Are You an Accredited Investor? Here’s How You Know.

As crowdfunding grants new entries to the market everyday, Realtyevest uses cutting edge technology to connect accredited investors with lucrative real estate deals throughout the nation. By definition, an accredited investor is a person or entity that is qualified by the SEC (Security & Exchange Commission) to make large-scale investments based on income or net worth. At Realtyevest, we go the distance to maintain a secure and transparent community of accredited investors through the most simple process possible.

Accredited Investor: A Profile

To qualify as an accredited investor, one of the following must be true:

  1. A person must have earned more than $200,000 (or $300,000+ joint income for married couples) for the past two years, with a projected third.

OR

  1. A person must have a net worth of at least $1 million (or joint net worth of $1 million for married couples), excluding his or her residential property value.  

To calculate your net worth, use the following formula.

Net Worth = Assets – Liabilities

Accredited Investors can also be entities (i.e. banks, partnerships, corporations, nonprofits, trusts, etc ). To qualify, each entity must:

  1. Have a trust comprised of at least $5 million

OR

  1. Be owned exclusively by a group of accredited investors

We’re honored to set the platform for informed investments that support the continued wealth and success of our partners. Click HERE to sign-up.

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Why Assisted Living Facilities Are the Best Real Estate Investments of 2017

As national demographics shift and Americans between 50 and 90 years of age grow in larger numbers than our country has faced, the real estate market is experiencing a lateral evolution.  According to AARP, there is a rising 77 million baby boomers currently in the US, with 10,000 new people reaching retirement age each day until the 2030s. Per these stats, the need for credible, long-term support is rapidly sprouting into one of our nation’s greatest social and economic demands.

So goes a golden gap for capitalists looking for new entries into a flourishing investment market: assisted living facilities.

An assisted living facility is a care-based residential property where seniors can maintain independence while getting support from a licensed staff. In contrast to the traditional nursing home, assisted living facilities are communities for those who do not need constant supervision but can benefit from a daily support system to help with tasks such as meal preparation and medication regulation.

The Assisted Living Federation of America details that at the cynosure of senior care in assisted living centers should be independence, quality of life, dignity and personal choice, making this a core real estate group for the growing retirement demographic that will be virtually unaffected by seasonal market fluctuations.

Parallel to the demographic demand shift in recent decades, global business has been revolutionized by a technological boom that has eclipsed every industry. In a world where people can you send messages through space with the stroke of a finger, it is easier and faster than ever to diversify business and investment opportunities.

Of such methods enhanced by the ease of technology is crowdfunding; the process of raising money through a collective effort for a single purpose or project. With Realtyevest, accredited investors anywhere can enter the real estate market with ease while alleviating many of the risks associated with traditional investments.

Furthermore, included on our site is a bank of opportunities to make a fruitful and informed entry into the assisted living real estate space, with little to no experience or special insight. Our experts monitor trends and choose partners that offer the greatest benefit to our investment community. Then, we present a myriad of options through an interactive dashboard that allows everyone involved to track the progress of their investment. This is how solutions are created in the future and you can get started TODAY.

To sign up, register as a new partner here.

 

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RealtyeVest To Fund Camden Crossing Townhomes Near Amazon Fulfillment Center in Jacksonville, FL

President of Northeast Florida Home Builders Association to Build Camden Crossing

New Leaf Communities, in partnership with RealtyeVest, announced plans today to raise capital for the new construction of Camden Crossing, a 35-unit multifamily townhouse development located in thriving northeast Jacksonville, FL. Online retail giant, Amazon, has plans to open a fulfillment center which will add approximately 1,200 new jobs located less than 2 miles away from the planned property. Additionally, Camden Crossing will be located less than 2 miles from River City Marketplace (a large, bustling outdoor shopping center) and Jacksonville International Airport (JIA). Forbes named Jacksonville one of America’s fastest growing cities in 2017. The 1,495 square foot townhouses will have 3 bedrooms, 2.5 baths, single car garages, and will be located on 6.15 acres.

