No, Gatsby has never lost money on a deal.
Our average annualized net return to investors from 2017-2022 was 24.22%. You are welcome to view our full track record with every property we have completed from the start of the company until today.
ROI does not consider any time frame; it only states how much return on investment a project made as a whole. The annualized return shows the ROI over a 12-month period. The annual return is useful when comparing investments because it allows investors to see how each investment performs over a standard one-year period.
Once you place your investment(s), you will be provided with instructions to complete an online wire transfer or ACH. You will have 5 business days to complete the transfer to activate your investment. For wire transfers, there is a unique reference code, marked in red. Make sure you include this code when wiring the money.
Please note that if you have a daily wire transfer limit, you can do multiple wires on separate days until you reach your total investment amount. In this case, make sure you include the same reference code in all your wires.
Your investment starts the day you place the investment. As an example, let’s say you placed an investment on Jan 26th, but sent the wire transfer 5 days later. Your investment would still be listed with a starting date of Jan 26th, but the status would not change to “Active” until we received the investment funds via wire transfer or ACH. Investors receive a confirmation email once the funds are received and the investment is active.
No. Gatsby makes sure that a project is never delayed because of funding.
Gatsby Investment provides the funds upfront as needed so that a deal can proceed as scheduled. The investment is kept open on the website to let more investors join the project as it progresses. And, as more investors join the project, Gatsby’s original funds are replaced by the new investors’ funds.
This is why all investment returns are prorated based on the time each investor joins a deal.
The “Deal Level Financials” of each project lists:
- A starting date (which is the date we open escrow on the property),
- An ending date (which is the estimated date the project will be sold and complete),
- A total timeframe projection (which is the estimation of how many months a project will take from start to finish).
The “ROI Calculator” of each project lists:
- The remaining estimated timeframe (based on how much time is left on a project).
Your ROI is prorated based on the period for which you were an investor in the deal.
For example, let’s say you see an investment opportunity with a full timeframe of 18 months under the “Deal level financials” and a remaining estimated timeframe of 16 months under the ROI calculator. If you were to enter the deal with 16 months remaining, your share in the profit would be prorated for the 16 months during which you were an investor.
Gatsby’s proprietary software automatically counts down the days and calculates the estimated ROI for you based on the day you are viewing the investment. Importantly, only the actual ROI will vary based on your period of investment, the annualized return will remain the same for all investors in a project.
To calculate your ROI (Return on Investment), divide your net profit by the total investment amount for a property. Multiply the result by 100 to see your ROI expressed as a percentage.
For legal purposes, investors cannot name “beneficiaries” on the Gatsby platform. If anything were to happen to you, your share in the property would be passed along to the person named in your will, trust, or similar legal document.
You can, however, name an emergency contact in the platform. This field becomes available on your profile after you have placed an investment. And this is the party that Gatsby would contact to arrange disbursements on your account.
Not exactly. While you can reinvest your earning into a new project, you must first receive the proceeds from your previous investment; we can’t hold your funds from one project and invest them directly into another project on your behalf. Once a project is complete, we will disburse the funds back to your bank account automatically. After you receive the funds, you can then choose to reinvest in a new property.
No. The real estate opportunities listed on our platform are not intended to be used in 1031 exchange transactions.
We have two separate policies for our construction/new development projects.
- Premises liability insurance. This covers an individual getting injured on the property.
- Builder's risk insurance. This covers the property itself during construction if it was to get damaged or destroyed. This includes fire, vandalism, and other unexpected events. In case something was to happen to the property, the insurance would cover the full “Replacement cost.”
In the unlikely event that a project was to fall out of purchase escrow, Gatsby would give the investors in the deal the option of either joining a similar project or getting their funds back.
Our construction timeframes are carefully calculated based on project schedules, including the availability of materials, supplies, and workers. However, it is possible for unforeseen delays to cause construction to take longer than expected.
In this case, Gatsby works closely with the construction team to get back on track and complete the project as close to the original estimated completion date as possible.
Assuming the property still sells for the projected amount, the investors’ ROI is not affected by any construction delay. However, the annualized return would be affected. This is why Gatsby tracks annualized returns, as well as straight ROI, to give investors a better idea of how the projects performed.
In the event that a project needed additional funds to complete the development, Gatsby would provide the money to the ownership LLC through a 0% interest loan, which would be repaid once the property sold.
Gatsby carefully analyses market conditions to estimate the sale dates and sale prices of completed properties. However, with ever-changing market conditions, it is possible for a property to take longer to sell than expected or to sell for more or less than expected.
If a project takes a bit longer to sell than expected, we will continue advertising the property and update the investment status accordingly to keep investors up to date on the progression. Assuming the property still sells for the projected amount, the investors’ total ROI would not be impacted.
