An Eye on Institutional Real Estate with Geoff Dohrmann at IREI

It really is possible to predict the future by looking at the past and in my conversation with Geoff Dohrmann, Executive Chairman & CEO at Institutional Real Estate Inc you’ll learn how to predict that, as big as it has grown over the last few years, crowdfunding is still just in its earliest innings.

Keep an ear out for Geoff’s observation that institutional investors know how to tell what macro-shifts are occurring by watching for trends ‘on the peripheries’ – and how real estate crowdfunding is showing up on the biggest institutional radars.

All in this week’s podcast here.

And now… regular updates and commentary follow.

We’re heading into the last week of September, the leaves are changing, and school is starting back up across the country. And as always, we’ve got several must-read real estate crowdfunding stories for your reading pleasure, including new deals from CrowdStreet, RealtyMogul, and AcreTrader. We’ve also got several new developments in the real estate crowdfunding space- including a major change over at Lendinghome, as well as new SEC charges for funding portland TruCrowd. Let’s get into it.

New Crowdfunding Platform Deals

It’s been a productive week for new crowdfunding platform deals, with several new offerings from most of the major crowdfunding outfits- we’ll cover some of the most promising.

CrowdStreet’s new Houston-based offering, City Vista, is now open for investment. This project is a 404-unit, Class A multifamily property in one of the most desirable (and affluent) and walkable neighborhoods in Houston, with excellent access to amenities and employment centers. The plan for the property includes a full revamp to bring it up to par with new product within that submarket, while still being able to reduce vacancy through discounted rental rates.

City Vista has a targeted investor IRR of 14.2%, a targeted equity multiple of 1.9x, a targeted average cash yield of 4.4%, and a targeted investment period of 5 years. To learn more about the Montrose, Houston-based property, or to invest now, head over to CrowdStreet, here.

RealtyMogul also launched a Texas-based opportunity last week, the FreeUp Storage DFW Portfolio, a portfolio of several self-storage properties. This investment includes 18 locations of NCC (non-climate controlled) and CC (climate-controlled) self-storage spread over more than 5,000 units in the DFW area and East Texas. The FreeUp Storage Portfolio has a target IRR of 15.6%, a targeted cash on cash of 7.1%, and a target equity multiple of 1.89x. Learn more or invest now at RealtyMogul, here.

Finally, we’ve got something a little different in store- a productive farmland investment on AcreTrader, not for a farm in Kansas or Ohio- but all the way across the world in Queensland, Australia. The Burnett River Citrus Orchards project consists of several citrus orchards in and around Gayndah and the North Burnett Region of Queensland, Australia. They total 862 acres, with 324 of those acres being productive farmland that can grow several varieties of citrus, including Imperial, Murcott, and Tangold variety mandarins, as well as grapefruit, oranges, and lemons.

On Wednesday, Sep 22, AcreTrader’s CFO Garrott McClintock and Business Development Manager Drew Lipke will hold an informational webinar for the Australian deal- and don’t worry, if you can’t make it they will post a copy which you can watch at your leisure. Check out the webinar signup here.

General Crowdfunding Industry News

Often lost in the noise is the profound ability of real estate crowdfunding to create positive outcomes for communities. This is why we try to highlight some of those stories each week. This week, in light of the several Texas-based deals we covered, we want to shine a spotlight on the “Buy-the-block” movement growing in Houston’s historically Black neighborhoods. This article in the Houston Chronicle covers the efforts of Matasha Laquinn, a top local real estate agent, and other members of local real estate investing club “Society 23” to use crowdfunding to gain ownership and its myriads for the communities in which they live.

Members of this club are attempting to “flip the script” on the gentrification happening in many urban Black and Latinx neighborhoods, to turn it from a force for displacement into a force for bettering the community and creating minority wealth through real estate investing. It’s a great read, so head over to the Houston Chronicle to get the full story.

Crowdfunding Platform Updates

With Chinese RE firm Evergrande’s spectacular collapse dominating the financial news cycle, we wanted to cover a similar, albeit smaller-in-scale story in the real estate crowdfunding world. As reported by Crowdfund Insider, funding portal Trucrowd and three issuers have been leveled with charges by the SEC, alleging fraud concerning more than $2 million in unregistered securities offered via two regulation crowdfunding offerings.

According to Crowdfund Insider, this is the first significant enforcement action relating to a FINRA regulated funding portal, an intermediary created as a result of the 2012 JOBS Act which opened the doors for many modern crowdfunding outfits. The SEC complaint lays out the charges, alleging that Robert Shumake, along with associates Willard Jackson and Nicole Birch conducted unregistered, fraudulent crowdfunding offerings through two cannabis-based RE companies- Transatlantic Real Estate LLC and 420 Real Estate LLC. Additionally, the aforementioned individuals allegedly diverted investor funds for their personal use rather than using the funds for the purpose disclosed to investors.

Read up on the latest real estate crowdfunding scandal, here.

That’s all we’ve got for this week- but don’t worry- we’ll be back for September’s final issue of the GowerCrowd Real Estate Crowdfunding Newsletter next week! See you then.