Crowdfunding an Iconic Santa Monica Hotel.

Kicking off this week’s news updates are some save-the-date announcements as follows:

  • March 2nd – Webinar
    • The first in our brand new Special Webinar series will be co-sponsored by Dr. Jeff Anzalone (the Debt Free Doctor) and Kris Benson, CIO at Reliant Real Estate Management, is titled ’10 Reasons EVERY Doctor Should Have Self-Storage in Their Portfolio.’
  • March 7-12th – Bootcamp (with special early bird discount)
    • Check out the free training on this page but only sign up for the Bootcamp if you are really motivated and not afraid of some hard work!
  • April 5th – 10 Year Anniversary Webinar
    • We are hosting a webinar with the founders and CEO’s of all the major crowdfunding platforms to commemorate the 10th anniversary of the JOBS Act of 2012.

New Crowdfunding Platform Deals

We’ll start off on the historic Santa Monica Pier, where The Georgian Hotel, a local mainstay hospitality property is now up for redevelopment. The property, listed on CrowdStreet, is known as “Santa Monica’s First Lady” and is one of the most iconic properties in the Los Angeles Metro area. It sits on world-famous Ocean Avenue, just a short walk away from downtown Santa Monica, Ocean Avenue, and the Third Street Promenade. 

This hospitality property has a targeted investor IRR of 20%, a targeted equity multiple of 2.3x, a targeted average cash yield of 8.5%, and a targeted investment period of 5 years. Check it out on CrowdStreet, here.

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Next, we’re going to take a look at the Wolf Creek Farm, a 229-acre corn and soybean farm that sits in Sangamon County, Illinois, just 5 miles away from the state’s capital city, Springfield. The county itself is one of the more productive farm counties in the country, with almost 500,000 acres of productive cropland, mostly in corn and soybeans. The Wolf Creek Farm itself has spent the last 5 years in a consistent corn and soybean rotation, which helps to reduce the leaching of soil nutrients and leads to lower fertilizer and pesticide inputs.

The property itself is comprised of three contiguous parcels, 90% of which are tillable and rentable acreage. The total farm price is $2,465,253 and includes 228.9 acres, with a price per acre of $10,770. This deal has an estimated ownership duration of 5-10 years, a gross cash yield of 3.1%, a net cash yield of 2%, and a net annual return of 7.9%. See it for yourself at AcreTrader, here.

General Crowdfunding Industry News

In a development that should not be too surprising to anyone following the crypto space, another crypto-coin based real estate scam has been uncovered. The people behind Realux recently disappeared after soliciting investments in their digital token via sponsorships with social media influencers. The firm claimed that it was focusing on making real estate more open and accessible to all investors, primarily by using digital tokens backed by real property investments. 

They also announced their intentions to address wealth inequality by getting rid of barriers, middleman fees, and other restrictions that keep lower-income individuals from accessing the wealth generation potential of real estate. However, the coin offering appears to be what is known as a “rug pull” in the crypto world- where the creator(s) of a coin generate a lot of hype around a particular coin before dumping all of their shares and disappearing. As of February 3rd, Realux’s official website, Twitter account, and Telegram channel were taken down after a precipitous drop in the value of the coin. Learn more at Crowdfund Insider, here

There are new developments In a case we’ve covered before on GowerCrowd, and in this newsletter. On January 28th a Michigan federal court entered bifurcated judgments against 420 Real Estate LLC and its CEO Willard Jackson. The firm was accused of looting investor funds for the benefit of its principals, including Jackson. 

On January 28th, 420 Real Estate and Jackson consented to be permanently blocked from violating certain security laws but did not deny or admit to the allegations by the SEC. This settlement brings this long-standing real estate crowdfunding fraud case to a close- you can read more at Law360, here.

Crowdfunding Platform Updates

We’ll finish off with a platform update from Fundrise.

Fundrise recently announced the investment of nearly $6 million in investor capital into the construction of the Mason Palm Bay, a 252-unit multifamily apartment property in Palm Bay, Florida. The project, which sits along Florida’s Atlantic Coast, is roughly an hour from Orlando and presents a prime opportunity for investors looking to gain exposure to the hot Florida real estate scene. 

The Mason Palm Bay investment aligns with the firm’s long-term Sunbelt apartment and rental housing thesis, which aims to take advantage of phenomenal growth with the Sunbelt. The firm aims to create an attractive income stream through the financing and creation of housing in this region. Fundrise’s investment in the Mason Palm Bay is structured as preferred equity, and the firm is entitled to an annual return equivalent of roughly 10% over the life of the investment. 

Read more at Fundrise, here

That’s everything for this week- but we’ll see you next time with more crowdfunding deals, news stories, platform updates, and more.

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