Why Real Estate Investors Love Commercial Real Estate

There are many different investment options that a person can make, and choosing the right one can be a matter of extreme wealth vs. living in the poorhouse. Some people make wise decisions with their finances, while the majority of people make foolish decisions. In this article I will explain the reasons that I love real estate and know that it is a great investment to make. It will keep your money ahead of the game and make huge profits. The time is now to take advantage of this amazing investment opportunity. Don’t miss out!

Lately I’ve been giving a lot of serious thought to the best investments to make with the extra cash I have lying around, and I’ve really come to love real estate but not the stock market. There is so much cheap commercial real estate to be gobbled up in today’s market that it is truly a no brainer between real estate or stocks. Real estate and stock markets have been competing for a long time, but the commercial real estate return on investment is so high right now that you just can’t miss this opportunity. The playing field is ripe for smart investors who love real estate as much as I do. Are you one of those people, who can think outside of the box and is a smart investor wanting to take advantage of the best investments out there at a time when everyone else is convinced that the same old boring thing is the way to go? Well then, keep reading and I will explain how to make money with this wonderful investment opportunity.

One of the reasons that cheap commercial real estate wins over stocks every time is because the stock market is so highly overvalued. When choosing between real estate or stocks, many people are blindly dumping their savings into the stock market when they really should love real estate as a safer option. Most people just don’t pay much attention to the commercial real estate return on investment, which is much higher than the stock market’s return on investment. The stock market still has a long way to fall. Just because it is looking good right now does not mean that we should turn our noses up at cheap commercial real estate.

Many companies purchased real estate at the wrong time because they did not understand how to make the biggest commercial real estate return on investment. These companies are now trying to stay afloat by selling the cheap commercial real estate that they purchased at the height of the market. Here is an example of how one company’s poor decision was the gain of another company looking to make a high commercial real estate return on investment:

This company was poorly run and did not understand even the basic fundamentals of investing, especially not in real estate or stocks. The leadership of this company decided that instead of purchasing the cheap commerical real estate in the downtown area of their city that they would instead build a brand new, LEED certified building with all the bells and whistles. It was top of the line and the envy of many who love real estate. However, this company should have looked for cheap commerical real estate instead of building a brand new building. Let me explain why. You see, after a couple of years in this building, work slowed down. The company hadn’t invested in cheap commerical real estate and instead had a hefty payment to make each month. Because work had slowed down, they couldn’t afford the high mortgage on their building. They began to lay off employees and cut spending in as many areas as possible, but because they had failed to purchase cheap commerical real estate and were instead committed to a high mortgage payment, they were unable to cut spending in that area. Now the company has closed its doors and liquidated everything, including the beautiful LEED certified building. Now someone who truly loves real estate and was trying to choose between investing in real estate or stocks has capitalized on the opportunity to own cheap commerical real estate. This person who truly values and loves real estate will now make a huge commerical real estate return on investment, all because they understood how to find a great deal on cheap commerical real estate.

Some investors may be trying to decide between real estate or stocks. While stocks may look lovely right now, they can’t keep going up forever. There must eventually be a correction in the market, which is why, when choosing between real estate or stocks, a person should definitely choose real estate, because who doesn’t love real estate? The real estate and stock market dilemma has been going on for awhile, and now it is time to put an end to the difficult decision between the real estate and stock market. When one looks at real estate and the stock market, one needs to look no further than the 1987 stock market crash. That’s one of the reasons why I love real estate! The commercial real estate return on investment has been extremely consistent, while the stock market has crashed time and time again.

We have looked at investing in real estate or the stock market, and the commercial real estate return on investment is much higher than the stock market or any other investments that one may find. What is not to love about real estate? When choosing between real estate or stocks, please, choose the option that will protect your assets and move you forward in the coming years. The real estate and stock market are both options for any investor, but why would someone choose the one that will not bring in the highest possible profit. The commercial real estate return on investment is so high that you just can’t sit back and allow other investors who better understand the advantages of real estate to the stock market to gobble up all the good properties out there. The commercial real estate return on investment is so high, a person would be missing huge gains for not getting into this market.

There are always naysayers out there who will say that real estate but not the stock market is a horrible investment. They say that the commercial real estate return on investment is lousy. Don’t listen to them! They just haven’t done their research and don’t truly understand the value of investing in real assets such as real estate and not the stock market. These people may be doing well for awhile as they watch their stocks go up. But eventually, “POP!” The bubble will burst and the commercial real estate market will be left standing while stocks will fizzle. So if you choose to invest in real estate or stocks, just remember that the commercial real estate return on investment is a great place to put your money and shield it from the coming storm of the stock market.

So in conclusion, which should one choose? Real estate or stocks? The answer is obvious! Between real estate or stocks, real estate wins ten times out of ten! And that, my friends, is why I love real estate!

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Source: realtyevest

Why Real Estate Investors Love Commercial Real Estate

Securing Real Estate Debt Through Peer to Peer Lending

Peer to peer lending is a wonderful way to make a monetary investment and build you financial standing, without having to go through a bank. With peer to peer investing, you know what your money is going toward instead of handing it to a bank teller to watch it disappear. When you lend peer to peer you are loaning to a person.

