Is Crowdfunding The Best Commercial Real Estate Capital Solution For You?

The traditional process of real estate financing was drawn out, tedious and often lead to missed opportunities. Institutional banks and hard money lenders only give loans to the most creditworthy Sponsors with extensive track records. Crowdfunding arose as a solution to these hidebound resources and with the wisdom of the crowds behind the marketplace, genuinely innovating investments could be crafted.

You probably have been hearing about crowdfunding real estate investments a lot lately. The move towards online platforms for real estate investors who are actively investing in commercial real estate has grown sharply. This is an intuitive shift as thriving investment platforms allow investors to utilize technology to discover new opportunities. In the past, commercial real estate financing was not nearly this simple.

Types of Crowdfunding Platforms

There are two distinct types of real estate crowdfunding platforms: The first type primarily utilizes their technology to connect investors with real estate developers and sponsors. The other invests in these real estate projects themselves. The business model of the marketplace will either involve them charging a fee or getting a return from making direct investments in projects. Either way, the advantages to developers is faster access to more extensive pools of available capital.

Beware of technology companies masquerading as real estate experts in the crowdfunding space. Leaders in this industry should have a minimum of 10 years experience in underwriting real estate deals to ensure that all offerings made available have been properly curated and intuitive for sophisticated real estate investors who are searching for a quality deal to invest in.

As John McNellis, co-founder the development firm McNellis Partners, said at the 2017 ULI Conference, “To expect these 20-year-olds who are good at tech to be good at underwriting is unrealistic.“

For those who are just starting out in real estate, crowdfunding represents a unique opportunity to raise capital and work with professionals and successful real estate developers and operators. Although more established real estate developers may not have the need to check out crowdfunding platforms because they already use established lines of financing with trusted vendors, there are promising advantages to be gained by choosing the right crowdfunding platform.

Grow Your Investor Base

Well-established Sponsors would be wise to carefully consider the benefits of utilizing existing networks of accredited investors that regularly participate in offerings made available on their site. Choosing a platform becomes a matter of finding the best environment to attract investors and facilitate real estate projects consistently. Currently, residential and commercial building projects are seeing numerous benefits to raising money online.

The Marketplace is a popular option because sponsors are given a broad range of features to ensure their fundraising efforts succeed. The toolbox includes videos, webinars, and images that are useful for spotlighting their project’s unique selling points. They receive a specially-designed landing page which helps attract the right kind of investors quickly.

Lower Fees

Unlike many real estate crowdfunding platforms, RealtyeVest does not charge investor fees and offers a Marketplace in which Sponsors can waive fees upon completion of funding, which can end up being a decisive factor when choosing a platform. Using crowdfunding allows businesses to implement a streamlined process for obtaining capital that eliminates hefty fees from intermediaries. With fewer expenses and a higher profit margin, it doesn’t take long to see why these type of alternative financing is becoming so popular.

Since the platform handles all the heavy lifting of the financing deal, it allows developers and operators to specialize in what they do best. For most companies in this sector, visualizing and promptly executing on specific real estate projects is more crucial than handling the tedious details of putting together the financing package.

Why Make Financing More Difficult Than It Needs to Be?

Financing construction projects (or the purchase price of existing properties) is a crucial building block towards the ultimate success or failure of any project. In the past, the process was a series of clearing hurdles. Streamlining the operations and using online management tools reduces expenses while increasing transparency. Credible companies are aggressively expanding their portfolios, and crowdfunding platforms vertical growth continues to boom.

For newer developers or ones with more innovative ideas, crowdfunding is a way to bypass limitations to expand rapidly. Being able to leverage a network of investors is the fastest way to gain access to the funds needed to turn ideas into final products! It’s time to consider these modern tactics or may be forced to fall back on traditional, less attractive and cumbersome methods.

Explore the World of Real Estate Crowdfunding

Create a free account with RealtyeVest and discover the power of a full-stack financing platform. The only limitations are imagination when it comes to putting together a winning real estate deal. In the next few years expect to see the trends towards online deals growing faster. Platforms are expanding the financing options that they make available, opening up the criteria about who can invest and the types of allowable deals.

