Investors may receive distributions on Realbricks based on the terms of each offering. Learn how distributions are calculated, when they would be declared, and the factors that affect net operating income.
When you invest in a property on Realbricks, you acquire ownership interests in a company that owns real estate rather than purchasing the entire property individually. If a property is rented and generates net operating income from the lease, investors may receive distributions based on the terms of each applicable offering. Distributions, if declared, are allocated in proportion to the number of ownership interests, or shares, an investor owns. Distributions are not guaranteed and depend on factors such as whether the property is leased, rental income collected, operating expenses, reserves, and other property-level expenses.
It may be helpful to understand the differences between rental income from a distribution. Rental income is the amount collected from tenants under a lease. A distribution, if declared for an offering on Realbricks, is based on the property's net operating income after operating expenses have been paid, as detailed in the Offering Circular for each offering. Therefore, rental income is only one factor used to calculate potential distributions. This guide explains how distributions are calculated, when they would be declared, and the factors that can affect them.
Before any distribution is considered, the property associated with an applicable offering on Realbricks must first pay its operating expenses. These include property management expenses, maintenance and repairs, insurance premiums, property taxes, and other costs associated with owning and operating the property. The amount remaining after these operating expenses are paid is referred to as the property's net operating income. If a distribution is declared, a portion of the property's net operating income is distributed to investors in accordance with the terms of the applicable offering documents.
Because operating expenses can vary over time, two properties with similar rental income may generate different levels of net operating income. Likewise, the same property may generate different amounts from one period to the next.
Distributions are not guaranteed, and there are several reasons a property may not make a distribution during a given period:
There is no lease in place for a property. A newly built or newly acquired property does not generate rental income until it is leased to a tenant. Many of our newest offerings are new-construction homes that are still being completed or in the process of being leased. Such properties will not produce rental income until they are occupied. As a result, distributions are generally not expected while the property is not generating rental income.
Operating expenses exceed or substantially reduce the rental income. Operating expenses may reduce or eliminate net operating income for a given period if a property experiences a major or unexpected repair, a period of vacancy, or higher-than-usual operating costs.
The timing of distributions. Although rent may be collected monthly, distributions, if declared, are evaluated on a quarterly basis, after the quarter closes. Rental income and operating expenses are measured over the applicable reporting period before any distribution is considered. As a result, a property that is leased during a reporting period may generate limited or no net operating income for that period, depending on the timing of the lease commencement and related operating expenses.
These situations are part of the normal operation of residential rental properties and do not necessarily indicate that a property is underperforming. They can affect the property's net operating income, which in turn may influence whether a distribution is declared and the amount distributed. .
If a distribution is declared, it is allocated on a pro rata basis based on each investor's ownership interest in the offering. Each share receives the same distribution amount, so investors who own more shares receive a proportionately larger total distribution because they own a larger percentage of the offering.
The timing, amount, and frequency of distributions, if any, are determined in accordance with the governing offering documents and depend on the financial performance of the underlying property. Distributions may vary from period to period and may not occur.
Distributions paid are reported to investors on a 1099-DIV, the same tax form used for dividend income. Importantly, tax reporting for a Realbricks investment may differ from that of owning a rental property directly. This information is provided for general educational purposes only and should not be considered legal or tax advice. Tax treatment depends on an investor's individual circumstances. Investors should review the applicable offering documents and consult their own tax adviser regarding their specific situation.
Distributions represent a potential outcome of acquiring ownership interests in an entity that owns an income-producing residential rental property. They are not fixed payments and should not be expected in every reporting period.
Whether distributions are made depends on a variety of factors, including whether the property is completed, leased, generating rental income, and producing net operating income after expenses. Changes in occupancy, operating costs, maintenance requirements, market conditions, or other factors may affect the availability and amount of any distributions. Investing in real estate involves uncertainty, and past or projected property performance should not be viewed as an indication of future results.
Fractional real estate investments are intended to be long-term investments, and distributions, if declared, reflect the real performance of a real property with real costs.
All offerings listed on the Realbricks marketplace include offering materials that describe the property, investment structure, projected financial information, assumptions, and material risks. Investors are encouraged to review the applicable offering documents, including the Offering Circular, before making an investment decision.
