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FAQ

What is BlockBuyer?

BlockBuyer is a residential real estate crowdfunding portal that allows non accredited investors to invest from $500 to several thousand dollars in properties with other investors and a hands on Operator partner. BlockBuyer does not own any of the properties and is not involved in the transaction, except in providing a marketplace portal for Operators and Investors to come together.

Can I invest nationwide?

BlockBuyer’s legal guidelines with the SEC and/or Securities Department allows investors to invest only within their state. Investors are welcome to drive to their local property and get calibrated on the street, neighborhood, and review the rehab plan associated to the property.

No Property Management Fees, what’s the catch?
  • We don’t charge Property Management Fee’s (Typically Property Management Companies charge 10 to 15% of the rent received, this could result in $300 monthly fee on a $2000 per month rental).
  • Your agreement with your Operator partner explains that they will interact with renters for repairs, and handle them directly since they employ full time experienced repair crews.
How much money can I make on a Deal?
  • 15% is the Annual Return Rate (investing $1000 for 12 months results in receiving $150 Profit).
  • COCR is a ratio of the amount invested to the amount received as profit. Since there are no bank loans, the Annual Return Rate is equal to the COCR.
Why is Buying a property block (Crowdfunding) better than buying the entire property?
  • It is very hard for most people to handle everything required to “Successfully” buy a “Profitable” property. Statistically 70% of investment properties result in not being profitable to the investor, while everyone else in the transaction made money!
  • There are many many skills required to learn to be successful in buying a house and many ways of getting screwed by the industry sharks.
  • See the FAQ (Will I get Screwed?).
What is a Non-Accredited Investor?

A non-accredited individual investor is one who has a net worth of less than $1 million (including spouse) and who earned less than $200,000 annually ($300,000 with spouse) in the last two years.

Why do you only allow Non-Accredited Investors (Are Accredited banned)?

Accredited investors have had advantages over 93% of the population forever. BlockBuyer is making a stand to provide Non-Accredited investors (you), with access to deals normally reserved for the wealthy. Accredited investors will not have any advantages over everyone else on BlockBuyer.

What documents do I need to invest?
  • One form of ID: Drivers License, passport, State ID Card, military ID, or a voters Registration Card
  • Email address
  • Checking or savings account
  • Unlike other sites, we do not need: social security cards, income statements, tax returns, proof of funds, pay stubs, rental agreements, credit cards authorizations, power of attorney, your blood type, first born son….etc.
How do I make my investment?
  • Each investment will have an Invest Now button. Click this button and enter in an amount, and click Submit. Your payment will be made when the Minimum Goal amount for the deal is reached.
  • Note: You will need to set up your account profile with your bank name, account number, and routing number initially. If you did not complete your profile initially, you can enter this amount when submitting your investment amount.
Will I get Screwed?
  • BlockBuyer’s entire mission is to help prevent people from getting screwed in residential deals. We’ve created a Turn-Key system to reduce your risks, time, money, and effort learning the ropes over many (many) years.
  • Buying a profitable property on your own requires “many” skills used at “one time” (most only master a few skills):
    • Investing101: Preparing not to get screwed

      This includes putting in the effort of practically a PHD in residential real estate, and $10K to $50K in courses, videos, books, coaching, …. and the out of pocket cost of getting screwed by those with more knowledgeable.
      (FACT: The founder of BlockBuyer lost over $100,000 of his life savings by being screwed in house deals).

    • Saving Up:

      Buying an investment property by yourself, even with a loan, requires between 20% to 25% down, which could take many years to save up. Traditional low % down home loans don’t apply for investment properties. Don’t wait several years to save up and do it alone, invest with as little as $500 and get started investing on BlockBuyer.com.

    • Rehabbing It:

      managing a rehab project, managing vendors, managing the Contractor, figuring out what you’ve been overbilled for (EX: $800 toilet), ensuring all permits were filed (which are often skipped leaving you to deal with it years later!), evaluating the quality of work, and having plan B and Plan C for rehab delays and hidden issues…. This topic can go on and on…

    • Renting it:

      Advertising the rental, screening renters, renting it, appeasing renters, and evicting them (it happens and is a painful process).

    • Managing it:

      Managing tenants, managing repairs, managing the property management company (some of the biggest crooks), locating the right materials at the right price for rehabs, and managing a property, and BlockBuyer’s team has learned this via personal experience over many years.

    • Selling it:

      Analyzing the market (Never rely on agents alone to do this very important research), driving around to see competitor comps in person and taking good notes, creating a marketing plan with or without an agent, picking out all the options on a sales standard sales contract or creating your own with an attorney (these options can result attracting or detracting buyers instantly based on their emotional or logical reactions), finalizing the contract, listing the property, performing showings (cleaning your house weekly and ensuring current renters have it clean for showings can be a stressful experience). Narrowing your prospective buyers, qualifying them and anticipating their squirrely situations (so many to list), negotiating over things you did not think of, getting a contract signed (not so easy sometimes), receiving the buyers deposit payment in escrow, and finally performing all the requirements and repairs negotiated in the contract. Plan for some sales to fall out and have a plan for your renters to stay longer or allow it to be vacant until you sell.

What is an ACH payment?

Automated Clearing House (ACH) payments are an electronic funds transfer (essentially an electronic check) from one bank account to another. ACH cost less ($1.50) than Wire Transfers ($35-$45 each). ACH payments have been around for over forty years, and were developed with the intention of being faster, safer, and more efficient. Many employers use ACH payments to direct deposit paychecks and they have also gained popularity among individuals as a way to pay taxes and recurring monthly bills.

