01 · anywhere in the stack
No preferred return
Including for the sponsor. There is no waterfall in which somebody is paid before you.
01 Clear Capital
Outside money sits here, and it does not sit on the members’ side.
Clear Capital Holdings is the company through which investors and property contributors participate in the cooperative’s assets.
The co-op board
Elected by members. Member-only.
What protects a member is written here, and it is not up for negotiation with anyone outside the membership.
The Holdings board
Its own company. Its own board.
Investors can hold a seat on it. Neither board can quietly become the other, which is the point of there being two.
Nothing on this page is an offer. No terms, no rate, no subscription. This page describes how the structure is built; anything further happens in a private conversation and under the applicable exemption.
02 The split
The land is the reason this works for both sides.
Member equity accrues in the structure. Appreciation accrues to the land the co-op holds, which is what backs construction borrowing as the portfolio grows.
Members hold
The structure.
Bought down through an Equity-Lease Participation Agreement, ending in a Clear Deed.
The co-op holds
The land.
Permanently. Selling it is a reserved matter that cannot pass without the co-op.
Contributors hold
Shares.
Yield-bearing shares in Clear Properties, pro rata, on the same terms as everyone else in the pool.
Land backstops construction borrowing and never credit losses. A member’s savings never fund another member’s credit. Two balance sheets, and they do not touch.
03 Contributions
A contribution is not a sale, and it is not a fund raise.
Property comes in under section 721 in exchange for yield-bearing shares issued by value. Nothing is trued up with cash, so there is no boot and no balancing mechanism.
- Issued by
- value
- Clear Capital’s own position
- same pool, no priority
- Distributions
- pro rata
- Tax distributions
- mandatory
Contribute at appraised value, receive shares one-for-one against it.
It holds shares on exactly the same terms as every contributor. No preferred return, no priority, and its position shrinks as more contributors join.
Rent is earned at the project level, which pays taxes, insurance, maintenance and management. The fund sets reserves, pays a management fee, and distributes what is left.
Required by the agreement, so a holder is never handed a K-1 for income they did not receive in cash.
One duplex or a portfolio.
The mechanics are identical whether it is one duplex or a portfolio. What changes at scale is the diligence, not the structure.
A single property works the same way.
04 Protections
The protections are structural, not promises.
A promise is a policy, and a board reverses a policy in an afternoon. These are written where a future board cannot.
02 · five of them
Reserved matters
Selling land, diluting members, amending the purpose, replacing the manager, related-party deals above a threshold.
03 · fixed by kind
Board composition
Investors can hold a Holdings seat. The co-op board is elected by members and stays member-only.
04 · open source
The ledger is public
Balances, credit lines and title records run on contracts held by an ownerless foundation.
05 The downsides
The honest downsides.
Five of them, and none is softened because the contribution is larger.
- Shares are illiquid compared with cash
- You do not control the properties
- You get a K-1, which arrives later than a 1099 and your accountant will charge you for it
- The deferred gain still exists and comes due if you ever sell the shares
- Concentration risk moves from your one building to a fund, which is usually better but is a change, not a removal
And one that runs the other way.
Early cohorts are geographically concentrated in one corridor by design, because that is what makes the merchant and housing sides compound. Geographic diversity comes later, and anyone underwriting this should price that.
06 Next
We do not publish terms, rates or projected returns.
You should be sceptical of a housing cooperative that does. What we will do is walk through the structure with you and your advisers, send the documents, and answer whatever your CPA and counsel ask.
We are not your tax or legal advisers, and nothing here is advice about your situation.