According to Lee Arsenault of New Leaf Communities, Camden Crossing will offer investors an opportunity to earn an above market return while being secured in a hard asset like real estate, including multifamily investments.  Lee is serving as President of the Northeast Florida Home Builders Association and has served as President of the Florida Builders Association. Adding to the extensive experience for New Leaf Communities is Lee’s partner John Latshaw, Jr. John is a highly experienced Ponte Vedra, FL Tax Attorney, developer, and development consultant specializing in small multifamily projects such as Camden Crossing. He and Lee formed New Leaf Communities when market trends indicated more and more people were choosing to delay house purchasing or downsizing and instead opting to rent.

RealtyeVest was chosen exclusively to raise capital for this project due to their powerful real estate crowdfunding platform, which allows individuals to review and invest in real estate online. According to Lee, “After meeting with Dan Summers and his RealtyeVest team, we are convinced of their excellent real estate acumen and that their crowdfunding platform is head and shoulders above any other platform we’ve reviewed.”

The RealtyeVest online platform and social network provide accredited investors unprecedented access to professional-grade real estate. Unlike competitors, RealtyeVest reviews each offering through an extensive due-diligence process and remains actively involved through completion, investing side-by-side with its investors. According to Dan Summers, “New Leaf was able to structure its capital stack to allow investors an annualized overall yield of 10% secured with 1st lien. Investment opportunities for the Camden Crossing project are now open to the public exclusively at the RealtyeVest online marketplace.

 

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10 Things to Consider When Investing in a Real Estate Crowdfunding Deal

Investing in real estate through a crowdfunding platform can be an exciting and lucrative endeavor.  This is especially true for investors who are new to the real estate investing industry.  Since the crowdfunding platform is new and unique to real estate, there are pitfalls in which investors should avoid when attempting to invest in a crowdfunding opportunity for the first time.  These are the top items investors should consider before investing in a crowdfunding opportunity. 

1. Experienced Real Estate Underwriters

As a real estate investor, knowing that a company has knowledgeable real estate underwriters helps ease the burden of wondering if this deal is real or even profitable.  The real estate underwriter’s primary focus is to analyze the deal, identify the risks involved, determine how to eliminate as much risk as possible and structure a deal that results in the best possible outcome. This process will ensure that deals are worthy of investing in.  The main focus of an underwriter is in the financial portion of the deal, it is imperative that the underwriter carefully assess all assumptions to ensure that profitability is achievable and that investors will earn a generous return on their investment.

2. Investment Returns  

As a rule of thumb, if you have extra money sitting around in a retirement account or savings account earning less than 10%, it would be wise to consider real estate to help grow your retirement nest egg.  Crowdfunding platforms can offer exciting opportunities to new investors that were not available to them even a few short years ago. Most crowdfunding platforms offer an annualized 10% yield per deal and some crowdfunding companies offer profit participation as an additional upside to investing in a particular deal.

3. Quality of Sponsor

Having a strong and experienced sponsor is one of the best ways to mitigate risk.  A strong sponsor will understand how to value the property in the initial acquisition phase. Successful sponsors understand what it takes to run a property through the investment cycle from the acquisition, managing the asset during the holding period, then timing the correct moment for selling the asset at its most profitable. Having a sponsor that can demonstrate the qualities will help ensure that the investment is profitable.

4. Quality of Asset

A strong real estate asset is a key to profitability. Depending on the asset class, being located in a highly desirable market contributes greatly to the asset as a whole.  In addition to the market, the asset’s quality can also be determined by trailing financials or rent rolls for example.

5. Cost of Entry

The minimal investment may not be important to some, but others, who just want to test the waters would likely not want to shell out, for example, $25,000 on their very first investment.  Lower minimal investments allow new investors to get a feel for crowdfunding especially if they are new to the platform or crowdfunding as a whole.  Ultimately, smaller minimal investments give investors a chance to find out if real estate crowdfunding is for them in the future.

6. Comprehension

In addition to having professional real estate underwriters analyze the deal, the information or data from the underwriter should be easy to follow and make sense.  An investor should be able to determine if a particular deal is worthwhile or not; simply by the way the information is presented on the offering page.  Advance jargon is sometimes confusing for a novice real estate investor. Real estate investing through crowdfunding should be easy and seamless, and not require an advanced degree of any kind.

7. Getting Paid and How Often

Getting paid should not be a mystery, it should be clearly stated somewhere within the deal.  If you cannot find how often or when you are paid, then likely you should find another deal in invest in all together; because making money is the reason you’re investing in real estate in the first place, right?