Whether your business focuses on multifamily properties or large commercial retail ventures, a crowdfunding platform like RealtyeVest can help you reach your capital raising goals. Discover new possibilities that put more money back in your pocket while limiting the time spent scouring for potential backers for your project and time spent managing investors and growing your network.

Your next deal can be done quickly and efficiently using a leading real estate crowdfunding platform. Profitable returns and happy investors are virtually a few keystrokes away. Why delay when the financing you need for tomorrow’s project is available for you right now?

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Raising capital: Old school vs New school

“Dialing for dollars,” a phrase used by real estate investment firms trying to get capital raised for their deals. It usually lasts from opening to the close of business every day, and would go on until the deal closed. That’s how it was done in the 20th century. Old school. In the 21st, where technology is a driving force, it’s all about making things easier, and that includes raising capital.

Real estate investment firms all over the country are acquiring properties and turning them into profit. However, this is no easy feat. A lot goes into raising capital for a deal. Today, real estate sponsors will target an acquisition. Once the firm comes across an acquisition, a Letter of Intent (LOI) is drawn up, which is an agreement between the sponsor and the seller outlining the price and terms. Once the LOI, and subsequently the Purchase and Sales Agreement (PSA) is signed, the process to raise capital begins.

First things first, a Private Placement Memorandum (PPM) is drafted by legal counsel which normally will take a month and $10,000-$20,000. This is followed by dialing for dollars.

To get started, one maybe two people with the firm sit down and look over an existing investor list and make warm-calls to investors advising them of a new opportunity. These firms in most cases, have a Reg D 506(b) exemption, which prohibits general solicitation of the real estate offering, and is only offered to friends, family and “existing” clients.

Not being able to reach out to new investors means relying on their existing network to support the project, which slows the success rate considerably. The firms can not advertise under the exemption, making it incredibly difficult to get the word out about a project.

Then, once these firms start to receive investments, managing investors and making distributions to investors or entire entities in multiple places is another ordeal.

It’s a long drawn out process just to get even a percentage of the funds raised for a new project, that in many cases result in success, but are costly and time-consuming. Fortunately, technological advances have served as a catalyst to launch a once formidable task into effortless achievement.

Step into the new school, now real estate firms have the option to manage their fundraising efforts from one location. Online platforms and accompanying software help sponsors manage investors and use promotional tools that will streamline a faster more consistent capital-raising process.

Sponsors who are formidably exhausted by the idea of “dialing for dollars” now have significant capabilities such as managing investor information, and sending documents electronically that allow for e-signatures. This eliminates the need to make constant phone calls and sending documents via snail mail. Contemporary methods of raising capital now include the use of accessible software that eliminates the need for sponsors to have to send documents and distributions to multiple places.

Additionally, modern technology allows for easier and faster communication. Sponsors can now issue correspondence and updates and communicate with investors via email and chat.

Keeping in mind that to be able to take full advantage of the software capabilities, sponsors need to be able to get new investors on board. That’s when promotional tools become an invaluable part of the process, as sponsors now have the ability to use a variety of multimedia applications to engage existing and prospective investors. Digital marketing now plays a huge roll in disseminating real-time data instantly to tens of thousands of investors with the click of a button.

Video, imagery, webinars, podcasts and the ability to share these things on social media are not only changing the way sponsors generate buzz about their projects with the goal of securing investment funds, but it’s also an extension of branding sponsors can take full advantage of.

In the past, much of the rate of success depended on the managing of many aspects of bringing a project to fruition. Now, sponsors can decide on one platform and utilize several digital marketing strategies and high level analytical tools to gauge investor’s interest in singular deals. This in turn, enables the sponsor to create better targeting and segmentation through email, syndication, and content marketing. Essentially, sponsors now have the option to build upon those old school practices by using available technology to improve their capital raising methods.

Click the following link to learn more about utilizing a commercial real estate investing platform.

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RealtyeVest Marketplace For Sponsors

Jacksonville, FLA (September 29, 2017) ― It started as a simple thought. How can we interface with sponsors and utilize our crowd-sourcing technology? The solution, a new means to give sponsors an advantage over companies still using traditional methods. The RealtyeVest Marketplace is shifting the way sponsors raise capital with a simple integration of their methods and our technology.

Raising capital is now easier than ever. RealtyeVest marketplace supplies sponsors with both a stage to present their projects and the technology to aid in expediting acquisitions, achieved with an all-encompassing technology resource that manages the entire capital raising process.

