Investing With Lone Star Capital
Is there a minimum investment amount?
Yes, the investment minimum is usually $100,000. Larger investment sizes are prioritized over smaller investments.
When will I receive distributions from my investment?
Lone Star’s investments typically offer monthly distributions which begin within the first quarter of ownership. Some investments make distributions on a quarterly schedule which may only start after six months of ownership.
What is an accredited investor and do I need to be one?
Federal laws require that companies register with the Securities and Exchange Commission (SEC) prior to selling any securities to investors. These laws are designed to protect investors. However, there are certain exemptions to this registration requirement. One exemption from registration is provided by Regulation D, which allows companies to offer securities to “accredited investors” in a private offering. Accredited Investors are defined by the SEC as individuals with income exceeding $200,000 annually ($300,000 per couple) with the expectation of that continuing, or a net worth of more than $1 million, excluding the value of the primary residence.
Lone Star Capital offers investments which are available to accredited investors and some investments are also available to non accredited investors on a limited basis.
What does it mean for an investment to be oversubscribed?
It is common for Lone Star’s investment offerings to fill up quickly and become oversubscribed, meaning there are more soft commitments to invest than the total equity raise. Lone Star accepts investments on a first come, first serve basis determined upon funds actually being received in the investment/escrow account. Due to unforeseen circumstances, investors may not follow through with their initial commitment. This means that even if an investment is oversubscribed, there is still a possibility that a spot will open up for you.
Can I invest with my self directed IRA account?
Yes! Given the additional complexity of investing via an IRA, it is best to start the investment process early in the fundraising timeline. The steps that need to be taken prior to funding are as follows: provide your custodian with the offering documents for approval, sign the offering documents, and have your custodian remit investment funds.
Can I sell or transfer my position in an investment?
Yes. while Lone Star cannot guarantee the viability of a sale or transfer of an investor’s position, the legal documents do permit this action and Lone Star will help facilitate to its best abilities.
Are these investments risky?
As with any investment, there is no guarantee of success. Lone Star focuses heavily on mitigating risks which are able to be controlled. However, investments are always subject uncontrollable risks such as economic cycles and changes in interest rates.