Common equity: For common equity investments, there is an annual monitoring and reporting fee on the amount of your investment. This fee is generally between 0.5% and 1.5% of invested capital. Typically, we also hold a profit participation, but only after you’ve received a full return of your invested principal and the IRR hurdle is achieved. This backend compensation helps align our interests with our investors.
Debt and preferred equity: For debt and preferred equity investments, we typically charge a Servicing Fee which is typically 1% but may be more or less. Please note that the Preferred Return displayed on the offering materials are generally net of the servicing fee.
Funds: Our fund offerings typically entail an Origination Fee as well, which is typically paid upfront, and is specified with each offering.
For all offerings, EquityMultiple is entitled to deduct an Administrative Expense to cover tax document creation, annual filings, and entity formation. This fee is split between all investors, and typically ranges from $30-$70 per investor annually.
Please refer to the Financials and Structure section of the Offering Summary page, and Investment Summary section of the Investor Packet for more comprehensive information on fees. For more on the topic, please refer to this article.
What value does EquityMultiple bring to justify its fees?
We vet lenders and sponsors, in addition to performing deal-specific diligence on each investment from select lenders and sponsors, thus providing investors multiple layers of diligence.
We then provide vigilant asset management services throughout the lifetime of each investment, including asset monitoring; delivery of distributions; preparation of tax documents; and the management of any workouts or asset restructurings that may become necessary in certain cases. In short, EquityMultiple works to protect your principal, maximize your returns, and simplify your real estate investing experience.
Our secure platform offers investors an easy, closed-loop investing process and asset monitoring throughout the lifetime of projects.