EquityMultiple Review – Learn How This Real Estate Crowdfunding Platform Works

EquityMultiple Review – Learn How This Real Estate Crowdfunding Platform Works


– 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.

3 thoughts on “EquityMultiple Review – Learn How This Real Estate Crowdfunding Platform Works

  1. You did Fundrise and now EquityMultiple… Is a comparison video coming soon?

  2. can we invest from other countries?
    I'm from Nigeria

  3. Is this like an REIT?

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