Peer to peer lending is a method of lending where your money goes straight to the borrower instead of to a large group. You may be asking, “What is peer to peer lending real estate?” It is a method of investing that can help both you and your borrower. You loan them money and they set their property as collateral, giving you the security you need not to worry about your investment as they use it to build their dreams. Peer to peer lending can be a borrowing method for an individual to receive a loan, by borrowing and receiving through a peer to peer lending real estate plan. The borrower agrees to return the loan with interest and if they can not, the lender receives the borrower’s property.

Peer to peer lending is one way to help an individual achieve success instead of helping a bank or large corporation hang someone by debt. It is no fun to have a large corporation following you waiting for you to fail, so peer to peer lending can be great for the borrower. They are using money that came from a fellow human being rather than a overwhelming group that they feel doesn’t care. At the same time, the lender knows where his money went, he knows what is happening with it, and how it is being applied to make everyone’s dreams come true. This is an opportunity you don’t get through other types of investments. You will be closer to the holder of your loan, giving them less pressure so that they can concentrate on getting you your money back to you. You will receive an above average interest rate using PTP (peer to peer) Lending over other types of financial investments. Because large amounts of the interest your money is making with traditional lending methods is going in to the bank where it stays instead of your pocket, the one who fought and sweated for it. Using this method of investing you chose who can use your money and you don’t have to give it to anyone that seems untrustworthy.

Peer to peer lending is not as frightening a prospect as the world thinks since securing peer to peer lending is possible by securing your loan with property. Your borrower will give you the right to foreclose on his property if he can not pay you back. This type of lending can be profitable to everyone involved. Someone can buy a new house for their family using the real estate as collateral and if they cannot pay the money back they lose nothing but the house they already borrowed the money for, and the loaner will still have the money and the interest he made through the peer to peer investment. You won’t be loaning to a dark hole; You can now loan safely to people.

Peer to peer lending is not always the best method of investing. If you have no collateral, you have no insurance that you will receive your money back, but with a secured loan you have the protection you need to make sure your money won’t vanish.

Real estate secured loans are one way to make sure everyone comes out on top. Debt investments can be intimidating and frightening but this is one way to back your own success. You are guaranteed that no one can take your money and run because you have the protection you need to keep yourself safe.

There are many types of financial investments, but peer to peer lending is definitely one of the debt to consider using. This is one plan that can leave your money secure unlike most debt investments. Peer to peer lending will give both the investor and the borrower a feeling of freedom since neither has to fight with a middle man like with most types of debt investments.

What are the benefits of peer to peer lending over other types of debt investments? The answers are simple: more profit for the lender and less interest for the borrower. The lender is not the only person getting ahead by this method; the borrower is able to shave part of the bank’s overhead from their financial burden. And since protecting the lender is possible through a real estate secured loan, everyone wins. Loaning real estate to back your finances is a responsible way to make a debt investment, because there is little worry of not receiving your debt investment back. You are trading real estate with another person for the cash they need to attain their goals; as soon as you get your money back, they will be given all rights to their property back.

Peer to peer lending makes real estate secured lending much easier because everyone is given more freedom. You are for once in your life your own banker, you decide what investments seem good to you and then you reap the benefits of your investments.

And as we already stated, with real estate secured loans the investor does not have to worry about whether he will get his money back or not. Peer to peer lending is easy and for once you don’t have another person in charge of your finances. No more putting your money in a bank and not knowing what good it is doing; it will be with someone who is using it to do big things while it is still growing interest for the lender –

Peer to peer lending is different than most types of real estate secured loans but the benefits stay the same for everyone involved. The investor is in charge of their own money until it is given to the borrower. And through real estate secured lending, the lender is still in charge of the protection of their investment.

Using real estate secured loans makes securing peer to peer investments a breeze. Few things hold their value as well as real estate; this is why real estate secured lending is one type of investment you might want to consider. This is your chance to direct your own finances without having to run a major corporation.

Securing peer to peer lending with a real estate secured loan is a method of protecting your money while allowing it to grow. Your money is picking up interest as you go about your day to day life. It is also helping someone else make their dreams become a reality.
Now you know what the benefits of securing peer to peer loans with real estate are in compare with traditional debt investments. Many people believe a real estate secured loan using peer to peer investing is the best way to protect their money, while keeping everything close and secure. If you are considering some way to lending money out or are wondering about securing peer to peer lending, then peer to peer lending real estate might be the type of investing you would appreciate.

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Source: realtyevest

Securing Real Estate Debt Through Peer to Peer Lending

What is the Difference Between an A class, B class, and C class Property

Before we start differentiating, we need to understand what a property class is. Property classes are a three-tiered category system used in the real estate industry and are used to price and valuate as asset based on many features.  An A class Property will be different from a B class property, as well as C class property.

Class A Property

What is property class and how does it relate to class A? Class A property is considered the crème-de-la-crème of real estate. Class A property will attract your celebrities and other A-list entertainers.

