Not only has real estate crowdfunding become more mainstream as an investment option, it’s also becoming an increasingly popular and efficient way for real estate developers and investment firms to raise capital. This transition means a larger deal flow of offerings for institutional quality assets that individuals can invest in.
Below are my three favorite real estate crowdfunding offerings available this week.
Potranco Commons
Photo: Courtesy of CrowdStreet
The latest offering on CrowdStreet’s platform is for a multifamily development in one of San Antonio’s most desirable residential pockets. Once completed, Potranco Commons will have 360 apartment units with high-end amenities and finishes at a more affordable rental rate than its competition.
Why I Like It: The location for this project offers an incredible opportunity for investors. The West San Antonio submarket is experiencing some of the strongest economic growth in the metro area, with a 37.4% population increase since 2010 and 8.6% projected growth over the next five years. The average household income has also increased 28% to $91,657 over the same period.
The offering has one of the strongest sponsors in the industry. LYND has over 40 years of experience in all facets of the multifamily industry and is one of the largest multifamily management companies in the country.
- Minimum investment: $25,000
- Target Internal Rate of Return (IRR): 22.9%
- Target equity multiple: 1.9x
- Target investment term: 3 years
Palisades at Pleasant Crossing
Photo: Courtesy of RealCrowd
RealCrowd’s latest offering is for a stabilized multifamily property in Northwest Arkansas with a strong value-add opportunity. The first phase of this property was completed in 2017, and it now has 396 units with a 95% occupancy rate.
Why I Like It: Investors are often faced with a choice between investing in a stabilized property with little upside or taking on the risk of a value-add property to realize the higher potential returns. This particular deal offers the benefits of both.
As it sits now, the property has low vacancy and strong positive cash flow. The sponsor anticipates being able to increase monthly rents by an average of $271 per unit once the renovations are completed.
- Minimum investment: $50,000
- Target IRR: 28.45%
- Target equity multiple: 2.02x
- Target investment term: 3 years
286 Lenox Ave IPO
Photo: Courtesy of LEX Markets
LEX Markets’ first real estate IPO is for a mixed-use property located on Lenox Avenue in New York City. The 4-story building has over 18,000 square feet of leasable space with 3 strong-credit tenants.
Why I Like It: The sponsor has a solid business plan and realistic expectations for the future performance of this property without making overly optimistic assumptions. More importantly, however, this offering is the first of its kind, allowing non-accredited investors to participate in a direct deal on a commercial property with a $250 minimum investment.
The offering also has the highest potential returns of current crowdfunding opportunities for non-accredited investors in a project as solid as this one.
- Minimum investment: $250
- Target IRR: 21.6%
- Target equity multiple: 2.11x
- Target investment term: 4 years
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