How does Small Change work?
Small Change is a socially responsible investment platform, featuring real estate projects that we believe can transform cities for the better. Developers list their projects – which we have vetted in advance – and investors can choose among them.
How do I get started?
To get started, register and create a password. Then you can start seeing and using all the benefits of the Site.
Are there fees to join?
No, it’s absolutely free.
Can anyone invest?
Anyone can invest in Regulation Crowdfunding offerings. However, there are also offerings that only “accredited investors” can participate in.
What is an accredited investor?
In general, a person is an “accredited investor” if she (i) earns at least $200,000 per year, or $300,000 per year with her husband; or (ii) has a net worth of at least $1 million, excluding her principal residence. For the SEC’s full definition, please visit http://www.sec.gov/answers/accred.htm.
What if I’m not an accredited investor?
You can still sign up and see all of our projects but you can only invest in Regulation Crowdfunding projects.
What kinds of projects will I see on your site?
All kinds of real estate projects that we believe can improve cities and communities.
How do you select projects?
We use a “Change Index” that measures the potential for positive change, as well as other criteria.
Why should I consider an investment in real estate?
Allocating some portion of your portfolio to a direct investment in real estate may provide you with a reasonably predictable and stable level of current income from the investment; the opportunity for capital appreciation; and diversification of your portfolio; and may also provide you with the knowledge that you are helping to improve cities and communities. But you should view these as very risky investments, much riskier than an investment in a stock market index fund, for example.
How much should I invest?
That’s entirely up to you and your investment advisors. As a general matter, most people recommend a balanced portfolio that includes both low-risk and high-risk investments, with the right mix based on lots of factors including your age and your own tolerance for market fluctuations. As you consider how much to invest, you should definitely think of most of the projects on our site as high-risk investments.
Are there minimum investments?
Each project will have a stated minimum investment.
Are these risky investments?
You should view these as very risky investments, much riskier than an investment in a stock market index fund, for example. The same is true for any direct investment in real estate. You could lose some or all of your money in any of these investments. Neither Small Change nor anybody else guarantees your investment.
How long is the investment period?
Investment periods can vary greatly. It is important to review the investment period specific to the project you are interested in investing in.
If I invest in a project, do I become personally liable for anything?
No, not at all. You are only personally liable only to make your investment. We choose our legal structures to protect investors from personal liability.
Describe the investment process.
First, review our active projects. When you decide to invest, click “I’m Ready to Invest” and we will guide you through the process. We’ll have you review important information about the project, we’ll ask you to sign our Investment Agreement, and then – and only then – we’ll ask you to pay for your investment.
Where does my money go when I invest?
Your money is held safely in an escrow account (which we don’t control) until the project is fully subscribed, i.e., until the full amount is invested. Then, it is distributed to the sponsor of the project. If the project is not fully subscribed, your money will be returned to you without any deduction.
What will I own if I invest? Will I own real estate?
You won’t own real estate directly in your own name, the way you own your home. Instead, you’ll own an indirect interest in real estate. Often, you will own an interest in a limited liability company that itself owns real estate. In other cases, you will own a promissory note that is backed by real estate. In still others, you’ll own an interest in a limited liability company that itself owns a promissory note backed by real estate. We’ll describe exactly what you own in the information we provide for each project.
What will I receive for my investment?
That will vary from project to project. In some projects you would expect to receive a regular flow of income, while in others you would expect your interest to appreciate over time. We’ll describe the investment goals of each project as clearly as we can.
The real estate market crashed in 2007-8. Could that happen again?
Yes! Real estate can be a volatile investment and you should be prepared for ups and downs.
How should I choose among the projects on the site?
We might provide some general educational material. At this point, however, we’re not allowed to provide investment advice. If you’re not sure, you should consult with your own financial and investment advisors.
Can I invest through my IRA?
Usually, yes. For tax reasons we have to cap how much IRA money any one project can accept.
Will I be able to sell my shares?
Generally speaking, no. For one thing, there won’t be an active market, meaning you probably won’t be able to find any buyers. For another, in many projects you will be restricted from transferring your interests. Finally, any transfer of your interest would have to comply with the securities laws.
Where can I learn more about the projects?
When you click on a project, you’ll see a lot of information right away. For more information, after you click on the project, click on Investor Information. There you’ll see even more in-depth information about the project and the investment.
Can I invest in pools of real estate assets, rather than one at a time?
Not yet. We’re exploring that option for the future.
What if I change my mind after I have invested?
If you have invested in a Regulation Crowdfunding project, you’ll have until 48 hours before the offering closes to request a refund.
How will my money be returned?
By check, ACH or credit card credit.
Why don’t you show “projected IRRs” for Regulation CF offerings?
The term “IRR” stands for “internal rate of return,” a measure of financial profitability. Although the term is used frequently in the real estate industry, the Financial Industry Regulatory Authority, or FINRA, does not allow it to be used by its members. Since NSSC Funding Portal, LLC, which conducts the Regulation CF offerings on Small Change, is a licensed “funding portal” and a member of FINRA, we are not allowed to use the term for these offerings.