Investor Relations

Frequently Asked Questions (FAQs)

  • In general, a real estate investment trust, or REIT, is a company that:
    • offers the benefits of a diversified real estate portfolio under professional management;
    • is required to make distributions to investors of at least 90% of its taxable income for each year;
    • avoids the federal “double taxation” treatment of income that generally results from investments in a corporation because a REIT is not generally subject to federal corporate income taxes on the portion of its net income that is distributed to the REIT’s stockholders; and
    • combines the capital of many investors to acquire or provide financing for real estate assets.
  • We plan to own substantially all of our assets and conduct our operations through Steadfast Secure Income REIT Operating Partnership, L.P., a Delaware limited partnership organized in July 2009, which we refer to as our operating partnership. We are the sole general partner of our operating partnership. Because we will conduct substantially all of our operations through an operating partnership, we are organized in what is referred to as an “UPREIT” structure.
  • UPREIT stands for Umbrella Partnership Real Estate Investment Trust. We use the UPREIT structure because a contribution of property directly to us is generally a taxable transaction to the contributing property owner. In contrast, a contributor of a property who desires to defer taxable gain on the transfer of his or her property may transfer the property to our operating partnership in exchange for limited partnership interests and defer taxation of gain until the contributor later disposes of his or her limited partnership interests. We believe that using an UPREIT structure gives us an advantage in acquiring desired properties from persons who may not otherwise sell their properties because of unfavorable tax results.
  • Allocating some portion of your investment portfolio to commercial real estate investments may provide you with (1) portfolio diversification, (2) a reduction of overall portfolio risk, (3) a hedge against inflation, (4) a stable level of income relative to more traditional asset classes like stocks and bonds and (5) attractive risk-adjusted returns. For these reasons, commercial real estate has been embraced as a major asset class for purposes of asset allocations within investment portfolios.
  • An investment in our shares may be beneficial for you if you meet the minimum suitability standards described in this prospectus, seek to diversify your personal portfolio with a REIT investment focused on investments in high quality multifamily properties and other real estate and real estate-related assets, seek to receive current income, seek to preserve capital, seek to realize potential capital appreciation in the value of your investment and are able to hold your investment for a time period consistent with our liquidity strategy. On the other hand, we caution persons who require immediate liquidity or guaranteed income, or who seek a short-term investment, that an investment in our shares will not meet those needs.
  • Yes. Our sponsor has invested $200,007 in us through the purchase of 22,223 shares of our common stock, and our advisor has contributed $1,000 in exchange for 1,000 shares of our convertible stock. In addition, on October 13, 2009, we commenced a private offering of up to $94,000,000 in shares of our common stock, subject to an option to increase the offering by up to $18,800,000 in shares of our common stock, at a purchase price of $9.40 per share (with discounts available for certain categories of purchasers), which we refer to as the “private offering.” We are offering shares of our common stock for sale in the private offering pursuant to a confidential private placement memorandum and only to persons that are “accredited investors,” as that term is defined under the Securities Act and Regulation D promulgated thereunder. As of June 8, 2010, we had received aggregate gross offering proceeds, net of certain discounts, of approximately $3,498,366 from the sale of approximately 381,195 shares in the private offering. We intend to terminate the private offering upon the commencement of this offering.
  • No. This offering is a “blind pool” offering in that we have not yet identified any specific real estate assets to acquire using the proceeds of this offering. As a result, you will not have the opportunity to evaluate our investments prior to purchasing shares of our common stock. If we are delayed or unable to find suitable investments, we may not be able to achieve our investment objectives.
  • Through the dealer manager, we are offering a minimum of $2,000,000 in shares of our common stock and a maximum of $1,500,000,000 in shares of our common stock in the primary offering on a “best efforts” basis at an initial price of $10.00 per share. We are also offering $150,000,000 in shares of our common stock pursuant to our distribution reinvestment plan at an initial price of $9.50 per share to those stockholders who elect to participate in such plan as described in this prospectus. We reserve the right to reallocate the shares of common stock we are offering between the primary offering and our distribution reinvestment plan.
