How will the pullback in SFH impact real estate crowdfunding?

Welcome to the final November issue of “The GowerCrowd Real Estate Crowdfunding Newsletter.” 

We’ve got a lot in store for you this week, including a Short Term, Yield Focused Offering on AcreTrader, and a New Multifamily Property Acquired Off-Market in High-Demand Location – Three Miles from Texas Medical Center on RealtyMogul. 

After that, we’ll look at a report from Benzinga about the phenomenon of Institutional Investors Now Shedding Single-Family Home Rentals and an update from Fundrise that answers 3 of the most important questions asked by Fundrise investors. 

We’ll finish things off with a look at the latest episode of The Real Estate Crowdfunding Show, where Dr. Gower interviews Harold Hofer – Co-founder & CEO, Elevate.money.

Let’s get into it.

New Crowdfunding Platform Deals

The Stockton Farm in San Joaquin County, CA, is a Short Term, Yield Focused Offering hosted by AcreTrader. The farm itself has 241 acres of wheat, tomatoes, and alfalfa, with secure water rights and an expert farm sponsor- Delta Farm Management. This farm sponsor has previously worked with AcreTrader on an almond development project in the same region. 

The Stockton Farm currently has a minimum investment of $19,624, with a total farm price of $4,304,792. It goes live on Tuesday, November 29 at 1 pm Central on AcreTrader.

Up next is The Regard at Medical Center at RealtyMogul. This project is a 319-unit Class A mid-rise apartment property built in 2013. It sits 3 miles away from the world’s largest medical center- the Texas Medical Center. This deal presents an attractive opportunity to acquire a well-maintained asset in a high-growth area- all for well below replacement cost. 

Compared to similar projects in the area, construction costs are close to 300k+ a unit, representing a 40% premium over similar units acquired via The Regard. It has a target IRR of 229.%, a target average cash on cash of 5.5%, and a target equity multiple of 1.55x. The Regard at Medical Center is currently available for pledges at RealtyMogul, here.

General Crowdfunding Industry News

In a sure sign of the times, institutional investors are shedding single-family homes, according to a new report from Benzinga. Nationwide, profit margins on median-priced SFH and condos decreased from 57.6% in Q2 to 54.6% in Q3- showing a decline for the first time in almost three years. At the same time, the average monthly rent in the US surpassed $2,000 for the first time, rising 15% year over year to hit a record high of $2,002. 

Real estate crowdfunding platform ArborCrowd recently announced they expect more institutional investment in both build-to-rent and single-family properties due to high investor demand for resilient assets and the ease of acquiring new properties- like through a real estate crowdfunding deal. Get the rest of the scoop on Benzinga here.

Crowdfunding Platform Updates

Fundrise recently released a discussion with Kendall Davis, head of investor relations and investor operations, and Fundrise CEO Ben Miller. They discuss a variety of topics that are fresh on investors’ minds, including the steps Fundrise has taken to mitigate losses during a potential downturn, how the platform performed prior to 2017, and whether Fundrise has third-party audits and reviews performed on its balance sheets. 

Learn more directly from the team making it happen at Fundrise here.

Multimedia Links (Videos, Podcasts, etc.)

Finishing off, let us take a look at the latest episode of The Real Estate Crowdfunding Show, Harold Hofer – Co-founder & CEO, Elevate.money. In this week’s episode, Harold Hofer discusses his new crowdfunding platform, Elevate.money, and how it is geared to attracting both accredited and non-accredited investors. 

Hofer is no stranger to the world of real estate crowdfunding. He co-founded the CF platform Rich Uncles and was featured in Dr. Gower’s book: Leaders of the Crowd as one of the first early adopters in the crowdfunding space.

Check out this week’s episode to learn more about Harold, how he grew his success, why he wants to connect with Millenials, and how TikTok has become a force for good in commercial real estate capital formation. 

Listen for yourself here.

That’s it for now- but we will be back next week with all of your favorite real estate crowdfunding news stories, new deals, podcasts, and more. Ciao!