An Example of Class A Property

In 1992, Madonna bought a 1928 Mediterranean Revival Mansion, in Dade County. Her Miami mansion was north of the Vizcaya Palace and gardens. It was a 6-bedroom home complete with a large outside pool and sits right on the shores of the Atlantic Ocean.

Madonna sold it back in 2000, but it remains a good example of a class A property. Class A properties are newer on the market, no more than 10-years old.

Class B Property

What is property class and how does it relate to class B property? A class B property is bought by people who come from the middle class. The class B property is a little older than a class A, but they still command a good price. Blue-collar workers are the people who usually invest in a class B property.

The only difference between a class B property and a class A property is a buyer’s net worth. Class B buyers typically earn less than class A buyers, but they are still rolling in the money.

Class C Property

What is property class and how does it relate to class C? Class C property is more for those who live in a lower income area. Class C property attracts people who live off of government subsidies and working low wage jobs.

You will find a lot of pawn shops and check-cashing businesses in the area. The area we live in is considered to be a class C property. We live near the projects and the homes are older.

The homes look about 30 years old or more. They need a lot of maintenance and repairs are ongoing. These properties are perfect who cannot afford much. They typically cost less than class A or B.

What about class D?

Class D typically functions the same way as class C. though the tenants may be a lot tougher and more dangerous.

Investment Benefits of Each Class and How They Compare to One Another

1) You will find very attractive returns in commercial real estate. You will learn this during your first day of real estate class. Rule #1, you always wait until the commercial real estate is chasing yields, and right now they are. Sometimes real estate offers more attractive options than stocks or bonds.

An Example

We are using Madonna as an example again because she is a genius with real estate. She has bought many properties over the years, including her Miami home. Some properties she keeps in the long-term and some she sells after a few years. Her investment portfolio is solid and amazing. One reason why is because she makes great choices in the real estate market.

2) Real estate offers clients a steady cash flow. You can get this cash when the dividends are distributed. You have a choice between monthly, quarterly, and annually.

3) What about the equity? You can choose the property appreciation or the capital gain when the house sells. You can choose between buying and selling right away or holding onto the property for many years. Those who decide to buy and sell right away are doing what many call “the fix and flip.”

4) Some investors like to take advantage of the depreciation. Depreciation may decrease the accounting structure of the property, but it does not decrease the value of the property. You can use a tax benefit called “passive loss” to offset other income. Talk to your tax representative about this tool. It may save you a lot of money, especially when you have made improvements on your home over the years.

5) There is something called a “principal paydown.” It is a monthly savings plan that reduces the leverage, which increases the equity. You can find out more about this tax tool by clicking here.

6) It is a good way to diversify a portfolio that has a lot of hard assets. Real estate is different than buying into a company. You may be buying into something that is here today and gone tomorrow when you buy into a company.

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Source: realtyevest

What is the Difference Between an A class, B class, and C class Property

Investing in Mobile Homes

Today’s real estate market can be tough when making investing into an uncertain market; a bit of a hit or miss situation. Real estate investors will often scoop up single-family homes in an effort to cement their profits while newer real estate investors will seek out a cheaper fixer up units and smaller multifamily units that often leave no middle ground for experienced investors seeking a solid real estate package. Which then forces us to wonder, are manufactured home a good investment?

There has been a misconception about manufactured homes for several years paired with clichés ranging from them being tornado magnets to attaching lower class people. However, it’s important to understand mobile home investing makes great financial sense. Understand that investing in or building a trailer park creates opportunities for a solid monthly financial benefit. Mobile home park investing gives good options for increasing an investor’s financial portfolio, so whether you’re seeking to lease land in a mobile home park or own it outright read on to discover why mobile home investing makes good business sense and answer the question, are manufactured home a good investment?

So, why are mobile homes a good investment?

The first reason is that tenants in mobile parks offer the consistency that provides great security to an investor. There are several reasons for this and the first is that there is always solid demand for lower-cost housing and secondly, the cost and fees involved to move a manufactured home to another location is generally quite high and slightly out of reach for tenants that rely on such housing. This would allow an investment increase of possibly 20 percent that could be absorbed by residents who don’t want or can’t afford to move their home.

Building a trailer park or investing in mobile homes allows an investor to jump in and purchase mobile home units for less money. Often a mobile home investor purchases the land in the park making the investment much less than in comparison to the number of units owned.

Mobile homes offer a large tenant market

So, are manufactured home a good investment? With the high cost of affording housing seemly always on the climb, there is always a demand from different age groups for lower cost housing that mobile homes can offer. Baby boomers are continuing to enter their retirement years at a rate of approximately 10,000 each day and many of the 74 million above 60 that are projected to retire in the next 15 years may have little to no savings which means they will have a need for lower cost housing making investing in mobile homes important. But, it’s not just boomers that need lower cost housing. Many American workers don’t earn above $20, 000 annually meaning that they also need to choose between a lower cost apartment rentals or mobile home units.

