So You’ve Decided to Invest With Midloch …   What Happens Next?

You’ve decided to invest with Midloch Investment Partners — for diversification, with the goal of generating income and appreciation, based on our track record, as a hedge against inflation, or for some other reasons. We thank you in advance, and certainly appreciate your trust. Over 1,000 investors have made the same decision!

Now What Happens?

Federal regulations and plain old practicality require a couple steps before we can receive your investment. These next steps may feel tedious, but the hoops are few and it’s important to do this correctly so there are no hiccups later. We are here to help!

We need three things from you:

• An indication of how you plan to invest, including your Social Security number or other tax ID
• Verification of your income or net worth, or letter from a qualified professional verifying the same
• Your bank account information so we know where to send your proceeds, including any distributions (similar to dividends) and your share of the appreciation when we sell property at a gain

That’s it!

Here’s more detail on each of the steps.

1 - An Indication of How You Plan to Invest

You can invest in Midloch funds or sidecars three different ways:

• As an individual

- Using after-tax dollars outside of a retirement account

- Using pre-tax dollars inside of a retirement account

• As an entity such as a revocable trust or LLC
• As a joint tenant if you are investing as a couple

The decision is up to you.

It may be helpful to consult your attorney and/or tax advisor when making this decision, particularly if you have questions before you check the box and provide your tax identification number. While you can technically change your status later, it’s best to avoid it if possible. A change in status can only be made in a very narrow window, and may delay your receiving distributions.

2 - Verification of Your Accredited Investor Status Through Proof of Income or Net Worth

Midloch investments are securities registered with the U.S. Securities and Exchange Commission (SEC). The Feds require investors in these types of securities to demonstrate they have annual income of over $200,000 for an individual investor or $300,000 for a married couple investing jointly OR a net worth of over $1 Million excluding your principal residence. This verification qualifies you as an accredited investor.

Your income and net worth both may exceed these thresholds — that’s a good thing! But the SEC requires that you meet only one of the tests.

This requirement is not unique to Midloch. It applies to investors in a broad range of real estate and non-real-estate securities. The main reason the SEC requires investors be accredited before making these types of investments is for their own protection. Essentially, qualifying as an accredited investor demonstrates you have the capacity to endure a loss of invested principal in the event that happens, and are able to tie up money in private investments that can be illiquid. (You can read more on the SEC website.)

If you have any questions about the thresholds, contact one of us. Also, so you know, any financial information provided to Midloch is held strictly confidential.

Demonstrating your income or net worth is easy. The SEC allows us to verify your status one of three ways:

• Net Worth: To verify net worth above $1 Million, you can provide brokerage account statements, bank statements, or evidence of real estate holdings not including your principal residence. The net-worth test requires a PDF download of actual statements or investment reports; screenshots of statements are not acceptable.

In order to use the net-worth test, we also need a debt statement, including any credit cards/car loans, outstanding loans (other than a mortgage on your primary residence), student loans, or other debt. If you do not have any debt, an email confirming as much will suffice.

• Income or W-2s: To verify your income ($200,000 or more per year as an individual or $300,000 or more as a couple), you can provide W-2 stubs or tax returns for the prior two years. (The front page of the tax returns is sufficient.)

• Advisor Letter: Any lawyer, CPA, or RIA can sign a letter verifying your income or net worth. (We can send a standard letter to your advisor for review and/or to use as a template.) If you don’t have access to one of these professionals or prefer not to use them, we can accept a letter from a service that Midloch provides free of charge called Verify Investor. Just let us know if you want to do that.

3 - Your Bank Account Information So We Know Where to Send Proceeds

Finally (and this is the most fun, easiest step!), we need your bank account information so we know where to send any proceeds, including distributions from investment property cash flow and appreciation from the gains on any property sales. All of your proceeds can be sent by direct deposit or by check through the mail. You can indicate your preference in your subscription documents or directly in your online portal account.

There you have it — just three steps!

Let us know if you need any help gathering the information. We are at your service.

Thanks again for investing with Midloch. We hope it’s the beginning of a long, beneficial relationship.

In a future blog post we will explain what to expect after you’ve invested, including how we provide tax-reporting information and how to reinvest in Midloch funds.