  • We will offer shares of our common stock to the public in the primary offering at an initial price of $10.00 per share. Shares of our common stock will be issued to our stockholders pursuant to our distribution reinvestment plan at an initial price of $9.50 per share. If we extend this offering beyond two years from the date of its commencement, our board of directors may, in its sole discretion, from time to time, change the price at which we offer shares to the public in the primary offering or pursuant to our distribution reinvestment plan to reflect changes in our estimated net asset value per share and other factors that our board of directors deems relevant. If we determine to change the price at which we offer shares, we do not anticipate that we will do so more frequently than quarterly. Our advisor will calculate our estimated net asset value per share by dividing our net asset value by the number of shares of our common stock outstanding. Our net asset value will be determined by subtracting (1) our liabilities, including the accrued fees and other expenses attributable to this offering and our operations, from (2) our assets, which will consist almost entirely of the value of our interest in our operating partnership. The value of our operating partnership is the excess of the fair value of its assets (including real estate properties, real estate related assets and other investments) over the fair value of its liabilities (including debt and the expenses attributable to its operations), as determined by our advisor, which, following the completion of our offering stage (as defined below), will be based upon periodic valuations by independent third party appraisers and qualified independent valuation experts selected by our advisor. See “Will you provide stockholders with information concerning the estimated value of their shares of common stock?” below. If we revise the price at which we offer our shares of common stock prior to the completion of our off
  • Yes, we will publicly disclose an estimated net asset value per share of our common stock every six months beginning no later than six months following the completion of our offering stage (as defined below). Our estimated net asset value per share will be determined by our advisor and approved by our board of directors based upon periodic valuations of all of our assets by independent third party appraisers and qualified independent valuation experts selected by our advisor. We will consider our offering stage complete on the first date that we are no longer publicly offering equity securities that are not listed on a national securities exchange, whether through this offering or follow-on public equity offerings, provided we have not filed a registration statement for a follow-on public equity offering as of such date (for purposes of this definition, we do not consider “public equity offerings” to include offerings on behalf of selling stockholders or offerings related to a distribution reinvestment plan, employee benefit plan or the redemption of interests in our operating partnership). For more information on how we intend to determine our estimated net asset value per share, see “Description of Capital Stock — Estimated Net Asset Value Per Share.” Our estimated net asset value per share may not be indicative of the price our stockholders would receive if they sold our shares in an arms-length transaction, if our shares were actively traded or if we were liquidated.
  • When shares of common stock are offered to the public on a “best efforts” basis, the broker-dealers participating in the offering are only required to use their best efforts to sell the shares of our common stock. Broker-dealers do not have a firm commitment or obligation to purchase any of the shares of our common stock.
  • This offering will not last beyond 2011 (two years from the date of this prospectus), unless extended. However, in certain states this offering may only continue for one year unless we renew the offering period for up to one additional year.
  • No. You will not receive a stock certificate unless expressly authorized by our board of directors. We anticipate that all shares of our common stock will be issued in book-entry form only. The use of book-entry registration protects against loss, theft or destruction of stock certificates and reduces the offering costs.
  • In general, you may buy shares of our common stock pursuant to this prospectus provided that you have either (1) a net worth of at least $70,000 and an annual gross income of at least $70,000 or (2) a net worth of at least $250,000. For this purpose, net worth does not include your home, home furnishings and personal automobiles. Please see the more detailed description under “Suitability Standards” above.
  • Yes. Our charter prohibits the ownership of more than 9.8% in value of our outstanding capital stock (which includes common stock and preferred stock we may issue) and more than 9.8% in value or number of shares, whichever is more restrictive, of our outstanding common stock, unless exempted by our board of directors. This prohibition may discourage large investors from purchasing our shares and may limit your ability to transfer your shares. To comply with tax rules applicable to REITs, we will require our record holders to provide us with detailed information regarding the beneficial ownership of our shares on an annual basis. These restrictions are designed to enable us to comply with the ownership restrictions imposed on REITs by the Internal Revenue Code. See “Description of Capital Stock — Restriction on Ownership of Shares of Capital Stock.”