Investing in mobile homes means lower costs for maintenance

Because a mobile home is owned by the tenant the cost to maintain it is the responsibly of the owner and cuts out the impact plus cost of working with contractors for repairs that often comes with owning a single-family housing rental. A tenant’s outright ownership means that a manufactured mobile home park owner can focus on the care and upkeep of the park grounds without additional costs of unit repair meaning more cash in pocket for an investor.

Competition in Mobile Park investing is light

Still not convinced mobile home park investing makes great financial sense? Then, you’ll be happy to see that building a trailer park or mobile home park investing means that competition from other owners will be light and with so many looking for affordable housing, a mobile home investor is well placed to capitalize on the market due to the unavailable of new mobile home park builds making investing in mobile homes the right move.

The reason why less new mobile home parks aren’t being built is due to some regional difficulty in overcoming legal hurdles for permits and zoning that some states impose leaving several regions wide open for a savvy mobile home investor to come in. Mobile home investing makes sense because of this and with less new parks being built demand will continue to be high while supply will remain level ensuring that investing in mobile homes will not cause the investment worries that would come from newer mobile home park builds.

Build a Portfolio

When seeking to answer the question are manufactured home a good investment, be sure to create a portfolio of properties for maximum financial impact from your investing in mobile homes. But, also understand that when starting out that the more units owned means less financial impact if a portfolio is hit with unexpected costs.

Now that you understand some of the reasons that mobile home park investing make great business sense, consider that a good understanding of mobile home investing market will give you a leg up on the competition. If as an investor you are planning on building a trailer park, be sure to understand the following to get you started getting your mobile home park up and running smoothly:

Have a target home style – purchase a clean mobile home that doesn’t need a lot of repairs and study which mobile home bedroom units sell the best and then plan accordingly to get the best benefits for your budget.

Understand where potential tenants and mobile home owner come from – Most mobile home tenants discover mobile home units through advertisements and can’t afford to pay out in cash for a unit. So, be sure to understand that a great bet for continual cash through your mobile home investing is sure to come from payment buyers paying a fixed amount each month.

Work with sellers to get a great home for the price – A savvy mobile home investor understands that building a trailer park homes means working with a seller or potential tenant to gain the best out each and every transaction. So, keep this in mean during a hunt for great mobile home park investing opportunities.

With so much to offer a savvy investor investing in mobile homes ensures an honest return on an investment that will continue to pay off for years to come. So there is no need to question are manufactured home a good investment because the answer is if the opportunity to invest in mobile homes comes, take it and see an investment take flight.

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Source: realtyevest

Investing in Mobile Homes

Investing in a Hot Real Estate Market-Timeliness is Key


By Tony Gilbert of The Real FX Group

When the real estate market is hot, good deals are snapped up quickly by those who have the financial means and the experience to recognize a good investment and act on their instincts. It’s a learned skill. Real estate advisers and novice investors alike must develop a kind of symbiotic relationship that fosters needed trust when fast action is needed.


Investment firms benefit from having a pool of qualified investors who are willing to respond based on trust and prudent information, just as investors appreciate the expertise and advice they receive from advisers who watch constantly for possibilities and identify those worth pursuing. Sometimes, however, the time it takes becomes the deal-killer.

The Right Software is a Must

With “robust” CRM software, investment firms, real estate agents and investment managers gain the kind of tools that can provide a two-way street for identification and analysis of worthy properties. This relationship-based methodology also improves customer relations and enhances professional give and take. Clients who are well-informed and who have mastered basic principles of investing feel secure in their decisions and with the financial outcomes. The dividends that accrue to both sides cannot be overestimated.


Gain the Ability to Collate Facts and Compress the Schedule

Desirability depends on a variety of factors; price is only one of them, even though it’s vitally important.

No successful investor will bid on or base a real estate investment solely on an attractive asking price. It’s equally important to analyze the full spectrum of factors that create value. They include, but are not necessarily limited to:

  • Location
  • Condition
  • Current use
  • Future potential
  • Rehabilitation or renovation costs
  • Tax assessments, and
  • Appraisal value

Any potential investment must also be evaluated in terms of its anticipated “hold time” before reselling, or the expected income stream for lease properties. Such analysis requires variable data input and projections. And all the data requires validation.

The information-gathering process alone is time-consuming. Add sufficient time for analysis and it’s not difficult to understand how a great deal can be lost because of lack of time.

Make a Difference with the Right Tools

CRM software that facilitates communication between adviser and investors offers a distinct advantage. If it also includes comprehensive reporting capability that will quickly identify likely investors, outline capital needs and ROI succinctly, and fully track the timeline- it is an extremely valuable asset.

Successful real estate acquisitions don’t happen by chance. They are the result of being in the right place, having the right knowledge and taking the right action at the right time. That same formula applies to the acquisition of information-sharing tools, particularly the kind of software that builds relationships as well as building business.


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Source: realtyevest

Investing in a Hot Real Estate Market-Timeliness is Key

Short-Term Celebrity Rentals

In real estate, it is all about, “Location, Location, Location!”  And when that beautiful location, La Quinta, CA, is near a music mecca such as Coachella, the “Gem of the Desert” becomes a destination and temporary home for festival frolickers.  

