What do I own when I invest in real estate through Sharestates?

Sharestates offers two types of investments: Borrower payment dependent notes (Notes) and Limited Liability Company (LLC) Membership Units. Sharestates Notes are debt securities (notes) directly linked to the performance of a corresponding project investment. The Notes are unsecured special obligations of Sharestates. Our obligation to make payments on the Notes is entirely dependent on Sharestates receiving a payment from the corresponding project investment sponsor.

The projects the sponsors undertake can be renovation, purchase, refinance, or construction of the underlying asset/property and this type of investment is called a ‘real estate debt investment’. Sharestates, through its marketplace, offers investors the opportunity to purchase the notes fractionally – with minimum $1000 per note, or up to the entire note (whole note). When Sponsors make payments on their loans, Sharestates passes those payments on to investors. When Sponsors pay off their loans, investors receive the full payment due to them based on their initial investment.

The second investment type comes in the form of Limited Liability Company (“LLC”) Membership Units. In essence, you will own a piece or slice of the subject property. When you purchase a Membership Unit in a LLC, you’re purchasing rights to a portion of that company. Accordingly, you’ll be entitled to a share of the profits and losses attributable to that company.  


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