Using traditional capital raising methods can be daunting. The rate at which sponsors can successfully raise capital and close the deal on a project can be considerably slow. Furthermore, paying out large groups of investors can be complicated, particularly when they’re coming from multiple entities. Lastly, sending documents to numerous investors can be tedious and can possibly become quite costly. These hurtles typically are cumbersome and expensive.

With RealtyeVest Marketplace, sponsors can use the company’s 506(c) exemption which allows investors to register and pledge same-day. This acts as a place-holder until accredited. Once potential investors go through our seamless accreditation process and are approved, they may then fund their investment into the sponsors escrow account. Most real estate companies have a 506(b) exemption, limiting the number of non-accredited investors to 35. Real estate companies can use either RealtyeVest’s 506(c) exemption or the 506(b) which offers a greater pool of non-accredited investors.

The RealtyeVest Marketplace also supplies various tools for sponsors such as the capability to include imagery, videos, webinars, and other promotional means to showcase their uniqueness. The platform not only comes with a designed landing page, but it also includes syndication, and the use of technology to better leverage the sponsor’s existing group of investors while also exposing them to new investors.

Sponsors have access to custom CRM tools for better investor management and communication through features like chat and email protocols. A Sponsor Dashboard is also featured within the Marketplace and includes many capabilities that facilitate document management, payouts, task confirmations, real-time data, and investor enrollment in one location. This subsequently results in lower overhead and faster closings.

In summation, RealtyeVest Marketplace is replacing the traditional capital raising methods with streamline technology along with drastically reducing fees and overhead.

All of these benefits are meant to simplify the capital raising process for all parties involved. More information about the Marketplace can be viewed on here.

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Real Estate Crowdfunding 101: Interview with Dan Summers, CEO of RealtyeVest

Last week Dan Summers, CEO of RealtyeVest, sat down with OakPeak Equity, an investing and management company, to talk about Real Estate Crowdfunding. The interview details the thought behind creating RealtyeVest, and why it’s a good idea to merge real estate with investing. Take a look at the interview below to get some insight on a fairly new industry that’s about to shake up the investment world:

AN INTERVIEW WITH THE CEO OF RealtyeVest – Dan Summers

SEPT 26th 2017

Good morning! As part of my ongoing efforts to provide Oakpeak Newsletter readers with unique insights into the real estate industry, I will periodically interview executives at some of the emerging real estate crowdfunding companies as well as real estate private equity firms. We at Oakpeak are kicking off the ‘Interview the Executive’ series with an interview with the CEO (Daniel Summers) of a fast growing Real Estate Crowdfunding firm RealtyeVest based out of Jacksonville, Florida. If interested, you can also review RealtyeVest’s latest San Antonio, Texas based multifamily offering here.  I kicked off my interview with Dan Summers by asking him to give Oakpeak Newsletter readers an overview of RealtyeVest…

Question I: What is RealtyeVest and how does it differ from the multitude of real estate crowdfunding firms that have mushroomed over the last few years?

RealtyeVest CEO Dan Summers: RealtyeVest is a real estate company first and a technology company second. That’s our biggest distinguishing factor. I’ve personally owned and developed well over $1B in multifamily, office, retail and flex-office. My resume in this industry stands shoulders above any in the crowdfunding space. We also invest in every single deal on my site. No one else can make that claim. Our future is to stay nimble and cutting edge. We want to continue to marry technology with real estate investing. For instance, introducing a one-stop seamless process for IRA’s to invest on our site. We’re working with one of the largest custodians right now to make that happen. What was once a 7-10 day process will soon be a 24 hour process.

Question II: Can you talk a little bit about yourself and your background?  What was the catalyst behind launching RealtyeVest?