8. Exit Strategy

Knowing how and when the investor will get their money back is imperative to any investment opportunity.  A crowdfunding deal should have a clear exit strategy listed within the deal that clearly tells investors how the sponsor intends to repay the initial capital investment; best if in a sequence of easy to follow steps.  If the exit is not listed, you should be able to find out relatively easy from the platform’s customer service team.

9. Crowdfunding Platform

A real estate crowdfunding platform should be easy to navigate. The platforms should be secured and offer an investor every tool they will need to make an informed decision of whether to invest in a deal or not.

10. Fees

A real estate crowdfunding platform is best when they do not charge the investors fees for investing.  It seems kind of silly that an investor who is lending their money should pay to play twice. There are more than enough deals on different platforms that do not charge the investor asset manager or accounting fees. It would be wise to seek those out first, then fall back on investor fee-based platforms when they have an irresistible deal that would be worth paying the fee to invest in that particular deal.

Summary

As you can see, there’s a lot that goes into investing in a crowdfunded real estate deal.  Following these tips will help investors land the perfect deal on any platform regardless of how the platform structures the deal.  

When you are ready to invest, go through t this list to ensure that everything meets your standards as a real estate investor. 

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Crowdfunding and Self-Directed IRA Real Estate Investments

Crowdfunding for real estate is the collected efforts of many individuals to pool money to invest in a piece of property. Typically, these properties are larger buildings, such as a shopping plaza or an apartment building.

While these investments can cost a single investor an astronomical amount of money, real estate crowdfunding allows potential investors to diversify their portfolios with many smaller investments, and the benefits don’t end there.

For many choosing to participate in real estate crowdfunding, a self-directed IRA is the easiest way to go about the investment process. Traditional IRAs limit individuals on the types of investments they make, but self-directed IRAs are much different. A self-directed IRA is uniquely structured with the barrier of an LLC, where the individual is the sole managing member of the said entity. As a result, the managing member can make the decisions about where the investments are made. In a typical self-directed IRA, existing IRA or 401(k) funds roll over into a new self-directed account fully-managed by the LLC, whose sole managing member is the investor, themselves.

The Guidelines

There are a few basic rules set by the IRS regarding the types of investments that are allowed to be made, but a self-directed IRA holder does have the ability to invest in things like real estate crowdfunding. Because one of the stipulations regarding real estate investing using a self-directed IRA involves needing the property to be a commercial building, investors are also able to see a much higher return on their investment than in personal property.

Crowdfunding With SDIRA

What does this mean in real estate crowdfunding? First of all, it means that someone investing in real estate with a self-directed IRA isn’t using a dollar out of their own pocket for the investment. Potential real estate crowdfunding investors only need to identify a custodian to make the investments for them, open a new account and transfer the funds.

Diversifying Your Investment Portfolio

RealtyeVest accepts self-directed IRAs to invest in equity and debt offerings with as little as $5,000 in certain opportunities. This is a great way to make intelligent investments in real estate without “putting all your eggs in one basket.”

 

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10 Tips for Successful Real Estate Investing in 2017

Profits can always be made with the right balance of discipline during a real estate market slowdown, stagnation or depression. This article shows you the top ten tips that real estate investors apply to ensure success from their investments.

1.  Slow and Steady

Take the necessary time to learn about potential investment properties. Peruse the MLS, speak with realtors that are keen in the area you are interested in, research the comparable properties and prioritize making friends with a realtor that specializes in income properties. Spending time on research can keep you informed and ready for lucrative investment opportunities.

2.  Everything is Negotiable

Remember the age-old adage: “Everything’s negotiable?”  Well, there’s truth in that. Successful negotiating means being assertive enough to go after the deal you want, but insistent enough to always be willing to walk away from the negotiations that aren’t giving you those “warm fuzzies.” Make that sweetheart of a offer that the seller(s) look for in order to secure your deal. If it’s attractive to you, make it just as attractive to the seller and you will seal the deal!

3.  Never Stop Learning

Investment strategies, especially in real estate are ever-changing. Market trends go up and down like a seesaw on steroids. The best way to stay ahead of the game, or at least in the game, is by staying up to date on the newest and latest tactics.

