IHT Realty: One Man’s Plan to Grow Affordable Housing by Crowdfunding

IHT Realty Crowdfunding has rebranded itself as RealtyeVest.

JACKSONVILLE, Fla., March 21, 2017 — Park Place Communities (PPC) is taking a major step toward growing the stock of affordable homes in the United States.

PPC, a national real estate investment company that specializes in affordable housing, is seeking $1 million in capital to facilitate a large-scale affordable home project.

The company plans to take existing mobile homes, renovate them and sell them to qualified buyers using five-year amortized mortgages. The buyer will make monthly payments for five years at 12 percent.

“This allows buyers to purchase the mobile home for about the same monthly cost of renting,” said CEO Andrew Lanoie of Park Place Communities.

IHT Realty Crowdfunding, a real estate company that helps sponsors raise capital for their acquisitions, will be assisting PPC in securing funds as it looks to expand its operations and acquire an additional 15,000 to 20,000 mobile homes over the next few years.

“There is a huge demand for affordable housing right now and there are not enough parks to fill that void,” Lanoie said. Right now, there are roughly 50,000 affordable housing parks in the United States.

And with housing costs projected to rise by 5.4 percent from July 2016 to July 2017 — according to a study by CoreLogic Home Price Index — mobile homes are becoming a practical alternative.

“As the wage gap in the United States widens, there has been a shift towards lower paying jobs, which leads to an increase in demand for affordable housing,” Lanoie said.

According to the most recent report by the Social Security Administration, 36 percent of U.S. wage earners make less than $20,000 per year and 50 percent earn less than $30,000 per year.

“With 10,000 Baby Boomers retiring every day, 47 percent of which don’t have any retirement savings,  affordable houses are their last opportunity of home ownership,” said CEO Dan Summers of IHT Realty Crowdfunding.

PPC, a national Top 100 owner-operator of mobile home parks, currently owns 13 affordable housing parks in eight states with nearly 1,000 total homepads.

The company is looking for a $1 million mortgage pool to issue fixed-rate mortgages to buyers. It is offering a debt investment opportunity secured by a first lien, which is also backed by a corporate guarantee with a 10 percent interest rate paid to investors.

The first step will be to renovate more than 125 units, Lanoie said.

Contrary to popular belief, mobile homes are not really mobile. It costs over $3,000 for a resident to move their home out of a park, Lanoie said, which is the reason 98 percent of mobile homes will remain in the same location.

“Mobile home parks are one of the most stable and predictable investments during a recession and recovery,” Lanoie said.

RealtyeVest is a real estate crowdfunding company that offers investors the opportunity to capitalize on residential, multifamily and on-trend properties across the United States.

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How to Use a Self Directed IRA to Invest in Real Estate

What is Crowdfunding?

Crowdfunding is a marketplace with a transactional platform.

For instance, imagine sitting at a table in a Golden Corral restaurant and the buffet is filled with platters of colorful food of virtually every type. Well, crowdfunding is much like a buffet for investors. Instead of ordering off the menu, the buyer or “investor” goes to where the “food” is and selects what he wants.

Unlike the traditional way of investing – when the sponsor (real estate developer or entrepreneur) sought out the investor for funding – investors can now log into a network and view a vast selection of real estate sponsors seeking funding. This allows investors to select from deals that catch their interests and fit in with their investment portfolios.

The Benefits of Investing in Real Estate Crowdfunding 

Investing in crowdfunding for real estate is a safer and smarter approach for those looking to diversify their portfolios and grow wealth. This is because the real estate market has less volatility than the stock market and offers higher rates of return than government bonds and savings accounts. Combine that with the tax advantages, and it becomes an essential part of any smart investment strategy.

Since the JOBS Act of 2012, real estate sponsors have been able to successfully crowdfund their projects by raising capital in small amounts through a broad number of individuals that provide access to a wider pool of potential investors. Likewise – with the buffet example – investors have the opportunity to mitigate the risk and invest in several deals in lieu of a single opportunity.

Due to advancements in technology, self-directed IRA investors are able to participate in real estate crowdfunding with their retirement accounts and at the same time realize significant tax advantages.

Those who want to be more in control of their financial future and enjoy more flexibility in the investment types, use self-directed IRAs.” – Dan Summers, CEO at RealtyeVest

Investing with a Self Directed IRA

Investing with a self-directed IRA is not overly complicated.

To make an investment using an IRA, you’ll need a self-directed IRA custodian who can hold the new property as an asset in your account. Once you’ve found a custodian, you open a new account and transfer your retirement funds into it. There are no tax penalties involved in the transferring of funds to the account.

A self-directed IRA can be structured as either Roth IRA or traditional IRA and allows the owner to invest in alternative assets such as real estate crowdfunding. As an investor, you can have a much more diversified portfolio than those invested exclusively in publicly traded securities.

Self-directed IRAs are also protected under federal bankruptcy laws, plus, real estate investments are insurable, which means they cannot disappear into thin air like some traditional Wall Street investments.

The real-estate crowdfunding platform is predicted to reach $150 billion over the next five years.

How to Invest

Although a self-directed IRA involves more of a hands-on approach, if you do your due-diligence and partner with a reputable crowdfunding company, the rewards can significantly outweigh the risks.

Investing with a self-directed IRA with RealtyeVest is as easy as four steps.

  1. Register to view investment offerings.
  2. Choose investments that suit your preferences.
  3. Invest with as little as $5,000 per deal.
  4. Receive scheduled payments.

 

 

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