If unforeseen circumstances were to change the market so dramatically that it no longer makes sense to sell the property, Gatsby would find qualified renters for the property, generating passive rental income for investors, as well as tax breaks through rental property depreciation deductions, until the market stabilizes, and the property can be successfully sold.
Please note: Gatsby has never been unable to sell a property that was intended to be sold upon completion. But we are ready to do what needs to be done to ensure the success of every deal, regardless of how the market may change.
If the property sells for more than expected, the additional profits are shared among the project’s investors. If a property were to sell for less than expected, the ROI would be updated to reflect the lower-than-expected sales price.
Gatsby strategically purchases and builds properties that are in high demand, so it is very rare to have a unit empty for long. If a renter gives their notice to vacate, we can usually find a replacement tenant to move in within 30 days of the unit being vacated. In that case, you may only receive a partial disbursement from rental income during that period of time.
Coming soon investments offer a sneak peek at deals we will be offering in the future. You can view the property description and estimated financials for projects that will be coming available. You will be notified once these opportunities are open for investment.
Open investments are ready to accept funding today. You can view the property details, financial breakdown, and a full description of our plans for the property. And you can wire your investment to join the project with an ownership stake.
An ADU (Accessory Dwelling Unit) is an additional housing unit built on existing single-family properties. ADUs can be stand-alone structures built next to the main house, or they can be built into the property (by converting an unfinished basement, attic, or garage loft into an apartment, for example).
To maximize property value and investor returns, Gatsby often build a brand-new ADU next to the primary structure for our House Flipping projects.
In most cases, we use the bank’s appraisal to determine the property value. In cases where the bank is not the appraiser, we use appraisers who are certified members of the Appraisers Association of America (AAA). AAA-certified members have at least 10 years of experience as licensed real estate appraisers. They have more experience, education, and expertise than other real estate appraisers, making them uniquely qualified to properly value our developments, renovations, and rental properties.
The LLC will offer Class A Units to prospective investors in accordance with a Subscription Agreement. The economics and management of the LLC will be governed by an Amended and Restated Operating Agreement, to which each investor will agree to be bound when investing in the LLC.
Gatsby Investment acts as the managing member and owner of Class B Units in the LLC (and has all voting rights), and the investors are the members and owners of Class A Units in the LLC. As a holder of Class A Units, you have an indirect economic interest in the single real property asset held by the LLC. The number of Class A Units issued to you is based on the amount you invest and the value of the equity in the underlying property at the time of investment.
Yes. Once you have wired your investment funds and your investment becomes active, you can view and download a property certificate. This certificate includes your full name, property address, investment amount, and target share in the property. It also confirms your ownership stake in the underlying real estate owned by the LLC.
The certificate can be found under “My Investment” in the “Account” tab. Simply click on the investment for which you wish to view the property certificate.
Yes. For rental properties, 100% of the property’s depreciation expense will pass through to investors based on their respective ownership percentages.
Built-to-sell: Yes. Flips and developments create forced appreciation, meaning that the sales price is driven up by the added value of the construction. Additionally, market conditions may contribute to the organic appreciation of the property as well. Investors benefit from both types of appreciation when the property sells for more than the total amount invested.
Rentals: Investors in our long-term rental properties can also see the benefit of appreciation. If you hold your investment until Gatsby decides to sell the project, you are entitled to your share of any profits from the sale. It’s also possible that Gatsby could secure a cash-out refinance during the hold period, allowing investors to recover their initial investment, and even earn a profit unrelated to rental income, while still retaining ownership of the property.
As with any investment we cannot, and do not, guarantee a profit. You can, however, view the returns from our track record to see our consistently profitable results.
NOTE: Past performance does not assure future results.
Each property is held in a stable LLC ownership structure. The limited liability company structure is designed to separate the assets and liabilities associated with the Property from the personal assets of investors.
The property holding LLC will be dissolved and liquidated. In settling accounts after dissolution, the property and other assets of the property holding LLC will be paid or distributed first to the creditors of the property holding LLC and then to the members of the property holding LLC in accordance with the terms of the operating agreement of the property holding LLC.
If Gatsby Investment LLC goes bankrupt, the operating agreement of the property holding LLC provides that Gatsby Investment LLC may continue to be bound by said operating agreement as the managing member (and Class B Unit holder), or appoint a successor managing member, although a bankruptcy proceeding with respect to Gatsby Investment LLC could, for example, lead to delays or reductions in distributions from the property holding LLC to Class A Unit Holders and result in insufficient funding of the property holding LLC and/or liquidation of the property holding LLC (and/or Gatsby Investment LLC). Further, the rights and obligations of Gatsby Investment LLC (and the Class A Unit holders of the property holding LLC) may be negatively impacted by the U.S. Bankruptcy Code. For example, a court officer or representative could be appointed to take over Gatsby Investment LLC’s rights to manage and control the property holding LLC. For additional information about the risks associated with Gatsby Investment LLC ceasing to act as the managing member of the property holding LLC, please see the Risk Factor identified as “The Issuer has limited or no operating history and no employees of its own” in the Summary of Terms.