What are my costs or fees?
  • There is no cost for investors to invest! The sellers pay all of the fees, which are very very low.
  • If you invest and don’t have the funds in your account when they are processed, or if your bank account # or routing number was not correct then the bank will charge an Insufficient funds fee $20.
When will my investment be taken from my bank account?
  • After submitting your investment amount, you’ll be notified 24 hours prior to funds being pulled from your account.
  • Example:
    After submitting your investment amount, a deal may take a week (or more) to reach it’s Minimum/Goal Raise Amount. When this Minimum/Goal is reached you’ll receive an email letting you know that funds will be pulled from your account after 24 hours.
What type of deals do you offer?
  • Only residential properties
    1. Fix and Flip
    2. Fix and Rent
  • No commercial properties or complicated multi layered squirrely deals.
How do I get paid on my Rental Deals?

We will automatically direct deposit your payouts, profits, or profit share into your bank account quarterly based on the terms of your deal.

How am I protected and how do you keep things honest?
  • BlockBuyer designed it entire platform and deal terms to help investors not get screwed! We have seen almost every trick in the book, and designed in legal and controls to block them from happening to investors.
  • Your deal contract includes guidelines that investors will be paid first before the seller or repair crews, or based on a fixed return, profit share, or payout schedule.
  • The seller cannot sell the property before the contract ends, add loans or liens on the property, or do any tricky side deals that are common in the industry.
  • BlockBuyer’s platform was reviewed by the SEC and/or State Securities Regulation Office and has built in compliance standards to protect investors. This list is extensive and includes preventing the seller from adding hidden fees, changing deal terms, representing the property accurately, having a direct communication with their investors, disclosing if sellers are also major investors in a deal, as well as other things that keep things honest that Escrow will ensure.
  • We also use the latest version of security encryption and site security certificates while not saving your Banking info on our system nor emailing out personal information.
How is investor money exchanged for the property?
  • BlockBuyer uses only state approved and regulated Escrow companies to securely complete a traditional real estate closing transaction.
  • A formal Title Company performs title work on the property to clear it from all past issues, liens or holds.
  • In many cases a full Property Appraisal is completed to validate the properties current or after repaired value.
  • Because on most occasions, the property will be renovated, it would be a waste of funds to have a Termite or Property Inspector review the property. The repair crews are highly experienced addressing almost all repair issues commonly seen.
Do I pay for the repairs on my rental properties?
  • No, you do not pay for any repairs!
  • All contracts require the Operator (your partner and management company) to pay for and handle all repairs at their own expense.
Do I have to find and manage tenants in my rentals?
  • No, you do not!
  • All contracts require the Operator (your partner and management company) to find, qualify, and manage tenants.
Why BlockBuyer does not offer Loans?
  • Loans are risky, costly, require significant down payments, and requires you to invest alone without experienced partners that reduce risks.
  • Too many investors have lost their rental property to the bank when they have a bank loan for many reasons, not only limited to the rate adjusting.
  • Like stocks, you can buy blocks of houses on BlockBuyer. BlockBuyer’s crowdfunding model allows you to invest small amounts with friends, family, and even strangers.
What is an Operator?
  • The Operator is your hands on – on the ground - partner in investing, that is your secret weapon for managing risks.
  • They will submit the property deal on the site and are responsible for all content related to the property, images, documents, budgets, and project plan.
  • All rehab and repairs will be performed by the Operator.
  • You’ll receive updates, profit payouts, and income dispersments from Operators via BlockBuyer.
Can I sell my interest in a property anytime?
  • No. After owning an interest in the property/contract/agreement, you cannot sell until the established sell date listed in the deal summary.
  • Exceptions occur for death, and the ownership will be transferred based on guidelines of the will or legal stipulations.
Do I have voting rights?

No. Each property deal summary will list upfront deal terms that include the project’s Minimum/Goal Amount to be raised, investor compensation terms, and the established sale date. There are no decisions for investors to vote on since the project is pre-defined prior to investors investment.

How do I get paid?
  • Fix and Flip deals will be paid upon sale of the property.
  • Fix and Rent deals will be paid based on the deal terms, and may include quarterly payments and/or profit share upon sale.
What happens if the Operator files bankruptcy?
  • Legal agreements between the Operator and BlockBuyer dictate that if an Operator becomes insolvent, files bankruptcy or in any way demonstrates fraud, dishonesty, or lack of maintaining the property to appropriate rental standards, then BlockBuyer can take control of the property without the need for any further legal effort.
  • No Foreclosure proceedings are required since the property does not have any bank loans.
  • BlockBuyer has the ability to take control of the property and assign another Operator to the project or put the property up for sale and satisfy any profit share deal terms.
What happens if the renter does not pay rent?
  • The Operator is your partner and carries the responsibility to maintain renters in each rental property.
  • Based on the deal terms defined on each property (established prior to any investment), investors will receive their constructional compensation on schedule, and if payments are missed they are added to an accrual balance and are paid as priority payments to investors on sale before the Operator is paid.
What happens if repairs are not made as needed on rental properties?
  • The Operator is your partner and carries the responsibility to maintain the condition each property.
  • Based on the deal terms defined on each property (established prior to any investment), Operators must perform repairs at their own expense throughout the rental period.
  • If repairs are not made as needed, BlockBuyer has the ability to take control of the property and assign another Operator to the project or put the property up for sale and satisfy any profit share deal terms.
What communication do we have with Operator Partner?
  • All communication is made through BlockBuyer.com
  • Investors will be notified throughout the project and can login any time to view project updates, before and after pictures of rehab, Q/A of project, and deal specific situations.
What’s the max I can invest per year?
  • After registering and logging in, you’ll see your limit amount.
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