RealtyeVest CEO Dan Summers: I have been in the real estate industry nearly 40 years. There isn’t much I haven’t seen or done. I’ve ridden every peak and valley. I’ve touched every aspect from Brokerage to Development to over $1B in acquisitions. I’ve officed in Chicago, Houston, San Antonio, Pittsburgh and now Jacksonville. I started a 1 man company and grew it to 147 full time paychecks, rolled out its IPO within 10 years and retired at the ripe age of 47. Started another acquisition company in 2013 with several Goldman Sachs ex-pats out of Singapore. We bought multifamily in markets with a story. RealtyeVest was my answer to 30 years of expensive PPM’s, a limited capital audience and laborious SEC reporting. When the solicitation floodgates opened in 2012 as a result of the JOBS Act, I took immediate note and tracked the competition for 12 months. I was amazed at the imbalance between seasoned real estate experts and digital marketing millennials. My peers were reluctant to enter the technology world but the millennials jumped in with both feet. That was the beginning of what is now RealtyeVest. I rebuilt my underwriting team and hired the most talented digital marketers available in NE FL. I’ve built a company once again from scratch but this time with a wide open playing field and limited competition.

Question III: Which among the following real estate asset categories: (multifamily, healthcare, student housing, office buildings and retail) do you consider to be relatively “safe” especially for the individual investors who often participate in crowdfunding deals? Which are the markets (from a geographic perspective) that you are bullish on?

RealtyeVest CEO Dan Summers: No doubt Senior Housing. With 4,000 Baby Boomers turning 85 every day together with an additional 12,000 retiring daily, this asset class has the most staying power. This is an undeniable demographic that can’t be argued.  Couple the demand with supply or actually a lack thereof and you get a perfect storm. Blend in some nuances like retirees payments are normally secured by insurance, the government and/or an estate lends a heightened level of security to your investment.

Question IV: Where do you think we are in the real estate economic cycle (close to the peak or just mid-way there)?

RealtyeVest CEO Dan Summers: The light in my crystal ball went out ages ago but one thing I can attest to is real estate has no plateaus. It’s either up or down. Nothing in between. The question is…. when is that “Tipping Point”. When does Expansion turn into Over-Supply? The 2 benchmarks when determining where you are in this particular Market Cycle are Vacancy and Construction. Keep your eye on the GDP, rental rates and occupancy. With a strong GDP, job growth ticks up resulting in higher occupancies creating higher rates and eventually creating a need “or” opportunity for new construction. I think this where we are now but once again watch for the next “Tipping Point” when supply and demand meet. Vacancy starts inching up and while rent growth may remain it retreats a bit casting a decrease in overall revenues.

Question V: Finally, What are your thoughts regarding the future of Real Estate Crowdfunding?

RealtyeVest CEO Dan Summers: The real estate industry in large has long been overdue for a disruption. When you consider how archaic the traditional lending platforms are along with the minuscule returns investors are receiving from institutions, IRA’s and 401K’s, it’s no wonder why the real estate crowdfunding industry is expected to generate nearly $150B in managed asset within the next 5 years. Technology continues to upgrade the experience investors realize making the process seamless and transparent. There are 8.5M accredited investors in the US and less than 1% are actual investors on crowdfunding sites. This together with the Trillions of dollars in IRA’s and less than 3% are self-directed. Crowdfunding will mature into a sophisticated investing platform that will outpace Wall Street within 10 years.

(This interview was conducted by OakPeak Equity staff, and was published in their newsletter.)

 

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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 real estate crowdfunding platforms; 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.

 

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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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Certainty in an Uncertain World…

 

It’s been said the only thing certain in life is death and taxes.

Of course, properly structured and well-advised real estate investors can usually mitigate most of their taxes.

Meanwhile, before people die, they live.  Along the way, they get older.  And as people age, their needs change …

… and because entrepreneurship is about serving needs, it’s a safe bet there’s some opportunity in meeting the needs of aging people.

In a recent radio show, we talked about investing in undeniable demographics … specifically, the baby boomers … who are moving into retirement and beyond.

A few days later, this headline popped up in our news feed:

More Growth Ahead in Seniors Housing – NREI August 16, 2017

“… research shows continued confidence in improving fundamentals …”

Of course, if you’ve been following The Real Estate Guys™ for any time, you know senior housing in general … and residential assisted living in particular … is a niche we REALLY like.

The article affirms our belief that …

“ Demographics continue to be a big driver for development.”

“ ‘As active as the market is with the product that we have today, we are looking at the tip of the iceberg in terms of boomers hitting retirement age,’ says Scott Stewart, a managing partner at Capitol Seniors Housing, a private equity-backed real estate acquisition, development and investment management firm based in Washington, D.C.”