4.  Discipline!

Carve out your budget. And stick to it. No matter what, a strict budget is top of the list in investing. Carefully set your parameters, do the math, research the market and set your budget in stone. Stick to properties that meet your budget and don’t compromise your budget to meet your needs.

5.  Consistent Progressive Cash Flow is the Goal

Despite anyone’s best efforts, an upbeat market can take a downturn just as it did in 2007-2008, leaving an investor drowning in depreciated real estate. In this case, while a loss is inevitable, you can minimize your loss and avoid financial ruins by focusing on investing in properties that maintain a confident cash flow monthly. Optimistic or positive cash flow does not rely on rent income or market values to increase. From the start of a potential deal, if the numbers don’t add up, start subtracting by removing your interest and funds from the table. Invest elsewhere.

6.  Make it Count

Starting off, be discriminative. Until your real estate investment portfolio grows, it may not be practical to purchase the distressed property in the historic area of town. You need time to gain a steady and positive cash flow on your investments. Less is not always more when starting out in real estate investing. That first property might cost a little more than what you imagined.

7.  In the Beginning, One is More than Enough

In the beginning, choose a category of investing and test it for a year.  For example, do you want to flip real estate and sell it? Or would you rather prefer renovating and renting? Once you have mastered that area with expertise, then start looking to take on another.

8.  Don’t Try to Boil the Ocean

Start small. It’s literally an ocean out there and one wrong decision could cause you to drown before you even start to swim. You may even want to start with your primary residence and rent a portion of it in order to get some capital flowing.

9.  Follow the Money

Follow the money trail. If there is a property in an area that can generate cash flow, you should jump on it like bears to honey! Whether your investment volume is big or small, get into sound investing and build your real estate dynasty one property at a time.

10.  Don’t be Shy when it Comes to Taking on New Challenges

If you are already in the real estate investment game, expand your horizon and broaden your territory by taking on new and different investment opportunities. Minimize the risks, but without making any hasty investment decisions. And by all means, go for something new.

The executive team at  RealtyeVest leads a group of expert analysts who acquire, manage, negotiate and purchase real estate acquisitions.

Built on a foundation of complete transparency, honesty and accountability, RealtyeVest delivers results to maintain a steady leading edge in real estate investing that yields profitable results.

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Rental Property Management 101

Those new to the real estate investment field are typically excited when they close escrow on their first property. However, that feeling can quickly turn sour due to unforeseen changes.

Nevertheless, real estate investing can be a great way to improve long-term wealth.

Below are a few items to consider when preparing for the future as a real estate investor.

 

MANAGING THE BUDGET

simple kitchen upgrades for rental property investments

Focus on small, simple upgrades for your rental property investment

Spend Your Time, Money Wisely
As the closing date approaches, many first-time investors assemble a list of wanted improvements, but this can be difficult as most first-timers have an unrealistic timeline concerning the completion date. There are always unexpected shortfalls, such as upgrades, renovations and other unforeseen costs. So, it’s important to be cautious when estimating a quick turnaround at a low cost. It rarely works out that way.

Be Prepared to Make an Investment of Sweat Equity
To minimize cost overruns and become better educated, a real estate investor should plan on spending a significant amount of time onsite — from the closing date until the tenant has occupied the property for a short period. Being an investment property owner is a lot of work. The owner must get bids from contractors, wait for deliveries, review work, shop for supplies, advertise the property and review rental applications. It might start out as fun, but in the end it is a lot of work. However, real estate investing is a long-term and wealth-building proposition. That’s why it’s important for an owner to invest his energy and time at the present moment.

Don’t Accept the First Contractor’s Bid
As with other major purchases, it is important to get several competing estimates to ensure a fair price on contracting work has been agreed upon. The more costly the job, the more bids the property owner should get. The bidding process can be long and tedious, but doing research now leads to better and less expensive bids in the end.

Concentrate on Small Upgrades
In most house flipping situations, things like flooring and paint usually require some work. Luckily, these are some of the easiest and most cost-effective upgrades to make. First impressions are everything and potential renters are more likely to keep things looking nice when they see that things are turnkey ready. It costs money to make these upgrades, but it pays off in terms of charging tenants higher rents.

