Investments

We offer investment opportunities ranging from six months to seven years. Many of our long-term rentals offer the option to continue your investment in five-year increments after the initial investment period.

The time frame starts on the day we get a property under contract and ends the day we close escrow on the sale of the property (or the day we close on the refinancing of the property).

The time frame for each project is listed on the details page of each investment offering.

NOTE: All time frames represent our best estimate of the time it will take to complete an investment. Time frames cannot be guaranteed.

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. You will have 5 business days to complete the wire to activate your investment. Each investment has 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.

NOTE: We cannot accept ACH, credit cards, personal checks, or any other form of payment besides wire transfer.

The “prorated” timeframe simply refers to the amount of time that you are an active investor in a project. Your return on investment will be based on the timing of your investment in the property.

If, for example, we offer an investment with a 12-month timeframe, and you enter the investment in month two, your profits would be calculated based on the 10 months that you were an active investor in the project.

Investors can enter an opportunity at any time that it is listed as an “Open Investment.” Gatsby often purchases the property with our own capital, then replaces our original funds with investors’ funds as they are received. The opportunity will be open until it has been fully funded or until Gatsby decides to close the investment by keeping its own capital and stake in the deal.

You can review the projected timeframes on each investment opportunity’s details page before you invest. Some investment offerings come with the option to exit or continue after the initial investment period. However, you cannot exit an investment before the initial timeframe is complete.

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.

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.

At the coming soon investment stage, you’ll be able to view the estimated return percentage, time frame, and financials based on our track record of completed properties as well as projections for the upcoming project. Once a property has been selected, the return percentage and financials will be updated to reflect the specific property, and the status will change to “Open Investment.”

The pre-investment stage allows you to reserve a spot in an upcoming project while we are bidding on the next deal. There is no cost to hold a spot, no wire transfer is required, and you are under no obligation to activate the investment once a property is secured.

Some investments fill up quickly, so it’s best to reserve your spot at the pre-investment stage whenever possible.

Pre-investments also help us to understand what types of investments you’re most interested in, so we can focus on finding those deals. We will determine what project to open next based on the pre-investment amounts raised.

At the pre-investment stage, you’ll be able to view the estimated return percentage, time frame, and financials based on our track record of completed properties. Once a property has been selected, the return percentage, time frame, and financials will be updated to reflect the specific property, and the status will change to Open Investment. Investors who reserved a spot during the pre-investment stage will be notified via email when the project is open for investment, and you will have five business days to complete the wire transfer to activate your 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.

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.

Legal

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.

Yes. For rental properties, investors will benefit from the increase in value of the property over time.

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.

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.

Taxes

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 in to 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, 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 take 7% from your California income that exceeds $1,500 in a calendar year. This is called nonresident withholding and cannot be reduced or waived.

Who can invest?

To invest with Gatsby Investment, you need to be 18 or older and be verified as an accredited investor.

There are four different ways to qualify as an accredited investor. If you meet any one of these four requirements, you can be verified:

  1. 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.
  2. 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.
  3. Individuals who maintain a net worth of $1 million or more, excluding the value of his or her primary residence.
  4. An entity with at least $5 million in assets, or a business in which all equity owners are accredited investors.

Non-US investors who meet accredited investor requirements are welcome at Gatsby!

However, international investors are required to take a few additional steps.

NOTE: If you live outside the United States, it is your responsibility to fully observe the laws of any relevant territory or jurisdiction outside the United States in connection with any purchase of membership interests, including obtaining required governmental or other consents or observing any other required legal or other formalities. Unless otherwise expressly indicated by us, we have not registered or qualified the offering of shares in any jurisdiction outside the United States.

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.

Yes, you can invest through certain retirement account types, including traditional IRAs, IRA LLCs, self-directed IRAs, Solo 401(k)s, and individual 401(k)s. Each investment property can accept up to 25% of the total raised amount from retirement accounts.

You can invest as an individual or an entity. You can also invest through a retirement account or a trust.

Gatsby offers investors multiple ways to invest:

  • Real Estate Syndication Offerings
  • Sole Ownership Investment Offerings
  • 1031 Exchange Investment Option

Learn more about investor options and ways to invest.

Accredited Investor

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)
NOTE: For the $1M net worth assessment, you will also need to submit a current copy of your credit report (no older than 90 days). You may order a free credit report from any of the credit reporting bureaus by visiting https://www.annualcreditreport.com.

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 Investment

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 support@gatsbyinvestment.com.

Yes, Gatsby Investment is registered with the SEC (Securities and Exchange Commission) and files reports regularly.

Gatsby Investment invests alongside the investors in every property.

In some cases, when we need to close a deal quickly, Gatsby purchases the property upfront before opening the investment to investors via the website. Then, as investment funds are received, we replace Gatsby’s original funds with the investor’s funds.

In other cases, Gatsby puts down the deposit only, then keeps the investment open on the website and raises the funds from the investors directly. If any amount is not raised within a certain time frame, Gatsby will then invest the remaining balance to fully fund the investment.

NOTE: All investments are prorated based on the time you invest in the deal.

Gatsby offers several advantages over other real estate investment platforms, including:

Diverse offerings: We are one of the few platforms that offer short and long-term investments with timeframes ranging from 6 months to 7+ 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.

Experienced team: 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.

Deal-by-deal control: 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 “Track record.” 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.

Support

If you have trouble logging in, please give us a call at 866.428.7291 (866-GATSBY1) or email us at support@gatsbyinvestment.com.