“ ‘The fast-paced growth of that population in that sector is going to make today’s discussion of overbuilding obsolete, because there just aren’t enough places for everybody today,’ ” he says.”

 The article is addressing … diffusing … concerns about over-building in the niche …

“ Demand mops up new supply.”

 “Despite the new supply coming online, respondents remain confident in improving fundamentals. A majority of respondents (78 percent) anticipate that rents will rise over the next 12 months …”

Other notable comments include …

“When asked to rate the strength of market fundamentals by region, the South/Southeast/Southwest rated the highest.”

 “When comparing with other property types, respondents continue to rate seniors housing as a highly attractive property type. Its scores topped that of the five major property types on a scale of one to 10.”

Okay, so it’s probably clear there’s some real opportunity here.

But if you’re a Mom-and-Pop investor, does it make sense to jump into a niche that’s attracting big players … or are you just cruising for a bruising?

No … and YES!

When you invest in housing for seniors it’s critical to understand the difference between a high-density community and a residential facility …

… and not just from the investor’s perspective, but from the resident’s perspective.

Let’s start with the resident …

There are some seniors … probably MOST … and their children (the decision makers in many cases) who’d rather see Mom or Dad live in a real home …

… in a tree-lined residential neighborhood, with a backyard, and neighbors … where residents don’t feel like inmates in an institution.

Please understand … we’re not slamming the great people or services provided in bigger facilities.

We’re just saying from a senior’s perspective, having a room in a home in a regular neighborhood FEELS a lot different than living in a room at a campus for old people.

But for a BIG investor, those individual homes are a logistical problem.

To move BIG money, you need economies of scale and the ability to buy or build a lot of inventory at one time.

It’s the same problem Warren Buffet alluded to when he told CNBC …

“I’d buy up a ‘couple of hundred thousand” single-family homes if I could.”

The challenge, as noted in this Forbes article about Buffet’s statement, is …

“… the cost and logistics of making such an investment in large enough size to move the needle for Berkshire Hathaway is prohibitive.”

The point is big money can’t play well at the single-family residential (SFR) level …

… even if the SFR’s are being converted into highly-profitable residential assisted living facilities.

But YOU can.  And that’s why we like them.  Think about it …

The supply and demand fundamentals are solid.

The priority for expenditure is near the top of the list for any family.  Taking care of Mom or Dad is far from a discretionary purchase …

… so as an investor, being that far up your tenant’s payment priority ladder is a much safer place to be in uncertain economic times.

Plus, much of the money to pay you comes from insurance, government, and the senior’s estate.  In other words, you’re very likely to get paid … even in a weak jobs and weak wages economy.

Also, you don’t have to compete with big money investors, even though they clearly see the opportunity and are moving into the space.

That’s because the barrier to entry for the big money isn’t how MUCH money is needed … it’s how LITTLE is needed.

Meanwhile, the customers would rather live in YOUR product than big money’s product.  So while big money is adding to supply, they’re not really in your niche.

This is a BEAUTIFUL thing.

But it gets better …

Residential assisted living homes can’t be mass produced.  They need to be built or converted one at a time.  There’s very little threat of a big player glutting the market.

And taking lessons learned from watching hedge funds move into the SFR space … big money was only able to acquire tens of thousands of SFRs because huge blocks of inventory were available temporarily through mass foreclosures.

We don’t think there’ll be mass foreclosures in residential assisted living facilities.  They’re way too profitable.

But because this kind of senior housing is in high demand and highly profitable, at some point big money will start assembling them …

… buying up groups of homes from multi-facility operators … and then buying up nearby individual facilities which can strategically integrate into existing operations.

It’s called consolidation … and when it comes, big money will bid up existing operations (creating equity for those already there) …

… because they can recover the “over-payment” through operational efficiencies and financial leverage.

Between now and then, for the street level investor, the big opportunity is to be part of building the inventory by converting homes into residential assisted living facilities …

… cash-flowing along the way … then one day cashing out to big money players.

And if those big money players never show up … just keep on cash-flowing while providing a much needed service to the community.

Until next time … good investing!

Certainty in an Uncertain World… is a post from The Real Estate Guys Radio Show.