  • Paint: Use neutral, bright colors and paint all the walls the same shade. When touch-ups are necessary — and they generally are — it’s nice to have only one color to consider. When buying paint, choose one that’s easy to clean and buy more than needed, so it’s easy to do touch-ups later on.
  • Flooring: Tile, vinyl, wood laminate and carpet. Tile is great for bathrooms and kitchens due to high moisture levels, and wood laminate is ideal for other rooms for easy cleanup and durability. Carpet isn’t usually advised for rental properties as it is easily stained and every tenant will want new carpet. By shopping around, an investor can find good deals on easy-to-install laminate flooring.

Look for Electrical and Plumbing Issues
A property that’s more than 20 years old should have its electrical outlets and water valves replaced. Get bids from plumbers and electricians before the property is listed. Water lines, valves, dishwasher hoses and drains can pose the biggest threat regarding leaks and floods. Electrical outlets aren’t as big of a risk, but they can end up looking unsightly after years of being painted over. An electrician can quickly change out all of the outlets and switches in a few hours.

Don’t Base Supply-Buying Decisions Solely on Price
When an investor gets bids and review costs at home improvement warehouses, they shouldn’t base purchase decisions solely on the price. Lowball estimates never stick when it’s time to make decisions on what to purchase. If the investor ends up buying the higher-priced item, they can end up going over their budget.

 

friendly tenants in a rental property

Do your due diligence when seeking tenants

FINDING THE RIGHT TENANT

If rent is any different than other monthly bills, it’s because it is the most expensive monthly bill that someone pays.

Follow Fair Housing Rules
It’s important to know that it is illegal to discriminate against rental applicants based on race, nationality, religion, gender, heritage or disability.

In addition, check to see if other states have their own Fair Housing Rules. These rules are put in place to prevent discrimination and alert landlords when leasing out properties to tenants for other reasons, such as felony convictions, income and employment or tenant history.

Perform Criminal Background Checks
It can be difficult to obtain the full story and, in some states, prevent a landlord from leasing due to a criminal conviction. That being said, it is certainly a good idea to check criminal backgrounds, which are public record and can be requested by email or at a local courthouse. Always be sure to check that an application hasn’t been falsified by verifying the person’s ID.

Look For Financial Responsibility
Also, it is important to have a tenant who shows financial responsibility. Run a credit check to see if a potential tenant appears to have trouble keeping up with car and phone payments. Moreover, it is likely that they will also have trouble paying their rent. Don’t let financial woes affect a real estate investment property. Another way to ensure that tenants will make on-time payments is to check employment history by requiring them to provide two payment receipts and proof of employment for the past six months. It is not ideal to have a tenant living above their means or one that changes jobs too often.

 

Moving Forward
While this is by no means a comprehensive guide to investing in rental property, these tips provide a great starting point. Real estate investors should supplement these tips with their own investigative work, as well as guidance from other, more experienced rental property owners. Other rental property investors can be a good source of advice and they can help new buyers set their expectations to a realistic level. Being a property investor is not easy; it’s more like a marathon rather than a sprint. However, if an investor paces himself and works hard success will come.

Crowdfund Your Next Real Estate Project with RealtyeVest.
Button for financing real estate

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On-Trend Investing: Affordable Housing

Warren Buffet provides one of the best answers as to whether investing in the mobile home community arena is worthwhile. He bought Clayton Homes more than a decade ago, seeing the housing crisis that was fixing to befall the nation. The foreclosure disaster is still affecting the market and causing former homeowners to scramble in search of affordable housing options.

Roots of the Mobile Home Market

The roots of the affordable housing market

The roots of the affordable housing market

The modern mobile home began as a travel trailer used by wealthy people to live comfortably as they roamed the countryside on family vacations. The military grabbed onto the usefulness by stationing these temporary housing units near factories that were producing products for the troops away in combat. They continued use for GI’s that returned and decided to go to college with their earned benefits. By the 1950’s, mobile housing was finding a permanent spot in the American landscape of affordable housing options.

The mobile homes of today are nearly unrecognizable to the predecessors. Most have pitched roofing, high-levels of insulation and stylish interiors. A few offer built-in storage areas, kitchen islands, fireplaces and garden tubs. They can be moved from one park to another, but it is generally cost-prohibitive to do this. Most tenants look for a great park to call home and stay planted there to avoid a $3,000 or more charge to move.