Located in the Coachella Valley in Southern California, La Quinta is less than 6 miles from Coachella, California, home to one of the premier music festivals in the world.

For two weeks each April, Coachella becomes the music mecca of the world- an event that young and old alike flock to. Whether music lovers or not, people come to Coachella to have an experience, which for many, is a once in a lifetime chance to feel like a celebrity, or if funds allow, dare I say, royalty?

Coachella is one of the few events where celebrities hob knob with average, everyday people and share in their love of music, art and unique experiences.  It’s an experience people are willing to pay top dollar for. A premier music event requires premier accommodations, and that is where short term rental property comes into play.

Imagine investing in a short-term rental property, one perfect for the burgeoning Airbnb and home sharing business. In 2017, Beyoncé paid $50,000 for a week stay at a private estate during the event.  Coachella is indeed an event that can potentially pay off one year’s worth of mortgage payments with a mere week or two of rentals.

In addition to being home to this unique music festival (as well as the newer ones at the same site such as “Stagecoach” and “Desert Trip”), one should not forget that La Quinta is also home to the world famous ”PGA West”, as well as twenty other premier golf courses. La Quinta also boasts one of the top golf destinations in the form of it’s “La Quinta Resort and Club” and The PGA Tour Qualifying Schools also calls La Quinta home.      

La Quinta, California has been growing at a staggering rate, and continued growth is forecast far into the future.  Don’t just invest in a property; invest in a DESTINATION.


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Source: realtyevest

Short-Term Celebrity Rentals

Using a Self-Directed IRA in Real Estate Crowdfunding

Over the past 4 decades investors and non-investors have chosen to invest in their retirement by investing in real estate. Investing in real estate in the past, often times was done using stocks, bonds, mutual funds, or CD’s within an individual retirement accounts. Investing with a self-directed IRAs offer non-traditional investments and have become more popular in recent years. Self-directed IRAs in real estate investing is more accessible for real estate investors than it once was. A self-directed Ira allows the account holder to invest in precious metals, tax lien certificates, real-estate and many more options.

Think for a moment of the term self-directed IRA. What does the term truly mean? A self-directed IRA refers to alternative investment options that are offered or accepted by the IRA’s custodian. A custodian is an institution or a financial institution in charge of keeping record & reporting your transactions to the IRS. Self-directed IRAs with real estate investing must accurately report the value yearly to the custodian. The custodian is responsible for making sure all transactions are legal, ethical, and allowable by the IRS rules and regulations for self-directed real estate IRA investing.

Roth and traditional IRAs are both considered to be self-directed IRAs. They allow for the custodians to permit of wide range of investment opportunities within an individual retirement account. One of these options is real estate investing. This option makes owning rental properties an appealing retirement alternative for investors.

Though self-directed IRAs can be a great option, it’s extremely easy for an investor to make a wrong investment that can cause the account to be dis-allowable by IRS regulations and tax code standards. There are some key points that you should keep in mind when using a self-directed Ira to invest in real estate. Remember that just because something is allowable doesn’t mean that it’s the best option for your retirement funds.


Benefits and Risks

When looking to use self-directed IRAs as options to invest in real estate, you must take certain steps before being able to do so. For example, the non-traditional methods would have been using stocks bonds, mutual funds, CDs or 401ks. The 1st step an individual would have to make is converting 1 of these options into a self-directed IRA. There are many reputable companies that can aid in starting up a self-directed IRA account.

Some IRA custodians are more complex in structure than and so it is important to thoroughly do your research. Remember to always examine any and all potential expenses and fees and examine the overall impact it may possibly have on your self-directed IRA account for investments. Look for the custodian’s overall structure. Always consider the possibility of losing money with a custodian when starting an Self-directed IRA account. In most cases the custodian will advise an (LLC) limited liability company or other entities such as a trust before the purchase of any property.

Perhaps the biggest benefit of a self-directed IRA is the tax-deferred income you’ll receive until the day you take your very 1st withdrawal. When investments are placed in Roth IRAs specifically, investment profit gains and withdrawals are tax-free.

The one thing worth considering about Self-directed IRAs is that at the age of 59 and ½ the account holder must begin withdrawals from the accounts. This means that any funds withdrawn before the age of 59 and ½ are taxed as ordinary income on income tax returns. The majority of active investors usually buy, sell and flip properties in SDIRAs. These investors move funds from project to project and maintain the tax-deferral status for the IRA.

Familiarity is another major benefit of SDIRA in real estate because these types of IRAs give Investors the ability to make investments they know and understand. Often market uncertainty leads investors to invest in areas that are familiar to them and investors who do so do it because it’s a way to protect their interest in the investment. This type of familiarity is one of the biggest upsides to SDIRA real estate accounts.


It’s important to realize that an investor can apply these benefits to crowdfunding real estate. Crowdfunding is a method of raising money for a businesses and ventures for investors (the major idea behind crowdfunding is raising money for venture investments). Many investors were willing to invest small amounts of money on bigger projects for bigger return than normal. This concept opened the doors for many investors to reach levels in their investing careers that they may have otherwise never reached. In the past, funds were usually raised amongst private equity in the development company through REIT. However, in 2012, Jump Start Your Business modified regulations and opened the doors for a more direct approach for soliciting accredited investors.