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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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Press Release: Introducing Exclusive No-Load Pledge Fund

Offers Investors Unique Opportunities in High-Performing SFR Asset Class

Jacksonville, FL, June 15, 2017 — RealtyeVest seeks accredited investors to create an exclusive $1M Single Family No-Load (1) Pledge Fund for the fast financing of highly opportunistic off-market Single Family Residential (SFRs) deals in North Florida’s profitable SFR buy-renovate-sell market. Investors in this eFund strategy will have a strategic advantage over competing non-fund investors.

“Given the number of Funds seeking capital in today’s private equity market, emerging managers often run into difficulty finding investors willing to fully commit their capital for 10 to 12 years in a traditional blind-pool private equity fund structure,” said Daniel Summers, CEO of RealtyeVest. “As a result, our clients have increasingly asked us about short-term, No-Load alternatives to the traditional private equity/debt Fund model.”

What is a Pledge Fund
A Pledge Fund is an arrangement where investors pledge a predetermined dollar amount into an investment pool with pre-disclosed parameters. Sponsors (real estate operators) have access to the pledge fund for fast financing of attractive deals, enabling them to almost always edge out the competition. Details of every investment opportunity are completely transparent, providing investors the choice, on a deal-by-deal basis, whether to participate in an investment.

Hottest Market Opportunities
North Florida is one of the Real Estate Markets in Florida and in the United States according to Forbes. Single family properties are increasingly in high-demand and selling quickly in the Greater Jacksonville area. Real estate investors who have their financing secured ahead of time stand the best chance of acquiring the hottest properties normally without layers of brokerage fees, and earning aggressive financial returns on their investment.

Pledge Fund Property Distinctions

  • Located in Duval, St. Johns, Clay, and Nassau Counties
  • Off-Market
  • Single Family Residences
  • No Mobile or Manufactured Homes
  • No Rural Areas, Located in Up-Trending Neighborhoods
  • ARV (After Repair Value) Generally Between $100k – $300k

Pledge Fund Financial Overview

  • $1,000,000.00 Pre-Pledged Fund
  • Interest Only Loan (2)
  • 10% Interest Paid Monthly
  • 10% Profit Participation From Net Profits (5)
  • Secured By a 1st Mortgage with 1st Lien Position (3)
  • Pre-Paid Interest Will Be Held in Escrow and Drawn Upon For The Length of Term
  • Loan to Verifiable ARV (4) Not to Exceed 70%
  • Normal term is 6-9 months
  1.  No-Load Fund – A no-load fund means you can invest in single-family homes shares of the fund at any time without a commission or sales charge.
    Interest-Only Loan – A non-amortizing loan in which the lender receives interest during the term of the loan and principal is repaid in a lump sum at maturity.
  2. 1st Lien Position – A lender or creditor in a first lien position has priority in case a debtor defaults and collateral has to be liquefied to settle the debt. For example, mortgage lenders are usually in a first lien position; if a borrower defaults on his payments, the mortgage lender is the first creditor to receive remuneration from the sale of the property.
  3. ARV – ARV stands for After Repair Value. This is an estimated value of a property after it has been completely renovated. This is a crucial number for those flipping homes and allows you to calculate the spread between what you should purchase it for and the price you can expect to resell it for.
  4. Net Profits – defined as Gross sales price less any and all acquisition costs, holding costs, rehab costs, closing costs including but not limited to liens, commissions, title charges, etc.

Carpe Diem
Because RealtyeVest’s Single-Family No-Load Pledge Fund is financing properties exclusively in America’s hottest real estate market, the Pledge Fund will quickly reach it’s $1M funding goal. Accredited investors are encouraged to immediately express their interest in pledging to the fund in order to seize their spot in this unique, high-yield investment opportunity.

Visit realtyevest.com/pledge-fund to learn more about their Single Family Pledge Fund. And read their educational article to learn more about Pledge Funds.

Connect with RealtyeVest crowdfunding on social media @RealtyeVest, on Twitter, Facebook or Linkedin.

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Why Pledge Funds Are Becoming More Popular Than Blind Pool Funds

It’s a challenging environment for fund managers. Investors want more control over their investment decisions and to “know” exactly what they are investing in. Investors also want good overall returns while maintaining some control over what they are investing in. For these and other reasons, the Pledge Fund is exploding in popularity over the more traditional Blind Pool Fund.