Gatsby hires a third-party accounting firm to perform an “Agreed upon procedure report” for completed properties. In this report, the reviewer confirms the purchase date, purchase price, property address, escrow statements, costs and expenses, sales date, sales price, and return on investment.
Gatsby have these reports done regularly. They are made available to all verified accredited investors per request.
Each investor must complete an IRS Form W-9 upon making their first investment. At the end of each applicable tax year, investors will be issued a Schedule K-1 reflecting their share of the taxable income, or loss, from each completed property. Investors will be responsible for including such income, or loss, on their tax returns.
Ordinary income / Short-term capital gains:
In general, profits from the sale of a property (or Class A Units) held for less than 12 months will be taxed as short-term capital gains. Any rental income the property generates will be taxed as ordinary income.
Long-term capital gains:
In general, profits from the sale of a property (or Class A Units) held for more than 12 months will be taxed as long-term capital gains.
NOTE: Prospective investors should consult their own tax advisors for further information about the federal, state, local foreign and other tax consequences of purchasing and holding Class A Units.
For a more detailed tax discussion, please see the section entitled “Certain U.S. Federal Income Tax Considerations” located in the Summary of Terms.
Your Schedule K-1 form can be downloaded directly from your Gatsby account. Simply sign into your account, go to the “Account” tab and click on “My Profile.” Scroll down to the Schedule K-1 field where you can click “Download.”
We aim to provide US taxpayers with annual K-1 statements in a timely manner prior to April 15th. Investors can find all current and historical statements by going to the “Account” tab and selecting “Tax Forms (Schedule K-1).”
Yes, all investors with any activity within a given tax year will need to file Schedule K-1. However, the K-1 will not reflect the sale of the property and its profits until the sale has closed.
For Partnership and LLC distributions, you need to prepay tax if you receive a non-wage payment as a non-CA resident. This means Gatsby Investment must withhold 7% of your California income that exceeds $1,500. This is called nonresident withholding and cannot be reduced or waived.
Note: The 7% is only taken from profit, not from principle. For example: Let's say you invested $10,000 with a return of 20%. This gives you a $2,000 profit. We would be required to withhold 7% of your $2,000 profit (totaling $140).
Yes. Tax law requires investors to file a tax return and report their state-sourced income (the income generated from economic activity, like real estate investing, in that state) to the state taxing board.
For example, if you live in Texas, but invest in a Gatsby project in California, you will need to file a California tax return showing the income reported on your California Schedule K-1 tax form.
Who can invest?
To invest with Gatsby Investment, you need to be 18 or older and be verified as an accredited investor.
There are five different ways to qualify as an accredited investor. If you meet any one of these five requirements, you can be verified:
- Individuals who have earned $200,000 or more in gross income, each year, for the past two years and expect to continue to do so.
- Individuals whose gross income, when combined with a spouse's income, totals $300,000 or more, each year, for the past two years and expect to continue to do so.
- Individuals who maintain a net worth of $1 million or more, excluding the value of his or her primary residence.
- An entity with at least $5 million in assets, or a business in which all equity owners are accredited investors.
- Individuals holding General Securities Representative (Series 7), Private Securities Offerings Representative (Series 82), or Licensed Investment Adviser Representative (Series 65) registration in good standing.
Yes, international investors are welcome at Gatsby investment. Click the link below to learn more about the process of investing as a non-US citizen.
Yes, Gatsby offers the chance for fund companies to invest into our investment opportunities. Learn more about investing as a fund by clicking the link below.
Yes, Gatsby offers a fund of funds investing option. Learn more about investing as a fund.
Yes, Gatsby Investment accept the following retirement account types:
- IRA LLC (Single-member)
- IRA LLC (Multi-member)
- Self-Directed Solo 401(k)
Currently, the SEC has approved the Series 7, Series 82, and Series 65 licenses for accredited investor status. Holding a Series 79 does not automatically qualify you as an accredited investor, but if you can meet the SEC’s accredited investor criteria in terms of income or net worth, you can invest with Gatsby.
If the SEC expands the approved licenses to include Series 79 in the future, holders of the licenses in good standing could qualify as accredited investors at that time.
