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FAQs

How are you able to pay an 8.5% Return?

Our goal is to buy income producing properties and notes at 60% of realizable value. We re-position the properties with the objective to get rental occupancy rates on par with the average in the region, thus increasing our rental income. Our average cash flow in the portfolio has historically been about 16% based on stabilized asset performance. All states returns are targeted returns. There is no guarantee of performance. The ability to pay the targeted return depends on the overall performance of the Fund and the assets therein.

Is my investment insured or guaranteed?

All investments carry some degree of risk and there is no guarantee that you’ll make money from your investment. It’s important that you understand before you invest that you could lose some or all of your money. Your investment is not insured by the FDIC or any government or third party. Instead, your investment is backed by the assets of the LLC, including a $2,000,000 cash investment in the Fund, in a first-loss position. You can read more about the Fund specifics in the PPM.

How is my money utilized?

Your principal investment goes directly towards buying commercial notes and properties with the goal of obtaining these assets at 60% of their realizable value. Your principal is backed by the underlying asset which is commercial real estate with the objective of obtaining strong cash flow. Investors are members/owners of the LLC. The LLC owns the real estate assets. The fund also has 2 million dollars of management money in a first loss position to provide for liquidity, if necessary.

Are there any requirements to participate?

CRB Capital LLC is a Securities Exchange Commission (SEC) filed fund under Regulation D 506 (C)
Requirements to participate are: $25,000 minimum investment. You need to be a qualified or “accredited investor” which is: a natural personwho has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person. A natural person with income, exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.

What is the liquidity?

Investments that may need to be withdrawn in a short period of time should not be invested with CRB Capital. This is a high-return, low-liquidity investment. That being said, after six months, investors in the membership interests may request 24% of their funds returned per calendar quarter. Redemption requests will be contingent upon available cash flow, and will be completed on a first come, first serve basis. Hypothetically, provided that is adequate cash available, you could have all your money returned from this fund in 18 months. In the unlikely event that an investor has an urgent cash need, we will do our best to accommodate the request in a timely manner.

Are you able to purchase at deep discounts because you are buying the worst properties?

-We buy properties in profitable conditions in profitable areas.
-A Distressed Price Does Not Equal a Distressed Property.
-The situation of the previous borrower’s are distressed for a variety of reasons.

How is the investment structured?

The fund is very similar to a mutual fund that is not publicly traded. It is a private equity fund structured under an LLC. Qualified or “accredited” investors buy shares in the LLC, backed by commercial real estate.

Are there any management fees?

The Fund is a no-load Fund meaning there are no front-end or back-end fees. CRB Capital, the manager of the Fund gets paid after all investors get paid first and overhead fees are paid.

What are commercial notes?

A commercial note is a negotiable promissory note issued by a bank and payable to the bearer on demand. The amount payable is stated on the face of the note. Banknotes are considered legal tender and, along with coins, make up the bearer forms of all modern money.

Why are we buying commercial notes and commercial properties?

We have institutional relationships with many banks, special servicers and lenders to buy at commercial notes and properties at deep discounts. Three quarters of our acquisition are commercial notes that can convert into fee simple ownership through a foreclosure or deed in lieu of foreclosure.

How is the management company being paid?

CRB Capital, LLC Fund pays its creditors and investors first. After all fund obligations are paid, anything left over is paid to the management of CRB Capital.

Why are banks selling so cheap?

The banks are forced to sell due to new bank laws. Post 2008, banks have specific debt to equity ratios. For a bank’s balance sheet to meet the required ration of performing vs. non performing notes, they often need to sell some non performing notes. The urgency with which they need to sell leads to deep discounts for us. Distressed notes can go to a special servicer and the special servicer may need to unload this note to another provider such as CRB Capital who specialized in non performing notes.

Can investors participate in the upside gains?

No, we pay a fixed preferred rate of return to our investors. Our investors know exactly how much they are getting on a monthly basis. We pay our investors first before management gets paid.

Is this investment publicly traded?

No. CRB Capital LLC Fund is a non-publicly traded fund that is filed with the Securities Exchange Commission (“SEC”) under Regulation D 506©. This is an investment in a Private Real Estate Secured Fund.

How are investors taxed?

-Ordinary income tax
-Investors that are equity shareholders/member will get a k-1

Can I invest through my IRA?

Yes, there are a handful of Self Directed IRA custodians that have approved our fund to hold in their company. We can provide you with the list of custodians and help you with the process.

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