- Hey guys, what's goin' on?
This is Seth from the RETipster blog
and I wanted to put together
this little video for you guys
just to let you know about
this real estate crowdfunding website
I learned about not long ago
called Equity Multiple.
The whole concept behind real estate crowdfunding
and the reason why I think
it might be worth you consideration,
just in case you weren't already aware,
is on my blog I talk a lot about real estate investing,
buying and selling land or rental properties
and these things are like running
a full blown legitimate business.
And there's a lot of stuff you have to do
when you're running a business like this.
You gotta find deals, you have to evaluate deals,
sometimes you have to find the funding for it,
sometimes you might have to do
improvements to the property,
deal with tenants.
It's just a lot of stuff that goes into
running a legitimate , profitable
real estate investing business.
And a lot of us, we wanna get involved
with real estate investing,
but we don't wanna deal with all of that stuff.
Like, it's just a lot of hats to wear,
it's a lot of things to manage.
And for some people, they already have the money
or they already have the net worth
and they wanna get started but they don't wanna
dive into a whole new business venture.
They just wanna put the money in real estate
and watch it appreciate or produce cash flow of some kind.
And for those kind of people who
just kind of wanna take the laid back approach
where they don't have to do all the hands-on work,
something like Equity Multiple could be a really good fit
because essentially how this works is,
Equity Multiple finds and vets deals
and then they present them to their investors
and the investors can invest their money
in an actual property.
And sometimes that investment
is in the form of syndicated debt
where basically those funds are being used as a loan
to a sponsor who is then renovating the property
or improving it in some way
so bascially your money is essentially being used
as a lending tool and you can earn interest income in that
and sometimes your money can be used
as actual equity into the property
so you're sort of like a part-owner in that propery
by the nature of your investment through Equity Multiple.
And if you've been following my YouTube channel
for any length of time, you may know,
I've talked about other
real estate crowdfunding platforms in the past
and a lot of them, I mean,
they're kind of similar from a high level perspective
but most of them vary in the way that they function.
Some of them use what's called an EREIT
where they take all the money and pool it together
and then put that money into a pool of properties.
So you're not necessarily investing
in any one specific property
and then others will actually require you
to be in an accredited investor.
So, essentially, you have to have
a certain minimum level of income per year
or you have to have a certain minimum of net worth.
And then once you're an accredited investor,
you can invest your money,
usually in increments of $5,000 or $10,000
or higher into a specific property
and that's how Equity Multiple works.
And Equity Multiple is actually
one of the newer players in the market.
They haven't been around a long time.
I think they did their first deal
back in like September of 2015
and to date, at the time of this recording,
I believe they've funded a couple dozen deals.
And they almost always have one available
for their investors to put their money into.
Now the properties are reviewed,
very much in the same way that a bank would review deals
before they extend money in a commercial loan,
it's just that it allows you as the investor
to get in on it and invest your money
and make the income from that investment.
So, as you can see, this is their website.
If you wanna get started and sign up as an investor
all you gotta do is obviously go here to get started.
And then you're gonna see this is like
an exclusive invitation from the RETipster blog
so this is an affiliate link.
I've actually already got an account
so I'm just gonna go ahead and sign in and poke around
and show you what this website's all about.
So once you sign in to you account,
it's gonna look something like this
and I have not invested anything yet
so that's why you don't see
a whole lot of information here.
But I just wanted to sort of poke around
and show you some of the different
information and investments you can get involved with
if that's something you wanna do.
You can go over here to invest
if you wanna look at some of the deals
that are on the market right now.
And this one right here,
it's a luxury condo conversion in West Hollywood.
I was actually just looking at this last week
and it looks like it's closed out right now
because they've got more than enough money
to fund the whole project.
But let's just take a quick look at this,
just to kind of see what information's available.
And as you can see, it's a really beautiful website.
It's very informative, there's lots of pictures,
gives you a lot of data and just a lot of information
about what the project entails,
the projected internal rate of return,
projected annual return,
a really good investment summary
and more pictures there,
investment timeline.
This just kinda shows how long the deal's gonna last
and when investors can expect to get their money back.
Some of the highlights here just shows
some of the notable things
about the project and the location
and just the rental income that it's expected to generate
and some of the comps out there.
Sponsor overview, this is the entity
that's actually doing the project
so you can kind of get more of the story
behind the person who is getting this money
and doing a project with it.
Financials, there's a lot of really good information here.
