A. Co-owner matching: 
* Fractional matches you with other compatible investors to co-purchase a property. 
* B. Entity formation: 
* Fractional sets up an LLC in the state of the property. Fractional handles filing of paperwork, obtaining an EIN, and issuing K-1s. 
* C. LLC Operating Agreement: 
* Fractional’s governance model aligns all co-owners on handling scenarios such as ownership transfers, voting procedures, repairs, and expenses. 
* D. Financing: 
* Fractional’s lending partners provide short-term and long-term loans for LLC-owned property. 
* E. Banking: 
* Fractional creates a bank account for the LLC and supports deposits, rental distributions, expense withdrawals, and a reserve for the property. 
* F. Property closing: 
* A Fractional agent partner will make an offer, work through the due diligence process, and successfully close the property.

Fractional is for everyone - from novice investors to real estate gurus and everyone in between. Fractional is designed to make real estate investing intuitive, inclusive, and collaborative.

As little or as much as you'd like to. Some investors have a hands-on management style, while others take a more relaxed approach.

Fractional appraises the increase in home value and rent for optional and expensive repairs and remodels. Co-owners who choose to fund repairs and remodels will receive more upside based on the appraisals.

The Fractional co-ownership agreement establishes a governance model for a successful partnership. These arguments are customizable based on group needs and address topics such as membership responsibilities, voting processes, ownership transfers, capital calls, defaults and dispute resolutions. 
* Fractional's co-ownership agreement saves you thousands of dollars in legal fees.

Fractional handles the day-to-day operations so you can focus on the things that matter. 
* Co-owners can collaborate on: 
* A. Hiring and firing third party service providers such as property manager and insurance 
* B. Refinancing 
* C. Sale and terms of sale of the property 
* D. Costly repairs and renovation projects

Fractional saves you money: on average, we save investors 25% of their normal costs. We also save you time: our investors automatically access the best real estate agents, attorneys, and property management companies. Lastly, Fractional guides you through the entire investment and ownership process.

Fractional gives you all the benefits of direct ownership. At Fractional, investors have ultimate control and can sell on their own timeline. We provide higher returns through significant tax benefits and no annual fees. Private REITs and crowdfunding platforms lock you in for long hold periods. You can lose 40% or more of your annual rental income due to annual fees and taxes on other platforms. Lastly, dividends distributed from REITs and crowdfunding platforms are subject to ordinary income tax and cannot be written off with expenses and standard rental property depreciation deductions

Absolutely! If you invest with a pre-formed group, we will provide a 25% discount on all Fractional fees.

No! We will use data collected from the onboarding process to match you or your group with other like-minded investors

Most groups have 2-10 investors, but you’re allowed to go up to a maximum of 100 people per group. Keep in mind that more co-owners may make reaching alignment more difficult.

Yes, you’ll see a roster of your fellow co-owners upon group formation.

Yes! Fractional’s lending partners can provide mortgages for LLC-owned rental properties. Interest rates and required down payment amounts will vary based on the location, property type, and loan type.

You’re welcome to bring your own conventional lender. However, note that all co-borrowers on the mortgage are wholly responsible for the entire debt. For example, even though you only own 25% of the property, you are still responsible for 100% of the debt.

Fractional’s lending partners offer interest rates for as low as 3.875%. Traditional rental or commercial lenders offer rates around 6% and often require a personal guarantor responsible for the loan of the entire property.

No. Unlike conventional lenders or traditional rental or commercial lenders, Fractional does not require any co-owners to be a personal guarantor for the entire loan of the whole property. You will only be solely responsible for your part of the loan based on your share of the property.

Like any traditional or corporate buyer on the market, Fractional offers are not guaranteed. Don’t fret, our modeling strategies create competitive, appealing, and fair offers. We haven’t had issues finding our customers the perfect investment property!

Our users and real estate partners submit properties onto the Fractional Marketplace. Then, we leverage multiple data providers to present financial estimations and risks (hazard, flood, earthquake zones, vacancy rates, etc.) on each property.

Yes. Fractional’s real estate agent partner asks the seller to make repairs or a price reduction to compensate for items that are not working as intended.

For all properties, we schedule a standard residential inspection paired with a termite, pest, and rodent evaluation. Other inspections such as septic, structural, radon, and mold may be ordered if needed. Inspection results will be shared with all potential co-owners.

Fractional’s service fee applies towards the banking, ledger, and distribution services provided. It does not include property management. 
* However, Fractional's property management partners provide discounts for all Fractional users. They only charge 6% of the monthly rent instead of the standard 8-12%. Our partners also offer a year of eviction services for free.

Fractional charges: 
* A. One-time fee - 2% of the property’s closing price. 
* B. Recurring monthly service fee - 2% of the rent.

Fractional will save you 40% of your returns compared to other platforms. We charge zero asset management or trust fees while also providing immense tax benefits from direct ownership. Crowdfunding platforms, syndicates, and REITs charge 10-20% in asset management fees.

Yes! You can submit properties to be added to the Marketplace through https://www.fractional.app/marketplace. If the property is in an area we do not currently support, you will need to choose a realtor and property management company to invest in the property.

Fractional currently supports residential and multi-family commercial real estate, from a single-family, to a duplex, up through a multi-hundred unit apartment building.

Fractional primarily operates in Georgia, Texas, and Florida. However, we support properties in any location in the US if your group uses your own realtor and property manager.

We consider your income, assets, credit score, and debt in our qualification process. We only perform a soft credit check, which will not impact your credit score. 
* Our process adds assurance to all co-owners that they are only investing with equally qualified individuals.

Fractional is available to everyone with a Social Security Number (SSN) or Tax Identification Numbers (TIN).

Your rental income amount is based on your percentage ownership of the property. For example, if you own 10% of the property, you will receive 10% of rental income less expenses.

Rental income distributions are directly deposited via ACH transfers to your bank account.

You will be paid on the 15th of every other month (February, April, June, August, October, and December).

Your investment will not be impacted as you are the true owner of the property. Co-owners can choose to continue managing the property together, or sell the property to unwind the investment partnership.

Standard property insurance acquired will cover the most important liability-related aspects and provide coverage for damages caused by fire, flooding, theft, weather, and other risks. 
* Renters insurance will be required for tenants

We use a third-party appraiser and leverage comps from multiple data sources to determine the fair market value of the property at the time you wish to sell your shares. 
* Your shares’ worth are pro-rata to the fair market value of the property.

There are three ways you can sell, any time you want:
1. Sell back to Fractional at 80% of fair market value at that time. For example, if you owned 25% of a property with a FMV of $200,000, you can exit at $200,000 x 25% x 80% = $40,000. 
2. Sell to other investors on the Fractional Secondary Marketplace with a 5% transfer fee. 
3. Sell the entire property upon approval from co-owners.

Absolutely. Fractional’s direct ownership model enables all co-owners to defer their taxable income (through expenses and standard rental property depreciation deductions) and defer their capital gains taxes (through the 1031 Exchange). 
* With REITs, you are unable to leverage any of the above tax benefits

Yes! This allows you to defer paying capital gains taxes when you sell an investment property if you reinvest the proceeds from the sale in a property of equal or greater value within a specific time period.

Taxes with Fractional properties are the same as they would be if you directly owned the property. Fractional sends an annual K-1 tax form based on your percentage ownership of the property. We automatically factor in expenses and standard rental property depreciation deductions to defer your taxable income.

An LLC in the state of the property is set up to hold title to the property. Co-owners are members of the LLC, with Fractional as an administrator.