return) for investors achieves at least 16% annually when averaged out over the life of the Fund. You can read risk-related answers below, but it should be noted that 16%+ is a target and will likely vary. No returns are guaranteed!
Don't worry, IRR can be confusing!
Another way of saying it is this: when the Fund has concluded, our goal is that Investors will have made an average of 16% annually on their principal investment remaining each year.
Please visit our Investor Guides page to read more details. Or contact us anytime and we're happy to answer any questions!
Honesty is the best policy, and that's how we operate. Unfortunately, dishonest people would claim the same thing!
Therefore, we don't expect investors to simply take our word for it.
We are very careful about what properties we buy. We put significant money into our own deals, meaning we have lots of skin in the game right along with our investors. The most important step is buying safely on the front end and not rushing into any deal. See more about What We Do.
No. Rise Capital and its founders have never lost any investor's money (or our own money) nor lost or defaulted on any property.
Yes. Returns are not guaranteed. Please visit the Investor Guides page to see the Private Placement Memorandum which, among other things, details potentials risks. The target IRR is based on estimates we believe to be accurate but actual returns can vary greatly. It is important that you carefully review the official fund documentation so you're aware of the risks and rewards.
No. Rise Capital's strict buying criteria is designed to keep that risk to an absolute minimum. If we can't buy a property for the right price, we won't invest in it.
No. Investors are never required to invest an amount beyond their original contribution. Additionally, we do extensive work before purchasing a property to ensure we won't find ourselves in a negative cash flow situation.
For starters, no investment with Rise Capital is guaranteed or federally insured. On the other hand, you are a lot "closer" to your investment when you work with us whereas traditional investments require you to go along for the ride that is usually at the whim of the overall market. We are as careful as possible about buying investment
For starters, no investment with Rise Capital is guaranteed or federally insured. On the other hand, you are a lot "closer" to your investment when you work with us whereas traditional investments require you to go along for the ride that is usually at the whim of the overall market. We are as careful as possible about buying investment properties that will continue to perform well even as the broader financial markets experience ups & downs. The most important thing for us is strong cash flow. Comfortable cash margins allow for continued success despite external factors.
For a number of years we focused on buying assets with our own pool of funds. We started working with investors for two reasons:
As for net profits from the cumulative operations of the properties, which is where the "real" money is made, investors are paid first and given their initial investment back before Rise Capital shares in the profits. We have an "investor first" structure that incentivizes our performance in order to be able to share in the profits. At
As for net profits from the cumulative operations of the properties, which is where the "real" money is made, investors are paid first and given their initial investment back before Rise Capital shares in the profits. We have an "investor first" structure that incentivizes our performance in order to be able to share in the profits. At the property level, the bank loans must be paid first and Rise Capital's in-house management company receives a market-rate property management fee. At the fund level, Rise Capital receives a fund management fee to "keep the lights on" and perform day-to-day business functions. Please see the Investor Guides page for more details.
Yes! That's how we started. It is, however, very time-consuming, especially if you want to invest in apartment buildings. Finding and purchasing good deals is competitive. Property management can be cumbersome. Most people recognize real estate as a strong investment avenue but few actually enjoy the commitment it takes to do it perso
Yes! That's how we started. It is, however, very time-consuming, especially if you want to invest in apartment buildings. Finding and purchasing good deals is competitive. Property management can be cumbersome. Most people recognize real estate as a strong investment avenue but few actually enjoy the commitment it takes to do it personally. Rise Capital offers a way to invest in real estate without having to do the work yourself. Even better, because we are good at it and have a proven system in place, you would likely find your returns with us to be as good or better than if you invested on your own. Of course, no returns are guaranteed. Contact us to receive the Rise Capital Investor Guide, which contains much more information!
The Rise Investor Portal is where you can see current investment opportunities with Rise Capital and, if you have already invested with Rise, you can see information regarding your investment like financial reports, returns, etc. You can create a login whether or not you have invested with Rise Capital. You can create an account here: Rise Capital Investor Portal
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