Realbricks for Entities: Open an Entity Account for Fractional Real Estate Investing

Realbricks is expanding the ways eligible investors can participate on the platform. In addition to investing as an individual, investors can now create an account and invest through an eligible legal entity.

Why Realbricks Is Expanding Access to Entity Investors

The Realbricks mission is to help more people participate in real estate investing by providing transparent, accessible investment opportunities designed to support long-term financial goals. Realbricks provides access to SEC-qualified offerings that are tied to real property assets.

Expanding account options to include eligible entities is another way to make the platform accessible to investors with different ownership and financial structures. Entity investors on the Realbricks platform can invest in offerings with a minimum investment of $1,000.

Some investors hold investments personally. Others establish businesses, companies, trusts, or other legal structures for business, estate-planning, investment-management, or other purposes. Allowing qualifying entities to establish Realbricks accounts gives these investors an additional way to access available offerings using an ownership structure they already maintain.

Entity investing does not change the underlying Realbricks investment. Investors continue to purchase ownership interests in the legal entity associated with a particular real estate offering rather than purchasing the underlying property directly.

For more information, check out this article on How Realbricks Works.

What Is an Entity Investor?

An entity is a legal organization that exists separately from an individual person. Depending on the circumstances, an entity might include a limited liability company (LLC), corporation, partnership, trust, or another eligible organizational structure.

When an entity invests through Realbricks, the entity (not the individual acting on its behalf) is the registered investor. 

For example, instead of an individual opening an account in their personal name and purchasing shares, an authorized representative may create an account for an eligible LLC and make investments through that LLC. 

Note: Although the investment account is established in the name of the Entity, the authorized representative is still required to complete identity verification and applicable checks as part of the account onboarding process. The individual completing the registration must have the appropriate authority to act on behalf of the entity. 

Investing through an entity does not change what the investment represents. Realbricks offerings provide ownership interests in an entity that owns the underlying real estate; investors do not acquire the property directly.

How to Create an Entity Account on Realbricks

Realbricks is updating its onboarding process so investors can identify how they intend to invest when creating an account. 

1. Create your Realbricks account

Begin by signing up through the Realbricks website or mobile app, available on Apple iOS and Google Play. During registration, investors are able to select whether they are opening the account as an individual or on behalf of an entity.

Individual investors will continue through the existing identity-verification process.

Investors selecting an entity account will proceed through an additional entity-verification process before the account can be approved for investing.

Investors with an individual account will not be able to transfer to an entity account. However, an individual has the ability to separately create an individual account and entity account(s) that are differentiated with a unique email address, subject to eligibility requirements and applicable terms. 

2. Provide information about the entity

Realbricks will request information needed to identify and verify the entity. Depending on the type of entity and applicable requirements, this may include information such as its:

  • Entity name
  • Entity type
  • Tax identification information
  • State or jurisdiction of formation
  • Business or mailing address
  • Authorized representatives
  • Supporting organizational documentation

The exact information required may vary depending on the entity and applicable regulatory requirements.

3. Verify the people associated with the entity

Financial platforms are required to perform verification procedures designed to identify their customers and comply with applicable Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. Realbricks already performs identity verification as part of its individual account-opening process.

For an entity account, verification may also include confirming the identity and authority of individuals associated with the entity, such as an authorized representative or individuals who own or control the organization.

This process helps establish both who the entity is and who is authorized to make investments on its behalf.

4. Connect an eligible bank account

Once the required entity and representative information has been reviewed and the account is approved, the investor can connect an eligible bank account associated with the entity and fund investments in accordance with applicable requirements.

Note: Realbricks conducts investment transactions in U.S. dollars. Investments on the platform are not conducted through cryptocurrency or tokenized assets. 

5. Review offerings and invest through the entity

After approval, the entity can begin making investments, reviewing available Realbricks offerings in much the same way an individual investor can. That entity review occurs separately and, under the current onboarding process, does not delay the entity’s initial investment once the authorized representative has passed KYC and the required banking information has been verified. The entity investor’s funds will be accepted and investment(s) finalized only after the entity review is complete and approved. Entity investors can invest in offerings on the Primary Market with a minimum investment of $1,000.

The ownership interests purchased through the entity account will be registered to the investing entity rather than to the individual representative who manages the account. Each offering provides information about the underlying property, investment terms, risks, and fees. Investors should review these offering materials before making an investment decision.

Note: Entity investors are not currently eligible to participate in the Realbricks Secondary Market. 

How Tax Reporting Works for Entity Accounts

Tax reporting is one area where investing through an entity may differ from investing through a personal Realbricks account.

For individual accounts, Realbricks investors may receive forms such as Form 1099-DIV for reportable distributions, Form 1099-B for certain sales or liquidation activity, and Form 1099-MISC in applicable circumstances. Realbricks does not issue Schedule K-1s to investors under its current investment structure.

With an entity account, tax information is associated with the entity's legal name and taxpayer identification information, rather than simply the individual representative's personal information.

The specific reporting requirements and tax treatment may depend on several factors, including:

  • The type of entity
  • How the entity is classified for federal and state tax purposes
  • The type of income or transaction involved
  • The entity's individual tax circumstances
  • Applicable federal, state, and local tax rules

As a result, the way an LLC, corporation, partnership, trust, or other entity reports a Realbricks investment may differ from the way an individual reports the same type of investment on a personal income tax return.

The creation of an entity account does not, by itself, determine how the investment will be taxed.

Realbricks will provide applicable tax reporting documents when required. Investors using entity accounts should provide accurate taxpayer information during registration and consult a qualified tax professional regarding how distributions, sales, gains, losses, or other activity should be reported for their particular entity.

The Realbricks Investment Structure Remains the Same

Whether an investment is made by an individual or an eligible entity, the underlying Realbricks model remains the same.

Realbricks provides access to SEC-qualified real estate offerings. Investors purchase ownership interests in the entity associated with an individual property rather than acquiring direct ownership of the real estate.

If a property generates positive net operating income and a distribution is declared, investors may receive distributions based on their ownership interest. Distributions are not guaranteed and can vary based on rental income, occupancy, operating expenses, reserves, financing obligations, and other property-level factors.

Realbricks handles property operations for investors, coordinating property acquisition, tenant placement, property management, maintenance, financial reporting, and other administrative functions associated with the offerings.

More Ways to Participate, One Platform

Adding entity accounts expands the ways eligible investors can access Realbricks while maintaining the same focus on transparency, accessibility, and education.

Investors can choose the account structure that reflects how they intend to hold their investment, complete the applicable verification process, review available offerings, and manage their Realbricks investments through the platform.

Whether investing individually or through an eligible entity, investors should carefully review the applicable offering materials, understand the risks involved, and consider their own financial, legal, and tax circumstances before investing.

Create a free account today! 

You can explore available properties on the Realbricks marketplace. Take time to review the Offering Circular and consider whether the investment structure, risks, and potential outcomes are consistent with your own financial situation and investment objectives.  

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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. A debt-free property structure reduces certain risks but does not eliminate the risks of real estate investing, including vacancy, maintenance costs, and changes in property value. Distributions are not guaranteed and depend on a property being tenanted, collecting rent, and generating net operating income. Investors should perform their own research and consult with financial professionals before making investment decisions.