Frequently Asked Questions

  • What is a Real Estate Investment Trust (REIT)?

    A REIT is a corporation that combines capital from many investors to buy and operate income-producing real estate. It gives investors a low cost opportunity to include commercial real estate in an investment portfolio. Also, REITs avoid the “double taxation” treatment of income that would result from an investment in a corporation, because REITs do not pay taxes if certain standards are met, including the distribution of at least 90% of income that would otherwise be taxable. Hence, REITs are focused on generating and distributing income in the form of dividends to their shareholders.

  • For whom are REITs an appropriate investment?

    Investors who want to (1) generate current income as well as opportunities for longer-term value growth, and (2) diversify an investment portfolio, will find REITs an attractive supplement to an existing investment strategy. Investors should be mindful that there is no guarantee that the targeted return or distribution rate will be achieved. You should carefully review the offering documents, including the prospectus, prior to making an investment.

  • What is unique about RichUncles.com?

    RichUncles.com was founded by Ray Wirta and Harold Hofer to make direct real estate investment easy and affordable for the smaller investor. Other REITs that, like Rich Uncles NNN REIT, are not listed on stock exchanges (so-called “non-traded” REITs), often raise investor capital through a commission-based distribution system that involves paid intermediaries such as broker-dealers and financial planners. The total commission and fee structure related to raising investor capital via this distribution channel is typically 10% of the overall offering proceeds. In other words, approximately 10% of the cost of the REIT shares is spent on commissions and related fees in these other non-traded REITs. RichUncles.com does not pay commissions. Our method of distribution is the internet and our web site. Our goal is to attract qualified potential investors to www.RichUncles.com utilizing print and on-line advertising, newspaper and magazine articles, blogs, and search engine optimization. We believe that with the ease of access to the internet and the transparency of the internet, RichUncles.com can deliver a real estate product to the market that has 10% more of the investment amount actually being invested in real estate rather than being paid to others in the form of commissions. This is the primary way that we are unique and different.

  • Is Rich Uncles NNN REIT available to foreign investors?

    Shares in Rich Uncles NNN REIT may be purchased by anyone who is not a resident of the United States, subject to local securities laws.

  • What percentage of the gross proceeds from the sale of shares in Rich Uncles NNN REIT will be used for investment?

    97% of the gross proceeds from the sale of shares will be used for investment. The remaining 3% of the gross proceeds will pay for organization and offering costs. Before investing you should carefully review the prospectus for a full discussion of fees and costs that will be charged.

  • Why should I invest in a REIT that is not listed or traded on an exchange?

    History has shown that traded REIT valuations (represented by share price) are variable, with such share prices sometimes being higher or lower than “Net Asset Value” (the calculation of (1) the current between traded REIT share prices and NAV. Non-traded REITs such as Rich Uncles NNN REIT do not have this issue. Additionally, annual dividends for traded equity REITs have averaged below 4% over the past three years (source: NAREIT.com ). Qualified potential investors are encouraged to study assets already purchased by Rich Uncles NNN REIT, as disclosed elsewhere on this web site and in the Prospectus, to compare the dividend yields being generated by Rich Uncles NNN REIT to the dividend yields being generated by traded REITs (past performance is not a guarantee of future results).

  • If I buy shares, will I receive distributions and how often?

    Distributions are scheduled on a monthly basis. The amount of each distribution is determined by our board of directors and will depend upon cash availability as well as current and projected cash requirements. Remember though, in order to remain qualified as a REIT, we must make distributions of at least 90% of our annual REIT taxable income. The payment of any distributions, and that profits will be obtained from your investment, are not guaranteed.

  • When does an investor begin to earn distributions?

    We will calculate our monthly distributions based upon the week an investor purchases shares in Rich Uncles NNN REIT. Therefore, investors will receive a pro-rated distribution at the end of the first partial month during which they acquired shares. The payment of any distributions, and that profits will be obtained from your investment, are not guaranteed.

  • If I buy shares in this offering, will I be able to sell them later?

    Shares in Rich Uncles NNN REIT qualify for its Share Repurchase Program, as described in the Prospectus. Your shares may be redeemable each month through this Rich Uncles’ program, but this program is subject to limitations and fees as discussed in the prospectus.

  • Will the distributions I receive be taxable as ordinary income?

    Generally, distributions that you receive will be taxed as ordinary income. We expect that some portion of your distributions may not be subject to tax in the year received due to the fact that depreciation expenses reduce taxable income. This defers a portion of your tax until your investment is sold or liquidated, at which time under current tax laws you will be taxed at capital gains rates.
    Disclosure

  • When will you report to me on the status of my investment and when will I receive tax return information?

    RichUncles.com will provide you with monthly updates on the performance of Rich Uncles NNN REIT. Additionally, your Form 1099 tax information will be mailed on or around January 31 of each year.
    Disclosure

  • What is a Prospectus?

    A Prospectus is a legal document that discusses the investment program for which money is solicited. A Prospectus typically includes sections that describe how the solicited money is to be invested, the investment’s business plan, risks associated with the investment, the background and track record of the sponsors, the legal rights and responsibilities of the investors, and more.

  • What is a "cap rate"?

    A "cap rate", or capitalization rate, is the expected first year return on an "all-cash" real estate acquisition. For example, if you purchase a property, whose rent less expenses during the first year of ownership is forecasted to be $80,000, for $1,000,000, then your cap rate is 8% ($80,000 divided by $1,000,000 equals 8%). If you were able to purchase the same property for a lower price, say $800,000, then your cap rate would be 10% ($80,000 divided by $800,000 equals 10%). Thus, cap rate and purchase price have an inverse relationship - the higher the cap rate, the lower the price.

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