  • Yes. To purchase shares of common stock in this offering, you must make an initial purchase of at least $4,000 in shares. Once you have satisfied the minimum initial purchase requirement, any additional purchases of our shares of common stock in this offering must be in amounts of at least $100, except for additional purchases pursuant to our distribution reinvestment plan which are not subject to any minimum investment requirement.
  • At the time you purchase the shares of our common stock, the shares will not be listed for trading on any national securities exchange, and we do not expect that a public market for our shares will develop. As a result, if you wish to sell your shares, you may not be able to do so promptly, or at all, or you may only be able to sell them at a substantial discount from the price you paid. In general, however, you may sell your shares to any buyer that meets the applicable suitability standards unless such sale would cause the buyer to own more than 9.8% of the value of our then outstanding capital stock (which includes common stock and any preferred stock we may issue) or more than 9.8% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock. See “Suitability Standards” and “Description of Capital Stock — Restriction on Ownership of Shares of Capital Stock.” In addition, we have adopted a share repurchase plan, as discussed under “Description of Capital Stock — Share Repurchase Plan,” which may provide limited liquidity for some of our stockholders.
  • We intend to accrue and pay distributions on a regular basis beginning no later than the first calendar month after the month in which we make our first real estate investment. Once we commence paying distributions, we expect to continue paying monthly distributions unless our results of operations, our general financial condition, general economic condition or other factors prohibit us from doing so. The timing and amount of distributions will be determined by our board of directors in its discretion and may vary from time to time. For more information regarding our distribution policy, please see “Description of Capital Stock — Distributions.”
  • Yes. Please see “Description of Capital Stock — Distribution Reinvestment Plan” for more information regarding our distribution reinvestment plan.
  • Our charter requires that we prepare an annual report and deliver it to our stockholders 120 days after the end of each fiscal year. Additionally, we must update this prospectus upon the occurrence of certain events, such as material asset acquisitions, pursuant to the requirements of the Securities Act of 1933, as amended, or the Securities Act. We are also subject to the informational reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and, accordingly, we will file annual reports, quarterly reports, proxy statements and other information with the SEC. We will directly provide to our stockholders our periodic updates, including prospectus supplements and annual and quarterly reports.
    In addition to providing information mandated by our charter and the federal securities laws, we intend to post on our website at www.steadfastcompanies.com, and file with the SEC, unaudited statements of operations each month for the prior month with respect to each real property in our portfolio. We believe that posting this additional financial information with respect to our monthly operations at the property level will benefit stockholders by consistently providing current information and greater transparency with respect to the performance of our investments.
  • Distributions that you receive, including the market value of our common stock received pursuant to our distribution reinvestment plan, will generally be taxed as ordinary income to the extent they are paid out of our current or accumulated earnings and profits. However, if we recognize a long-term capital gain upon the sale of one of our assets, a portion of our dividends may be designated and treated as a long-term capital gain. In addition, we expect that some portion of your distributions may not be subject to tax in the year received due to the fact that depreciation expenses reduce earnings and profits but do not reduce cash available for distribution. Amounts distributed to you in excess of our earnings and profits will reduce the tax basis of your shares of common stock and will not be taxable to the extent thereof, and distributions in excess of tax basis will be taxable as an amount realized from the sale of your shares of common stock. This, in effect, would defer a portion of your tax until your investment is sold or we are liquidated, at which time you may be taxed at capital gains rates. However, because each investor’s tax considerations are different, we suggest that you consult with your tax advisor.
  • We intend to mail your Form 1099 tax information, if required, by January 31 of each year.
  • Yes, we will provide you with periodic updates on the performance of your investment in us, including:
    • an annual report;
    • supplements to the prospectus, provided quarterly during the primary offering; and
    • three quarterly financial reports.
    We will provide this information to you via one or more of the following methods, in our discretion and with your consent, if necessary:
    • U.S. mail or other courier;
    • facsimile;
    • electronic delivery; or
    • posting on our web site at www.steadfastcompanies.com.
  • If you have additional questions about this offering or if you would like additional copies of this prospectus, you should contact your registered selling representative or:

    Steadfast Capital Markets Group, LLC
    4343 Von Karman Avenue
    Suite 300
    Newport Beach, California 92660
    (949) 852-0700
    Attention: Investor Relations