SEC regulations require that investors be accredited to invest in certain investment types, including Gatsby’s real estate syndication investment opportunities. The SEC oversees most financial securities traded among members of the general public. This is generally a good thing because it provides a layer of protection for investors lacking experience or knowledge. But sophisticated investors want access to investment opportunities that the SEC doesn’t directly regulate. So the SEC created this accredited investor status to allow members of the general public to access innovative investment types. Being verified as an accredited investor means you’re deemed financially savvy enough to make sound decisions with your investment capital.
Gatsby offers free verification through a confidential third-party service, Verify Investor. Once you create your Gatsby account, you will be guided step-by-step to the online accredited investor application.
Before you start the accredited application, please make sure you have at least one of the following documents available:
Investing as individuals and retirement accounts:
- Proof of income for the past 2 years (W-2, Schedule K-1, or 1099)
- Proof of income, combined with your spouse, for the past 2 years (W-2, Schedule K-1, or 1099)
- Documentation of assets proving you have a net worth of at least $1,000,000, excluding your primary residence (documentation could include a property deed or other evidence of ownership, bank statements or letter from a financial institution, or vehicle title that shows ownership along with a professional valuation)
- A verification letter, signed by a CPA or licensed attorney within the last 90 days
Investing as an entity and trust:
- Proof that each equity owner is an accredited investor. Each owner needs to show proof of income for the past 2 years, individually or combined with your spouse, with a W-2, Schedule K-1, or 1099. Or show documentation of assets proving you have a net worth of at least $1,000,000, excluding your primary residence (documentation could include a property deed or other evidence of ownership, bank statements or letter from a financial institution, or vehicle title that shows ownership along with a professional valuation)
- A verification letter, signed by a CPA or licensed attorney within the last 90 days
- Proof of assets exceeding $5,000,000 (like a formal valuation from a valuation professional or accountant)
For Series 7 and Series 82, the reviewing attorney needs to ensure that the investor is currently working for a FINRA-member or SRO firm or is within 2 years since they were either terminated or left a firm and has not yet found employment with a FINRA-member). For Series 65, the investor may qualify as long as they are registered with a State to be in good standing. For this verification method, you simply need to enter your name as it appears on your license, your individual CRD#, and for Series 7 and 82 only, the name of the firm you are licensed through.
An accredited investor verification is valid for up to 90 days. You must make your first investment and complete the wire transfer within this time frame to avoid having to apply again. Once you have made your first investment, your verification remains valid with Gatsby Investment permanently.
Unfortunately not. In order to invest any amount in any Gatsby project, you need to be verified as an accredited investor.
Gatsby has a 100% success rate of profitable deals. No investor has ever lost money with Gatsby. The average annualized net return to investors from 2017-2022 was 24.22%.
All of Gatsby’s properties are located in Los Angeles County, California.
Gatsby’s corporate office is located at 9454 Wilshire Blvd., Suite 902 in Beverly Hills, California. We are always happy to meet with investors. To schedule a meeting, please email firstname.lastname@example.org.
Gatsby offers several advantages over other real estate investment platforms, including:
We are one of the few platforms that offer short and long-term investments with timeframes ranging from 6 months to 5+ years. This flexibility allows you to tailor a real estate portfolio that meets your personal goals.
Ownership stake in the deal:
The LLC structure Gatsby uses allows investors to own a stake in the underlying real estate. This is very different from most real estate crowdfunding platforms, which only offer debt-equity rather than ownership.
We offer a unique approach and a management team with far-reaching industry experience.
Industry-leading customer service:
We are committed to transparency, attentive customer service, and thorough asset management updates throughout the investments.
Our projects are offered on a deal-by-deal basis, which means that you choose exactly which property (or properties) you want to invest in.
100% profitable track record:
At Gatsby Investment, we are proud of our track record! Since the start of the company in 2016, we have never lost money on a property.
But you don’t have to take our word for it. You can see how we compare to other real estate platforms in expert reviews and rankings.
Gatsby Investment collects a fee for managing all stages of the real estate process. The percentage of the fees can vary for each property type and LLC. The services include location scouting, opening and managing the LLC, buying and selling the property, securing the loan, handling escrow, applying for permits, managing the construction team, interior and architectural design, stabilizing the property, overseeing the management company for rental properties, accounting services, investor distributions, etc.
A market crash would not have much of an impact on our rental properties since our intention is to hold them for the long term. During a recessed housing market, we might need to wait to raise rents or refinance the loan. But we would continue to collect rents as usual while the market dips and then recovers.
For the properties that are renovated or built to sell, we may decide to hold the asset as a rental in the event of a housing crash. If we find that it’s a bad time to sell, we can place the property in service and collect rental income until the market recovers.
Go to the tab “Info” and click on “Completed Deals.” When you are there simply click on any of the properties to view the property address, before and after photos, and a summary of the financials and timeframe of each project.