Old concepts become new again, particularly in the investment world. Pledge Funds are an old concept that is finding increased usage in the real estate investment world. Investors are embracing the control and power that Pledge Funds give them over Blind Pool Funds. To understand just why they are becoming more popular, it’s important to know what they are and the advantages they have over Blind Pool Funds.

Pledge Funds Defined
Pledge Funds are private equity/debt funds that are set up to invest in projects within a very limited set of parameters. The managers of the Fund find projects to invest in that meet the pre-determined set of parameters. Investors are given information on the project and its expected returns. Projects are funded on an individual per deal basis. If an investor doesn’t want to fund a deal, they don’t have to, even if every other investor in the fund invests in the project.

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Pledge funds are seemingly a 21st-century investment vehicle, but a form of the pledge fund has existed for centuries. In fact, the railroads were built with a form of this fund. It was only recently that investors chose to turn over all investment authority over to fund managers.

It’s clear that Pledge Funds offer advantages when it comes to making investment decisions. These advantages are becoming even more pronounced in industries like real estate. Pledge Funds put decisions in the hands of individual investors, but the actual managing of the investment stays with the fund managers. It’s a powerful advantage for those who want an active role in their investments without the day-to-day management work.

Blind Pool Funds Defined
Blind Pools Funds for investors to investing private equity and debt fund where investors invest in the Fund and a fund manager has wide latitude in determining what investments are made and when they are made. Investors in the blind pool fund do not green light or red light investments as these decisions are made solely by the fund managers.

Blind Pool Funds became popular in the 1980’s and 1990’s with the rise of venture capital and angel investors. While they are still quite popular, some investors began to shy away from them after the dot-com bust. Many Blind Pool Funds had made investments in ideas that were never destined to earn money and some investors lost heavily. A good example is the spectacularly famous flop that was Pets.com.

The obvious advantage of Blind Pool Funds is that decisions are made by the fund managers. The fund managers know that they can throw the weight of the fund behind any project they feel should be backed. Investors don’t need to worry about investment decisions because they are made by skilled fund managers.

Pledge Funds vs. Blind Pool Funds
Pledge Funds have the distinct advantage of putting investment decisions in the hands of the individual investors. They are not bound to invest in what the majority of the investors in the fund want to invest in. If the majority of the investors want to invest in a new shopping mall, those investors who feel there is a shopping mall surplus can choose to abstain for investing in the project.

Pledge Funds can easily limit themselves to certain real estate sectors, like single-family real estate, making the investment parameters naturally narrow. Individual investors understand what the projects are doing and what the expected returns are. They know whether an investment is a good choice or not and can choose to pledge their funds accordingly.

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Investors without the time to manage or determine what investments to make are a good candidate for a Blind Pool Fund. It’s a set it and forget it method of investing that can solely focus on fund returns. Investors may also fall into this category if they don’t have access to investment information or support.

It is possible for Pledge Funds to provide the right kind of investment information support to these investors so that they feel more comfortable pledging or not pledging an investment. Just because a fund allows an investor to make a choice, it doesn’t mean they are forced to make a choice. The fund manager can give advice on real estate investments. It’s this flexibility that is making pledge funds a popular choice.

As the real estate investment market continues to change, investors should definitely look at the Pledge Fund as a popular alternative to the traditional blind pool fund. It may provide just what investors want and need when taking control of their investment choices. With the right kind of management, they can produce above average returns while providing investors with a good choice of real estate investment vehicles.

This is why RealtyeVest has chosen to focus its first ReV Pledge Fund on single-family homes in the hottest real estate markets in the United States. In the right market, single-family investments are predictable and offer returns ranging from 10% – 14% annualized yield. The ReV Single-Family Pledge Fund focuses on debt investments with limited up-side profits participation in Northeast Florida that are secured with a 1st lien mortgage. This short-term investment fund allows investors to pre-fund quality investments, securing their position in Northeast Florida’s highly competitive real estate market. The ReV Pledge Fund was designed for both novice real estate investors looking for a simple and seamless way to invest in single-family buy-and-sell projects as well as accredited investors searching for a great starting place with quick turn arounds. If you fall into either of these categories, the ReV Single-Family Pledge Fund is a great solution for you!

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