SDIRA’s with real estate crowdfunding are rapidly growing because of the entrepreneurship potential. Through crowdfunding, investors are able to get access to the real estate market with small amounts of money. These investors are also able to choose which real projects that they invest their money in and have the opportunity to work directly with developers.


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Source: realtyevest

Using a Self-Directed IRA in Real Estate Crowdfunding

Investing in Multi-Family Housing

A great way to ensure cash flow is by entering the housing market by becoming multifamily investors. The real estate market can be a safeguard for your investments now and in the future. Multifamily properties comes in many shapes and sizes and the undertaking of multifamily investing often produces lower risk than other real estate investments. Despite all of its positive attributes, negatives can also be seen within multifamily investing and the information provided within this article will help the real estate investor to decide if investing in the multifamily housing industry is the right decision for them.

What’s Available
Once an investor decides that multifamily housing is for them, there are several types of multifamily housing units available.

  • High-Rise: A building with at least nine floors and at least one elevator that contains many tenants.
  • Mid-rise: Has less than nine floors and only one elevator.
  • Duplex: One story structures that encompass two separate housing units that are usually side by side, however they can have one housing unit on top of the other.
  • Townhouses: Two to four-story residences typically attached side by side.
  • Garden style: Units aptly named due to the garden like setting that surrounds the dwelling. Garden style units can have between one and three stories with or without an elevator.
  • Walk up multi-family unit: Made of four to six stories domicile and no elevator (from which it derives its name).

Another option is the manufactured housing community, where residents lease the land from the land owner and live in single family manufactured homes. This option allows residents to feel more secluded in their own home however generates a stead cashflow for the land owner. Another example of multi-family housing units is special purpose housing such as student housing, senior housing and affordable housing. Student housing like it sounds is for students attending college and universities. Senior housing is for the aging population and features areas such as retirement homes. The affordable housing sector is affordable housing for lower income families.

There are many advantages to becoming a multifamily investor. An advantage to this type of investment is that it feels more like a business since the investor can be less emotionally attached to the building. The immediate portfolio can be attained through this type of investing showing more than one tenant compared to a single-family home. One such benefit is the economy of scales which includes time, management, maintenance, cashflow and tax breaks. A lower risk profile is also a benefit since there is one property compared to many single-family homes. There is also only one loan to obtain instead of the multiple loans which would be required for multiple properties. Financing is typically easier for the multi-family investment being that there is only one building holding many tenants. Also keep in mind that only one insurance policy is required on the building. In general, this type of investment also has less competition when purchasing the multi-family housing units.

As a multi-family investor, you are in control of appreciation and value. The investment will show a long-term value and permit you to collect cashflow for a lengthy time. Student housing is a great example of this, as it not only has a higher cash flow, but there is a built-in demand for housing and students tend to leave the property in good condition. There is a huge market for affordable housing as there tends to be a large pool of possible tenants.


Despite the positives of multi-family housing, many investors lean towards the single-family homes. One difficulty faced in multifamily investing is the tenant quality and tenure (tenants do not stay as long since they sign a year to year contract).

Also, units have more potential for disagreements between tenants (since they live in close proximity) and investors must spend time addressing these problems. The overall management time is also increased due to multiple tenants.

The bigger the building, the bigger the cost. Being that they are large buildings, multifamily investments cost more upon entry. Another disadvantage is that regulations are stricter. The upkeep and maintenance on the building is also more complicated than a single-family home. Another shortcoming with this type of housing is that there are fewer buyers at the end when it comes time to sell the building.

Limited locations are another problem that multifamily investors may encounter since there are more single-family homes than multi-family units.

An additional disadvantage concerns those in student housing. Although it tends to have the higher cash flow which we mentioned earlier, it also comes with a shorter rental time due to the student tenants. Senior housing also poses problems with monthly fees for upkeep and maintenance as well as having limited investment properties. Another drawback seen within affordable housing is that most are located in remote areas in shoddier areas.

Invest in the future with multifamily housing in the real estate market. There are many positives to investing in multifamily housing units. Advantages include but are not limited to lower risk, only one loan and easier financing for one loan. Negatives of this type of investment are more tenant disagreements, higher initial cost, and that they require more management time. Investing in multi-family housing has a variety of constructions and structures to choose from. After weighing the pros and cons of multifamily housing, many investors may find that it’s just what they’ve been looking for.

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Source: realtyevest

Investing in Multi-Family Housing

Investing in Self-Storage Units

Are you looking for a way to invest your money? Maybe create an asset that doesn’t require much time? If so, then you should take a look at self-storage investing. What does a self-storage investor do you ask? First, let’s look at what self-storage units are. These are rooms, lockers, or containers rented to tenants. They are usually rented month to month, and can be rented by both individuals and companies.