The popularity of mobile home park living has increased for several reasons. The housing bubble and foreclosure waves left many people with no housing and decimated credit scores. Those on annual fixed incomes can rarely afford the rental prices of traditional homes or apartments. Many people enjoy the feel of community and like the idea that they do not have to deal with lawn care and maintenance. The idea that once the mobile home is paid for, all they are responsible for are lot fees and utilities. This is something that is incredibly appealing for growing families. The 2013 census showed that there were 8.6 million mobile homes scattered in a variety of locations across the United States.

The affordable housing market today

The affordable housing market today

Who Lives in Mobile Home Parks?
Mobile home communities come in many varieties. There are more luxurious areas that offer clubhouses, pools and community centers, while there are also bare-bones parks that have been neglected and remain in poor condition. A well-managed park moves out the older trailers and sets rules and regulations to control disruptive activities or behaviors from tenants.

The primary residents of mobile home communities are those that are at or below the national poverty levels. They are generally the ones that are unable to afford down payments for traditional home ownership. The 2016 U.S. Census Bureau statistics show that 14.8 percent of Americans live at or below the poverty level of $24,300 dollars for a family of four. This translates to 46.7 million people. This leaves a lot of potential growth in the market for affordable housing options.

Benefits of Staying in a Mobile Home Park
The reasons people choose to stay in a mobile home park are individual, but most revolve around housing stability, economic factors and a feeling of community. If an individual or family has sought out affordable housing and found a solution, they are reluctant to try reaching forward to more expensive options right away. Having housing that is affordable and leaves a little money at the end of the month becomes a dependable way of life. Long-term tenancy breeds familiarity. People get to know one another and tend to look out for each other. The sense of community is tight in an enclosed park environment.

 

Growth Potential for the Mobile Home Park Market

affordable housing developments

Growth potential for affordable housing developments

With 8.6 million mobile homes in the U.S. as of 2013 and the estimated 46.7 million people at, or under the poverty level, the potential for continued growth is astounding. As baby boomers continue to age, retirement can mean living on a fixed-income, which is often shockingly low. There are plenty of available mobile home parks that are in desperate need of upgrades, whether it’s in plumbing, interior work or trailer upgrades. Creating a pleasant and affordable housing option will always bring back a great return on your investment.

There is no time like the present to get out there and explore your options in mobile home park ownership. Visit parks that are already functioning well. This will give you an idea of the goal mark to reach when purchasing ones that need a little extra TLC.

Dollar-for-dollar, mobile home parks are one of the easiest real estate housing markets to invest in, offering quick and steady returns. This is an option you should fully explore if you like the idea of a more hands-off approach to tenancy and property upkeep.

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On-Trend Real Estate Investing

One’s ability to seek trends, global or otherwise, is key to any prudent investing. Real estate investing supports an innate degree of risk along with an inherent level of reward. Thus, a real estate investor’s “risk aversion” is determined by the level of each of these requirements. This is considered to be a “rules-based” approach seeking knowledge to answer the question: “Why should I invest or not invest in this asset class?”

real estate market research fro investing

Make intelligent real estate investments

A key component in making sound real investment decisions is deciphering the misinformation from accurate statistical data. Conversations at the country club should not be a driver in the process. Investing should be viewed as a game of chess, not chance. The player/investor needs to be alert, aware of his or her weaknesses and strengths, mindful of the opposition and most decidedly enter the game with a plan.

Here is a look at some of the moving parts of the real estate investing market to help author an investment plan. Little in the U.S. macroeconomic data suggests overheating. GDP has settled in at about 2 percent and job growth is running at about 1.7 percent pace (2.5 million annually). The Fed has been overly cautious about raising rates due to volatility of data, financial markets and the geopolitical climate. Therefore, the veritable “punchbowl” remains.