You can see some nice charts and explanations
that show where your money is going
and how that fits in to the overall project.
There's a projected distribution schedule
which just explains approximately when the returns
are gonna come back to investors.
And keep in mind, none of this stuff is guaranteed,
as with any investment there's always risk
that things may not pan out exactly as planned
so you should totally bare that in mind.
If you ever decide to use anything like this,
there's just no way of knowing for sure
how it's all gonna turn out.
But that's part of the reason for this data,
is to help support the assumptions that are made
at the top of this page.
So there's a property location and location overview,
and then property overview and the unit breakdown
so you can really understand
what this property's all about
and what's goin' on there.
You can get a better look at the
overall market and what's happening there
and then comparables in the area.
So it's really just a very informative platform
that gives a lot of detailed, helpful information.
You can take a look at some of these
past deals down here that are closed and funded
and just kind of get a better look
at how those have worked in the past.
Really provides a lot of the same
standard information for all these deals
that just detail the total amount
that their seeking for Equity Multiple to fund
and also the total size of the project all together.
So really, Equity Multiple is just one piece
of the overall pie.
And then explains the length of the term,
the projected annual return,
the number of units in the portfolio,
investment summary, pictures, highlights, sponsor overview.
And you'll also find, throughout this entire thing,
if you ever wanna learn more, you can click on this
and see even more information about
the actual financials and what pro-forma looks like
and some of the assumptions down here.
And I can just tell you, from my nearly 10 years
I spent in the banking business being an underwriter,
I can tell you this really is what banks look at
in order to make informed decisions
on whether or not to move forward with projects.
So it's pretty evident to me
that these guys have their stuff together
and they know what they're doing
and that's why I just wanted
to put this video together to let you know,
if you're someone who has money
and you know you wanna invest in real estate
but you don't necessarily wanna do all of that
hands-on drudgery yourself,
this could totally be a worth while option to look at
just because they provide the platform
and they make it very easy to get involved
and make an informed decision.
All you have to do is come to the table
with your chunk of money
and invest it into the project.
Something else worth noting is that
you can also use Equity Multiple to raise capital.
So say if you are a real estate investor or developer
and you're lookin' at some huge commercial project,
you can go over here
to the Raise Capital section of the website
and enter in your information
and explore the possibility of getting
funding for your deal as well.
Personally, that's not something
I'm ever really interested in doing myself.
I'm more looking at the investing side
of putting money into the deal,
but if you're coming from a different perspective,
just keep that in mind,
this option's available as well.
In terms of the timeline horizon,
if you ever did invest money into one of these projects,
I can say that for debt deals,
the timeline is generally somewhere in the range of
six to 12 months until the principle is repaid
a long with the loans repayment
and preferred equity deals,
it typically takes about one to three years
to get your money back
and then with the common equity deals,
there's a bit more variety
depending on the sponsors business plan
and how the project is supposed to look.
For ground up development,
all principle and profits would be paid upon the sale
which usually takes about two to four years.
They don't have too many ground up projects because
the lack of cash flow that comes with those
makes them a little bit less appealing
but a lot of the deals have project plans
that are refinance projected
so it's gonna return most or all the investors capital
and most of them involve some cash flow
throughout the term of the deal.
In terms of when you get paid
as an investor throughout this process,
for debt and preferred equity deals,
the payments are typically monthly
and most of the equity deals
do involve some kind of cash flow
throughout most or all of the term, paid quarterly.
And again, it kinda depends on the specifics of the project
but they do favor stabilized cash flowing assets.
So that's something they definitely shoot for
in the deals that they present to you.
The average investor invests somewhere in the range
of like $25 grand per deal
but usually you can invest as little as $5,000
or sometimes $10,000 depending on the project.
But anyway, that kind of sums it up for
just all the basics of Equity Multiple.
Again, I just wanted to throw this out there
for anybody who is looking to
invest money in real estate the easy way
without doing all of the hard hands-on labor,
this could totally be a viable way to do that.
And again, you can check out the link
beneath this video if you wanna learn more.
I'm also gonna have a more detailed write up,
including a lot more information about
what their underwriters look at
when they're evaluating deals
and just some other helpful stuff
that you might find interesting
if you wanna learn more about these guys.
That's it, I just wanted to run that past you.
If you haven't heard of these guys,
be sure to check 'em out and thanks for watching.
And hopefully I'll see you again on the next video.