The term “commercial real estate” describes a wide range of real estate assets whose purpose is to profit from rental income, rising prices, or both.As an asset class, commercial real estate (CRE) has a long-term record of delivering impressive returns, making it an attractive investment choice.Even so, there are a variety of investment options in the asset class, and even the most experienced real estate investors are confused or confused when trying to choose an investment option.
In an active investment, investors play a direct role in property selection, acquisition, due diligence, financing, leasing and management.In many cases, the decisions they make in these milestones will directly affect the success rate, profitability and cash flow of real estate investments.Active investment requires a lot of time and operational expertise to be profitable.Not all individuals looking to invest in commercial real estate have all these attributes, so passive investment may be a better option.
In passive investments, investors delegate funds to third-party managers, such as us, and outsource property selection, acquisitions, due diligence, leasing and property management tasks to the entity.With this strategy, investors can get all the benefits of commercial real estate ownership (such as passive income) without spending time and energy directly operating it.Passive investment may be the best option for many people who work in W-2 and want to save or invest in retirement.For those who choose this route, the next logical decision is which manager will entrust their funds.
EquityMultiple is a well-known commercial real estate crowdsourcing platform, and their experienced real estate expert team carefully evaluates potential transactions to ensure that you only invest in the highest quality real estate available.Established in 2002, EquityMultiple is an online real estate investment crowdsourcing platform dedicated to raising investment funds, supported by Mission Capital, a leading technology real estate capital market company.
When you invest through EquityMultiple, you are investing in commercial real estate.Unlike many real estate crowdsourcing platforms, the latter may invest in smaller projects, such as single-family residential properties such as fixed-family rentals, while EquityMultiple invests primarily in larger transactions.For example, a typical real estate project would be between $500,000 and $2 million.As an investor, you can purchase incremental investments in these transactions.
In order to participate, you must be a qualified investor.This means that you must qualify based on income and assets.Naturally, qualified investors are at the high end of their wealth scale.This is because investment in commercial real estate is often high risk.Best for those who are familiar with such investments and have the financial strength to withstand losses.To invest, you must be a qualified investor (at least $1 million in net assets or $200,000 a year).The minimum amount of $10,000 per investment (although it may vary depending on the list), allows you to make multiple investments at once rather than investing a large amount of money in one investment.
The syndicate debt is supported by companies with a long history of real estate investment.Many other online investment sites, such as Fundrise, are direct credits in all transactions.This means you will take risks with other fully amateur investors.On the other hand, EquityMultiple also offers transactions that are partially supported by experienced real estate investors.
Preferred stock transactions do not involve large business partners, but consist entirely of individual investors.But these transactions tend to be more valuable than syndicated debt transactions.EquityMultiple expects returns of 10-14%, not 7-12%.With fixed monthly or quarterly returns, transactions remain short-term investments, typically between one and three years.
These investments are the riskiest (you are the last to recover your initial investment) and take the longest time, but with the best return.Equity investments typically last from three to seven years with returns of 14% or more.