“SKATE TO WHERE THE PUCK IS GOING, NOT TO WHERE IT IS” ~WAYNE GRETZKY

Now, let’s drill down a bit and look at a couple of cross sections of Americana. Jobs are no longer careers and millennials are not yet looking for the commitment of owning a home. They are footloose in the job market and reticent to establishing roots in any community. Understanding this trend, developers are building “condo” quality rentals which, when the market dictates, can change in mid-stream and become a sales driven opportunity. Also being considered is the multigenerational developments that allow millennials and Baby Boomers to coexist. Both have similar amenity and size requirements, which generates huge development options.

With over 10,000 Baby Boomers retiring every day and understanding the related socioeconomics, asset classes that were once taboo are now becoming the investment of choice. Approximately 19 percent of retired Americans have more than $250,000 set aside for retirement, while 34 percent of retired Americans have less than $250,000 and 47 percent have zero savings set aside for retirement.  What we have here is an aging population that will mostly be dependent on Social Security and Medicare. This opens the floodgates for interesting chess moves.

Affordable Housing

Affordable Housing is probably the last bastion of home ownership. Developers are now recognizing this option and have begun aggressively acquiring and upgrading Parks across the United States. Warren Buffet, as an example, moved into this space by acquiring Clayton Homes, the world’s largest builder of mobile homes. This type of housing is affordable, new parks are clean, safe and loaded with amenities. Most importantly, however, is the limited supply of available Parks. There are only about 40,000 such parks left because many have been acquired and redeveloped as urbanization has overtaken rural America.

retirees enjoying their real estate crowdfunding investments

Retirees are lending power to the real estate market

Assisted Living

As we live longer and become more dependent on others for our daily care, seniors are in greater need of assistance with daily living activities. Assisted living includes meal preparation, medication management, house cleaning, laundry and bathing. Although many seniors value their independence, they may require help with some of their daily activities. Many do not have family available to help care for them or it might be a matter of location, time and commitment.

This creates a unique opportunity to serve this age group. There is a large and growing demand for quality, comfortable residential assisted group housing for the elderly that provides caring assistance for daily living. Assisted group housing in a residential home is an emerging trend throughout America.

Many families prefer an alternative to institutional type living facilities for their parents. Many are looking for a home-style group residence that is affordable, safe and comfortable. Residents enjoy 24-hour caregiver support, private bedrooms with attached baths, fantastic home-cooked, dietitian-approved meals, housekeeping and laundry services, social activities, physical and mental exercise opportunities, as well as the optimal staff-to-resident ratios in the industry. This solution provides for a vibrant, happy community.

These are just some of the ideas behind on-trend real estate investment. Remember to look at things both from a macro and a micro level. Look for real estate segments that have reasons to exist and flourish. Pay attention to the details.

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6 Reasons for a Passive Real Estate Investment

1. AVOID INFLATION

Inflation and Appreciation

Cash is considered by many experts in the field to be the safest asset. Your earnings won’t lose value if it’s in a safety deposit box at your local bank, or hidden under a mattress. However, your capital actually does lose value each year, particularly if you don’t invest it. It’s the result of this perpetual issue called inflation. Average annualized inflation for 2016 was 1.3%. Meaning, if you sat on your cash that whole time its purchasing power would decline by that amount each year. This is one reason why people choose to invest in the first place.


Average annualized inflation for 2016 was 1.3%


2. ACTIVE INVESTING VS. PASSIVE INVESTING

There are many ways to choose a real estate investment and they generally can be divided into two categories: active or passive.

Active Investing

An example of active investing is the buying of real estate properties, fixing them up and selling them, or acquiring apartment buildings and managing the tenants. While this strategy can be lucrative, it can also be time and labor intensive. Many potential investors are ill-equipped, or simply do not want to take on these burdens. This is where choosing a passive real estate investment comes in.

Real estate property values tend to increase, which allows owners to increase the rent for their buildings. This protects investors against inflation.

Passive Investing

With passive investing, rather than purchasing a property that needs a lot of work, you provide the funding for real estate companies to purchase larger commercial properties for which they maintain. Crowdfunding allows various ways for you to invest in real estate on a passive basis. You can contribute to a loan, which entitles you to a fixed, regular interest payment. Or, you can provide the equity to own a small piece of the investment.

