📝 Proposal stages
There are 4 proposal stages:
Details on the entire process can be found here: offer and acquisition process.
💪🏽 Working with Fractional: Expectations & Responsibilities
Leading a proposal may seem like a daunting task, but our Fractional Concierges are here to work with you every step of the way.
☎️ Schedule an initial consultation with Fractional: Even if you are a verified proposal creator, initial consultations are useful to discuss mortgage financing options, your project details, and how you can leverage our partner network.
Create a complete proposal: You must provide all required property and investment information. Please reach out to us with any questions if you cannot complete the investment proposal properly.
✍🏼 View our proposal creation guide here
Run a proposal discussion meeting: This is optional, but is highly encouraged. An initial meeting will be a great way for interested members to ask questions, and for you to clarify proposal details, and upcoming expectations and deadlines.
💬 View suggested proposal discussion agenda and discussion points here
If you decide not to set up a meeting, you will still need to choose a Launch Date for the proposal.
Launch and start funding proposal: The launch date is when the proposal will begin funding and taking deposits from interested members. Members are only guaranteed a spot after they put down a deposit (10% of their committed investment). You will need to set a deadline for the funding so members will know when they need to submit their deposits.
☎️ Draft and send an offer and purchase agreement: Once your proposal reaches full funding, set up a call with us to work on drafting and sending out the offer and purchase agreement.
☎️ Finalize and customize operating agreement: Once your property is under contract, set up a call with us to finalize the operating agreement. Fractional’s team of real estate and SEC lawyers have made co-owner legal agreements that protect and align all co-owners on how they want to operate their project. You’ll save thousands of dollars and time by not needing to find your own real estate attorney.
💬 View our operating agreement guide here
When the property is under contract, members will need to pay the full investment amount three business days before the closing date.. They will also sign the operating agreement once it is finalized.
LLC, Banking, Payment Portal, and Bookkeeping: Your group’s LLC entity and EIN will be filed by our team immediately after all members sign their co-ownership legal agreement. Fractional creates a business bank account for the LLC in a matter of seconds. Cash-flow distributions and capital calls from each owner’s individual accounts are automated and triggered directly inside the platform. You’ll be able to see the full ledger of categorized expenses and income related to your property.
K1s and Taxes: Fractional will issue a K-1 tax form for each investor, based on each investor's percentage ownership in the LLC’s profits or losses. We make appropriate depreciation deductions to decrease and defer your taxable rental income.
Voting portal: Vote directly on the platform with fellow co-owners to collaborate on issues such as raising rent, refinancing, changing the investment strategy, selling the property, etc.