A Millionacres reader recently reached out to us about Caliber, a company that hopes to raise millions through a Series B crowdfunded round. Through the SeedInvest platform, real estate investors can put in a minimum of $2,000. Investors do not have to be accredited, as this is a Regulation A+ offering set to close on Feb. 26, 2021. As of this writing, according to SeedInvest, Caliber has raised over $4.3 million from over 1,000 investors. The fund is registered with the SEC, and offering documentation can be found on SeedInvest.
What is Caliber?
Caliber began in 2009 as an owner of a portfolio of single-family homes for rent or sale. Over time, it expanded into other areas, including multifamily properties and commercial real estate.
Caliber is an asset manager of private equity real estate funds and provider of real estate services, with many different arms to its business. It provides capital-raising services to the private equity funds it manages, as well as for third parties, including developers and brokerages. Caliber says it has $400 million under management and has raised funds for its real estate businesses for over 1,000 accredited investors. In looking at its offering documents, it appears to be generating a profit at this time. The company itself is valued at $130 million.
Caliber focuses on eight segments, broken down into two categories: services and operations. Services address what the company does, including fund management, construction, property management, and operating as a real estate brokerage. The operations segment spans hospitality, residential, commercial, and diversified properties. It runs operating partnerships for unrelated passive investors and invests in Alaska, Arizona, Colorado, Nevada, and Utah.
What do investors get?
Investors in the Series B funding round receive preferred stock. What this means is that if Caliber goes into bankruptcy, investors should be able to get their original investment back. Because this is a crowdfunding investment, you also see the type of incentives that come with crowdfunded investments into creative projects.
For example, a $50,000 investment gets you a plaque at the Caliber-owned DoubleTree by Hilton hotel in Tucson, Arizona. This is cute but not really of material value. Instead, the proposed value here is that the company plans to go public and thereby deliver a return for its pre-IPO investors. Caliber CEO Chris Loeffler has estimated this could be within 12 to 18 months, but this is by no means a guarantee.
Per the terms of the purchase agreement, the maximum offering in the Series B is 12,500,000 shares, and the minimum offering is 250,000 shares. Shares on SeedInvest are $4 each, so the $2,000 minimum investment gets you 500 shares.
It's important to note you're investing in the company itself, not the real estate. Those opportunities at this point are only available to accredited investors or registered investment advisors. When you invest, your funds are placed into escrow. If the minimum offering isn't met and the round isn't completed, your money will be returned to you.
Caliber is also not the only real estate company using SeedInvest to raise funds. Groundfloor, a crowdfunding company that specializes in short-term residential property loans, has so far raised over $3.8 million on the platform.
The Millionacres bottom line
Investing in either of these offerings carries more risks than investing in real estate investment trusts (REITs) or even in some other crowdfunding deals. Instead, you're acting as venture capital, betting on the overall success of the company as a whole. If you're interested in investing in Caliber, read all of the SEC documents and filings before committing.