3. THE REAL ESTATE MARKET

Real estate accounts for a substantial part of wealth creation in the world.  It encompasses a wide array of property types, including apartment buildings, office buildings, the strip mall that houses your favorite restaurant and the hotel you frequent on the Florida coast. Real estate has long been a means by which some investors have generated cash flow and built value for the future. Thanks to changes in the regulatory landscape and the emergence of crowdfunding, passive real estate investments are now more accessible than ever before.

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Diversification

Many investors allocate their money across a number of different asset classes including cash, stocks and bonds. Some of those monies could be very liquid, like cash and stocks, while others are less liquid, such as investments in private funds. Adding real estate can further diversify your investment portfolio. The benefit of diversification is that you don’t have all of your eggs in one basket.

diversifying your real investment portfolio

Spread your investments across multiple real estate industries

4. DETERMINING THE RIGHT INVESTMENT TYPE

Determine the type of investment that is right for you by understanding your investment horizon and your risk aversion.

Timing

If you are considering investing in real estate, you need to be comfortable with the investment horizons. This is the length of time that an investor expects to hold a security or a portfolio. While stocks and other exchange-traded instruments are generally viewed to be liquid and can be exited at any time, private real estate investments are illiquid. This means the asset cannot easily be sold or exchanged for cash without a substantial loss in value. Most RealtyeVest investments are estimated to last two years.

Risk – Debt vs Equity

Like with the time horizon of an investment, you need to understand and be comfortable with the risks of the investment. There are two main types of real estate crowdfunding investing: debt and equity.

Debt: When making a debt real estate investment, the investor is in the position of a lender. Investors receive a fixed rate of return that is determined by the interest rate on the loan, which is secured by the property itself. Debt investments place the investor at the bottom of the capital stack, which gives the investor priority when claiming a payout from the property.


Some Other Risks: 1.) Vacancies  2.) Unexpected Maintenance  3.) Decline in Property Values


Equity: In terms of investments, equity is the appreciation of the value of a property over a given period of time. In some cases, the investor participates in this increased value. An equity investment generally does not have any collateral, such as with a secured loan, and therefore pays a higher rate of return.

Become a Passive Investor

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5. REDUCING RISK WHEN INVESTING IN REAL ESTATE

Beware of Too Much Leverage

One of the most important metrics in real estate investing is the loan-to-value ratio (LTV). Banks typically will not loan more than 80% of the value on a residential home. In the event home prices drop, maintaining a limit on LTV gives lenders a cushion if they need to foreclose on a property. Look to invest with sponsors who have enough invested in their own deals to weather unforeseen changes in the economy or in the property that would cause the property to drop in value. To help keep our member’s investments secure, RealtyeVest.com does not support any investments with a LTV greater than 75% on its platform.

Check on Reputations

As mentioned earlier, you want to be comfortable with the investment. Look for information about the sponsor’s (aka real estate developer/entrepreneur) background and previous projects. Check the property types, the history and successes of their current portfolio and make sure that they have been fully vetted for any legal issues.

Seek Diversification

Investors tend to appropriate their capital across many different asset classes including cash, stocks and bonds. Some of this capital could be liquid, such as cash and/or stocks, while others are less liquid, such as private fund investments. Adding real estate might further diversify your investment portfolio.

6. THE BENEFITS OF PASSIVE INVESTING

when to invest in real estate

How to start investing in real estate

With passive investing, nearly all the administrative functions are handled by other people. Unlike active investing — where you must find investment properties, monitor the property and deal with tenants, toilets and trash — the passive investor works with a partner and allows them to do the dirty work. While there is a fee for this service, there is also a promise that you will never get a broken toilet call at 3 a.m.

Additionally, due to crowdfunding, individual, smaller investors can now participate in much larger passive commercial investments, so your $10,000 investment could conceivably contribute to the acquisition of a $20 million building.

If you’re interested in passive real estate investing, the first step is to find the right partner. At RealtyeVest, we offer access to pre-vetted real estate investments. We conduct the due diligence on hundreds of properties and focus that energy by closely examining investments that have already been reviewed by our active real estate investors or sponsors. We also give you access to a personal investor dashboard so you can watch how your money grows.

With RealtyeVest, you have the resources, guidance and opportunity to become more invested in the real estate market. Now, you can take control and become a real estate investor!

The post 6 Reasons for a Passive Real Estate Investment appeared first on RealtyeVest Crowdfunding News.