Self-storage investors make money by buying these units and then either renting them out to individuals, or renting them to another company (who will then rent each unit individually). As with all investments, investing in storage units comes with its own pros and cons. It’s very important for anyone looking to get involved with self-storage investing to understand both before getting involved.

Pros and Cons of Self Storage

The first major pro for investing in storage units is that you have the potential to earn very high rates of returns. These higher than average rates of returns are one of the main reasons for investors to choose this type of investment.

The second pro for self-storage investing is you can purchase buildings at a higher cap rate (capitalization rate) than other properties (such as apartment buildings). Cap rate shows the potential rate of return of the initial investment and is calculated by dividing the net operating income by the current market value. For example, if a unit has a net operating income of $100,000 and recently sold for $1,000,000.

Another pro to self-storage investors is that they don’t have to worry about tenants. One of the most difficult aspects of investing in real estate is that you need to manage the people you rent to. You have to make sure they pay on time and that they don’t damage the property that you own. All of this takes time, and can cost a ton of money, which eats into your profit. However, learning how to invest in storage units eliminates these issues.

Self-storage investing is also one of the best ways to earn passive income. That’s right; the word all investors love to hear. Passive income is the ability to earn income without having to do anything. For the most part, self-storage investing doesn’t require you to be successful. Tenants will move their items in and out without your involvement. All you have to do is maintain the property and pay the expenses.

The final pro to investing in storage units is that you tend to have lower operating expenses. Think about it; people aren’t living in your unit, so it cuts down on what you have to pay for utilities (such as water, electricity, hvac). Of course, you want your storage units to look as good as possible, but you don’t need to put as much into the property as you would for a house.

Of course, with all positives there are also negatives as well. One of the major cons to this type of investment is that the location of the property really does make a huge difference to your success. If your units are in a nice part of town it will attract a different type of tenant than if it were in a worse area. Good locations will be able to benefit from better tenants, less repairs, less upkeep, and in most cases, they will always be paid on time. One must also be mindful however, that the nicer the area, the higher the purchase price.

Another con to storage investing is that you will be facing a lot of fierce competition. There are more and more self-storage units popping up, and this influx of activity in the market leads to more options for tenants. If you want to remain competitive you might have to lower your prices to grab more tenants.

Now that you’ve identified the pros and cons, and how to invest in storage units, you can determine if this investment strategy is right for you. If the answer is yes, now you need to find a way to either purchase an existing unit, or build one yourself.

Where to Start
One great way to purchase an existing unit is to find an owner looking to retire. You can usually purchase the property for a good discount, and inherit all their existing tenants. By choosing this method of procurement, you can cut out some of the learning curve and jump into a turn key business.

Another way to jump into this type of investing is to find an under-performing storage unit and purchase it. In this case, all the components for a successful business are already present, it just needs to be made more efficient.

If you decide to build your units from nothing there can be a multitude of advantages.

One of the big advantages is that you have the ability to make the building look exactly how you want it. This allows you to make it as efficiently as possible. which will ultimately make your investment more successful.

Another advantage to building your units is that everything will be brand new. Newer facilities obviously have the ability to command a higher price. In addition to this, they traditionally retain their tenants better than older buildings.

In summary, self-storage buildings can be a great investment vehicle. It has the potential to create a great rate of return, passive income, and all without putting a ton of money into it. However, like all investments, when you purchase a self-storage unit you are putting your money at risk. You need to do your research prior to purchase and make sure you understand both the dangers and the potential. I’m very excited to see where this industry is going in the future, and you should be too.

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Source: realtyevest

Investing in Self-Storage Units

What is Real Estate Syndication?

The question of, “what is syndication?” is often overcomplicated by many. The answer is simple. Real estate syndication is when investors effectively pool their intellectual and financial resources. Doing so enables them to place investments in projects and properties much bigger than they could either manage or afford by themselves. These syndicators have been in existence for numerous decades. The problem in the past was that it was extremely difficult for the investors to locate these groups and gain access on an individual basis. However, access became noticeably easier with the advent of crowdfunding. Real estate crowdfunding provides access to the basic fundamentals of a deal. This makes purchasing shares much easier for accredited investors because the old-fashioned approach of making small talk at a country club or paying caddy fees is no longer applicable.



Syndication Definition and Principles

The workings of a syndicated deal are relatively simple. The definition of syndication is an uncomplicated transaction between a group of investors and a sponsor. A good example would be two individuals who decide to form a partnership and open a restaurant together. One of these individuals has a lot of experience managing and working in a restaurant. The other individual has more funding to invest in the restaurant. The individual with the restaurant experience fills the role of the sponsor. This person will locate a good location for a restaurant or find a restaurant for sale and make all the arrangements. The individual with the financial backing fills the role of the investor and finances the restaurant. The individual with restaurant experience will run the restaurant. This entitles this person to a paycheck for the work they perform. Both of these individuals will receive a share or portion of the profits. This is based upon the amount of money and time that has been invested.