Disclaimer: Investing in real estate involves risks, including the potential loss of capital. This content is for informational purposes only and is not intended as investment advice. Distributions are not guaranteed and depend on a property being tenanted, collecting rent, and generating net operating income; they may vary or may not be paid. Investors should perform their own research and consult with financial and tax professionals before making investment decisions.
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Terra Mint Group, Corp ("Terra Mint"), as the Managing Member of Neptune REM, LLC ("Neptune") operates the RealBricks.com website (the "Site") and is not a broker-dealer or investment advisor. All securities related activity is conducted through Dalmore Group LLC, a registered broker-dealer and member of FINRA/SIPC, located at 525 Green Pl. Woodmere, NY 11598. You can review the brokercheck for Dalmore. An up-to-date Dalmore Form CRS is available.
You should speak with your financial advisor, accountant and/or attorney when evaluating any offering. Neither Terra Mint, Neptune, nor Dalmore makes any recommendations or provides advice about investments, and no communication, through this website or in any other medium, should be construed as a recommendation for any security offered on or off this investment platform. The Site may make forward-looking statements. You should not rely on these statements but should carefully evaluate the offering materials in assessing any investment opportunity, including the complete set of risk factors that are provided as part of the offering circular for your consideration.
Neptune is conducting public offerings pursuant to Regulation A, as amended, through the Site. The most current offering circular for Neptune is available here. Past performance is no guarantee of future results. Investments such as those on the Realbricks platform are speculative and involve substantial risks to consider before investing. These risks are outlined in the respective offering materials and including, but not limited to, illiquidity and a complete loss of capital. Key risks include, but are not limited to, limited operating history, reliance on key personnel, inherent risks in investing in real estate, distributions may not be received on predictable schedule and or at all by Investors, and lack of voting rights. Also, the adverse economic effects of the COVID-19 pandemic remain unknown and could materially impact this investment. An investment in an offering constitutes only an investment in a particular series and not in the underlying asset(s). Investors should carefully review the risks located in the respective offering materials for a more comprehensive discussion of risk.
From time to time, Neptune may undertake "testing the waters" for additional series of securities to be offered pursuant to Regulation A. For offerings that have not yet been qualified, no money or other consideration is being solicited, and if sent in response, will not be accepted.
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AN OFFERING STATEMENT REGARDING THIS OFFERING HAS BEEN FILED WITH THE SEC. YOU MAY OBTAIN A COPY OF THE PRELIMINARY OFFERING CIRCULAR THAT IS PART OF THAT OFFERING STATEMENT FROM: Neptune REM, LLC 412 W Norfolk Ave STE 2, Norfolk, NE 68701 OR HERE.
Investment overviews contained herein contain summaries of the purpose and the principal business terms of the investment opportunities. Such summaries are intended for informational purposes only and do not purport to be complete, and each is qualified in its entirety by reference to the more-detailed discussions contained in the respective offering circular filed with the SEC.
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Neptune does not have a public trading market for its Series Interests. While it intends to seek a quotation on PPEX, an alternative trading system (ATS) operated by North Capital Investment Technology, Inc. (“PPEX”) with a view to providing our holders of Series Interests with potential liquidity in the form of a secondary market for their investment in our Series Interests. However, there can be no guarantee that a secondary market may develop, or if it does, as to the volume or pricing with respect to any secondary trading that might develop. The PPEX does not employ market makers to provide liquidity, unlike national securities exchanges. Until Neptune’s Series Interests are listed, if ever, you may not sell the company’s Series Interests. Therefore, it may be difficult for you to sell Neptune’s Series Interests at the time you wish to do so, if you are able to sell them at all. If you are able to sell your Series Interests, you may have to sell them at a substantial discount to their public offering price. Because of the illiquid nature of our Series Interests, you should purchase Neptune’s Series Interests only as a long-term investment and be prepared to hold them for an indefinite period of time.
Property information shown has been provided from various sources, which can include the seller and/or public records. It is believed reliable but not guaranteed and should not be relied upon without independent verification.
Disclaimer: Images, Information and Floor Plan and Measurements are approximate and are for illustrative purposes only. We make no guarantee, warranty or representation as to the accuracy and completeness of the floor plans, measurements and or any information provided. You or your advisers should conduct a careful, independent investigation of the property to determine to your satisfaction as to the suitability of the property for your space requirements. All pricing and availability is subject to change. The information is to be used as a point of reference and not a binding agreement.
