Capacity to Understand the Investment

Investors need to have the capacity to understand the fundamental aspects of the investment by reason of their educational, business, or financial experience.  A Cal BRE RE 870 Form is used to determine Qualified Investors.  

Ability to bear the Economic Risk

Investors can bear the economic risk of the investment up to 100% loss of the capital invested.

Suitable and Appropriate

The investment is suitable and appropriate for the investor, given the investors investment objective, portfolio structure and current financial situation.

Factors for Determining Suitablity

Information relevant for determining the suitability of the investment includes, at least, the age, investment objective, investment experience, income, net worth, financial situation of the investor and other investments currently held by the investor.

Qualified based on Income or Net Worth

Investors must meet the qualification that a single Trust Deed investment does not exceed (a) 10% of their net worth, exclusive of home, furnishings, and automobiles or (b) 10% of your adjusted gross income for federal income tax purposes for their last tax year or as estimated for the current year.

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