The Basic Role to Define Syndicate

A real estate syndicate has the same basic principles as the two individuals who opened a restaurant together. The sponsor is the operator and manager of the deal. The sweat equity is invested by the sponsor. This includes raising funds, checking out the property, acquiring and managing the property for the investment and handling the daily operations. The majority of the financial equity is provided by the investor. These individuals become the syndicators for the arrangement. The investment for the sponsor is generally in the area of 5 to 20 percent of the total equity capital required for the project. Approximately 80 to 95 percent of the remaining capital is supplied by the investor.

Setting Up a Real Estate Syndication

A real estate syndicate is very simple to set up. It is important there is proper protection built-in for all the parties involved. A real estate syndicate is usually structured for a Limited Partnership or as a Limited Liability Company. In the case of the partnership the sponsor will participate as either the manager or the general partner. The participating investors generally assume the role of either a passive member or a limited partner. Both the investors and the sponsor have clear cut rights. This includes voting rights, the rights to distribution and the fee paid to the sponsor for their management of the investment. These rights are detailed in either the LP Partnership Agreement or the LLC Operating Agreement.

The Profits of A Real Estate Syndicate

When the syndicators participate in a real estate syndication their goal is to make a profit. To define syndicate profit both property appreciation and rental income must be considered. This again encompasses the question of what is syndication. When a syndicated property’s rental income is distributed among the investors on a quarterly or monthly basis from the sponsor, this is considered a syndication definition. The syndicators receive the amount outlined in the preset terms. The value of a property usually appreciates as time passes. This means when the property is eventually sold the investors will receive much larger profits and the rents will be higher.

The Payment for The Real Estate Syndicate

When an individual asks what is syndication, it is generally because they realize this question usually involves a profit. To define syndicate profit the maturity required for the investment is critical. There are certain kinds of syndications that only require six to twelve months to reach full maturity. Other types can take as long as seven to ten years. Each individual who made an investment in the syndicate will receive a portion of the profits. When the deal is first set up the acquisition fee is determined. The average fee for the sponsor varies greatly. This fee can range from .5 percent to 2 percent and is strictly based on the details of the transaction. The average fee is 1 percent. A preferred return is received by all the investors involved with the project prior to the sponsor being paid for the work they have performed as a promotor or manager. The definition of a preferred return is a payment distributed to all the investors involved. This is generally an annual payment of 5 to 10 percent of the funding each investor initially invested in the project.

The Syndication Definition of Structure

To properly define syndicate structure the motivation of the sponsor is the key. The sponsor must be motivated to make certain the investment is properly handled and performing well. Without this motivation the investment may fail. An excellent example is a preferred return. A passive investor agrees to an investment of 50k regarding a deal offering a preferred return of 10 percent. The potential for the yearly payment is 5k. This will occur once the property has made enough money to cover the payouts. Once each investor in the project has received their preferred returns the remaining funds can be distributed. The distribution of these funds between the investors and the sponsor is based on the profit split structure originally set up by the real estate syndicate. This determines the amount received by the syndicators. An example of a profit split structure is 60/40. In this scenario the investors are entitled to 60 percent of the profits once their preferred returns have been received. The net of the sponsor would be forty percent once the preferred returns have been issued. Once all the preferred returns have been received the 60/40 deal is complete. If the amount of funds remaining is one million dollars the investors would receive 600k and 400k would go to the sponsor.

The 2012 Stats for Real Estate Syndication

The stats for syndication are important because this is where the profit comes into play. In excess of 47,000 investors took part in syndications in 2012. 2.3 million was the size of the average real estate offering. Approximately 80 to 95 percent of the initial financial investment was provided by passive investors. Between 5 and 20 percent of the initial financial investment was provided by the sponsors. The range of the preferred return for the investors was 5 to 10 percent. The amount of the average preferred return for the syndicate was 8 percent. The average acquisition fee netted by the sponsors was between .5 and 2 percent. The property management fee netted by the sponsors was between 2 and 9 percent. These yearly profits place the syndication definition prominently in the plus column.

Crowdfunding and Real Estate Syndication 

In the past, when individuals asked the question “what is syndication?”, the answer was slightly different. The period of time before the internet became prominent in society is referred to by many as the dark ages. This affected the syndication definition because it was extremely difficult to locate a network of syndicate partners who were already established. To define syndicate at this time would be a group of syndicate partners offering profitable deals with a basis of trust. In the example used earlier in this article regarding the formation of a restaurant this concept is extremely important. Forming a restaurant is not possible if the individual with the experience running and managing a restaurant is unable to meet the individual interested in investing in the restaurant. The same concept is true in reverse. This is where the question of syndication has been irrevocably changed by crowdfunding. To define syndicate under current circumstances adds a different connotation. Crowdfunding is using the internet to locate a crowd of investors interested in funding large projects. When a project receives the necessary funding, it is referred to as a go. If the required funds are not received the money is returned to the individual investors. A real estate syndication employing crowdfunding has a lower minimum for investors and is much more accessible. The potential investors are additionally able to find a lot of information regarding the specifics of the project online and now have the convenience of doing their research using a PC or tablet. Ultimately making a profit is what real estate syndication is all about, and it is easily brought into the comfort of the investor’s home through the use of crowdfunding.

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Source: realtyevest

What is Real Estate Syndication?