Risk Disclosures
NoFeeREIT LLC wants to help you to make informed investment decisions, bearing in mind that investing is typically a long-term decision. The concept of risk and how it affects the value of investments is one of the most important aspects any potential investor needs to understand. Please read this document carefully.
Investment Risk
Investments are exposed to different kinds and degrees of risk. NoFeeREIT LLC wants to help you understand the complex subject of investment risk and how we seek to manage this when you receive our Service. For further information about the services NoFeeREIT LLC offers clients, please click here.
If you are in any doubt about the risks involved in investing, the services we provide or whether to invest with NoFeeREIT LLC, ask us or seek independent financial advice.
The value of your investments can go down as well as up, so you may get less than your initial investment.
When investing, there is always the risk that your investment could fall in value as well as rise. When investing in things that are not cash, there are no guarantees. Real Estate investments can be subject to large fluctuations in value, and income producing rental properties may also see their returns vary if vacancies exists or rents go unpaid. Everyone looking to make an investment does so for the opportunity, to make positive returns but in doing so, they must accept the possibility that they may end up with less money than they originally put in.
Risk vs. Return
The potential returns from an investment are, to some degree, linked to the risk an individual investor is willing to accept. In general, the higher the risk, the higher the potential return you (as investor) could potentially receive, but this is not always the case.
Unfortunately, by taking on more risk in the hope of achieving a greater return, the chance of losing money increases as well. None of the investments provided by NoFeeREIT LLC are risk-free, and you may therefore get back less than you initially invested. While NoFeeREIT LLC’s objective is to select investments with the potential to achieve the optimum level of return for your accepted level of risk, there can be no guarantees that the investment strategy will succeed.
What are the Risks?
- Economic downturn
- Housing market downfall
- Federal, State and Local laws- landlord tenant (i.e. Moratorium on evictions)
- Interest rate fluctuations
- Local Real Estate Tax law changes
Liquidity Risk
This investment will not work for someone who has a time sensitive liquidity need.
Investment Manager Risks
This is the risk of insolvency or poor performance of NoFeeREIT LLC in the management of the portfolio. In the unlikely event of an insolvency situation, your investments may be liquidated without your consent, and potentially at a loss.
Volatility
The value of all your NoFeeREIT LLC investments depends on market fluctuations and factors outside our control.
Tax
The tax treatment of real estate investments is subject to change, which could affect your investment in the future. The ongoing tax liabilities are determined by both your individual circumstances and the continued status of the investment. If you are unsure of your tax liabilities, you should consult a qualified tax advisor.
Other risks
Other risks include, but are not limited to, the following:
Investors may not benefit from the same entitlements as if they held the investment directly.
Investors cannot control the investments that are made within the RELP. This discretion is held by the Manager Partner.
Collective Investment Schemes (or “funds”)
A fund is a term that covers different types of structure. Each fund will typically already have its own preferred structure, so you will not normally be given a choice. Funds allow investors to pool their money in order to gain access to experienced managers, it also gives them greater buying power and access to opportunities that might not otherwise be available. Depending on the strategy of that particular fund, they may hold ‘riskier’ properties. Different funds will have different strategies, and will have different risks. The value of the fund (and the income derived from it) can go up as well as down (and you may get back less than you invested). Funds bear investment management risks, insolvency risks and liquidity risks, as well as sector/asset specific risks.
Investment Trusts
Investment trusts are similar to funds in that they are a means of investors pooling money. The prices of shares in an investment trust will depend on market fluctuations and also the value of their underlying assets. The value of the investment trust (and the income derived from it) can go up as well as down (and you may get back less than you invested). They will be subject to a combination of the risks associated with assets they are invested in.
Managing Risk
Some of these risks can be anticipated and will occur regularly. Other risks are completely unpredictable. Unprecedented world events occur all the time and it is impossible to predict them.
It may not be possible to predict what is going to happen but it is possible to manage exposure to potential problems. Past performance is not a guide to future performance. NoFeeREIT LLC’s objective is to design portfolios that can withstand unexpected shocks, while at the same time offering the opportunity for growth, whatever your individual risk appetite.
Risk and our Services
The level of risk each portfolio is exposed to is designed to be kept constant at all times. This means that NoFeeREIT LLC will not materially change the exposure to risk assets just because they happen to be doing well at a certain point in time.
Investing is not a short-term option
We want to help you to fully understand the risks involved in investing with NoFeeREIT LLC. However, investing may not be for everyone and you should seek independent financial advice if you are unsure.