Debt: Most debt investment offerings on EquityMultiple will be secured by the underlying real estate or by an interest in the property owning entity. In the event of a senior loan investment, foreclosure may be available as a remedy in the event of failure to pay.

Preferred equity: Preferred equity investments are not secured but do offer priority of payment. In other words, investors will typically be entitled to receive a preferred return and return principal before the common equity investors or Sponsor. Preferred equity investors typically hold some rights in the unlikely event of default. For more, please review this article.

Common equity: Common equity investments offer the potential for uncapped upside, but a higher risk of principal loss because debt holders and preferred equity holders (if any) are generally entitled to be paid before common equity holders receive payment.

With all investments on our platform, we pursue opportunities that we believe offer compelling potential risk-adjusted returns. However, it’s important to note that all investments carry risk and that interest, preferred returns and common equity distributions are not guaranteed and are dependent on overall business results.

What rights will I have? EquityMultiple will control the investment vehicle through which investors commit funds. Investors will have limited voting rights with respect to the EquityMultiple investment vehicle, but no voting rights in the property management company.

What happens if the sponsor defaults? The remedies available in the event of a Sponsor default will vary according to the investment structure (i.e., common equity vs senior debt) and the negotiated remedies of that particular investment. In general EquityMultiple or its affiliate will have limited cure rights and may be able to replace the manager in certain limited circumstances. EquityMultiple or its affiliate will, in its sole discretion, exercise the available remedies as it deems necessary to protect the best interests of investors.