EQUITYMULTIPLE Review | Best Real Estate Platform For Accredited Investors? #Best Education Page #Online Earning

- So in this video today, we are going to be doing

a review of the Equity Multiple

crowdfunded real estate investing platform.

So over the last year and a 1/2 of so,

I've been reviewing a lot of these different platforms

and studying them and writing about them

over on my blog, known as Investing Simple.

And we have a pretty comprehensive article over there

on the top nine best crowdfunded real estate platforms

available right now in 2020.

And Equity Multiple is one that has made our list.

If you wanna check out that full list,

that's gonna be down in the description below.

Now equity multiple is essentially

a crowdfunded real estate platform

that gives accredited investors access

to institutional quality, commercial real estate deals.

So that is the very first thing

that we have to make clear here about this platform

is that this is a platform for accredited investors only.

If you guys are not familiar with what that means,

I will put up the requirements

on the screen right now.

So you have to meet these qualifications

in order to be an accredited investor.

So many of these real estate platforms

offered you the option to invest in what is called

a private placement, which is

an individual real estate property

rather than a portfolio of different properties.

And the SEC has determined that these investments

are higher risk and higher potential return,

but as a result, the average retail investor

should not be investing in them.

So because this is a higher risk

and higher potential return investment,

the SEC has restricted it to accredited investors only.

Now there is a link in the description below,

if you guys do decide to sign up for Equity Multiple.

It is an affiliate link, so if you do use it,

I may earn a small commission in the process.

Totally optional on your end, but it is a way

to give back to me for putting this video

together for you.

So a lot of these different crowdfunded real estate

platforms out there are pretty new

because this has only been a legal form

of raising capital since 2012.

So you're looking a lot of these platforms out there

like Fundrise or Realty Mogul or Rich Uncles

and you may notice that they dot have a long track record

or operating history.

Well that is one of the benefits here

of investing with Equity Multiple, and that is the fact

that they are actually backed by a leading,

national real estate firm known as Mission Capital,

which has been around since 2002.

So while a lot of these platforms

don't have a lot of track record,

and operating history in this business,

Equity Multiple is backed by a company

that does have track record and does have

some skin in the game here and a good amount

of operating history.

So if you're looking at the Equity Multiple platform,

you will see an array of different properties

that you can invest in.

But just how do those properties end up on that website.

Let's go ahead and answer that now.

So this is how the process works for properties

that are listed on Equity Multiple.

First of all, trusted partners are going to source

investment opportunities and essentially put these

in front of the Equity Multiple team.

The next step is that the Equity Multiple team

is going to vet the properties as well

as the local real estate market

where that property is located.

After that, they are going to stress test the properties

under a variety of conditions and what they say

on their website is that less than 5% of the properties

they look at are actually accepted

and then available on their platform.

And then the 5% of properties that are accepted

are then listed on the platform and available to investors.

Now as far as the different real estate offered

on Equity Multiple, they say they have

three different types available to investors

and each have a different risk and reward profile.

The first type is equity, which has a higher upside

but also has a higher risk.

So unlike debt investors,

you have an uncapped potential upside.

So if this property double in value,

your investment could double in value as well.

Whereas a debt investor doesn't have any potential upside

with that investment because they simply earn the interest

from that loan, whether it be a fixed rate

or a variable rate.

However the downside to this is that the equity investors

are going to be the last to get paid

in any kind of liquidation situation.

So that is the advantage that debt investors have

is that they are first to get paid

if they have that first lean position on the mortgage.

So because of that higher potential return,

it also has the highest risk as well,

which does suit some investors.

But maybe somebody who's a little bit older

may not be looking for that type of risk in their portfolio.

The second type of deal on the platform

is called preferred equity and these investors

are paid before equity investors and project sponsors,

giving you more downside protection.

So if there was some kind of liquidation

situation that occurred, preferred equity

is going to be paid before deal sponsors

or regular equity investors,

giving you some level of protection there,

as far as what would happen in a worst case scenario.

Now as a preferred equity investor,

you do get fixed monthly or quarterly returns,

as well a fixed portion of the project upside.

So you won't get all the upside that you would

as a regular equity investor.

You will get some of that upside,

but you will also have some downside protection

because you are further ahead in line

than the deal sponsors and regular equity investors

in terms of who is getting paid first.

And then the final type of deal on the platform

is called syndicated debt,

which has the most downside protection.

And because it is the safest investment,

it is going to be a lower potential return.

So each loan that you invest is going to be

a first lean loan, which means you are first in line

to get paid in a liquidation-type situation,

if that were to arise.

However, since this is a debt investment

and you are not an equity owner in the property,

you do not have any of the potential upside,

in terms of asset appreciation.

So if the building doubled in value,

it doesn't matter as a debt investor

because you are just getting that fixed or variable interest

as the banker for that project.

So now let's cover a few other things

that you should know about

the Equity Multiple investing platform.

First of all, the minimum investment to get started

is going to be $5000.

The next thing you may want to know

is what is the fee structure like for Equity Multiple?

Well most of these platforms charge an annual

asset management fee of around 1%.

Now Equity Multiple actually charges a much lower fee

of just 0.5%.

However, they also receive 10%

of the investor profits as well.

So some people are a fan of this type of structure

because in this sense, Equity Multiple and your goals

are aligned, which is essentially to make money.

So overall, Equity Multiple seems

like a pretty solid platform out there

for accredited investors looking to invest

in high quality real estate deals.

And I really like the fact that they are backed

by Mission Capital, which has,

you know, over a decade and a 1/2 of experience

in the real estate industry.

And this is not something we've seen with many

other crowdfunded platforms out there

because these are newly formed companies.

It's also great that they offer a variety

of different deals on the platform,

that are going to suit different risk appetites.

So if you are looking for a high risk, higher return,

you have equity investments.

If you're looking for lower risk, lower return,

they offer debt investments as well,

and projects in between.

So there's a variety of different options

that you have available to you.

One thing to keep in is that although that fee

is lower than most other platforms out there,

they do also get 10% of all of the profits

they earn for investors, so you may or may not

be a fan of that fee structure.

And then of course, there are a few things

that you should understand about any crowdfunded

real estate platform, before you invest.

First of all you should understand that these are rather

liquid investments and that liquidity is not guaranteed.

If you're looking for

a highly liquid real estate investment,

you should stick to your publicly traded REITs.

However, these private investments often have

a number of different advantages,

and in many cases, they often have higher returns

than these publicly traded REITs.

But you do have to understand

that as an investor, liquidity is not guaranteed.

And you should be willing to stick around

for the entire duration of that investment.

And in most cases, that's going to be about

a five year time horizon.

However, it may be a shorter time horizon,

if this is a strictly debt investment.

So if you wanna learn more about equity multiple,

the link is down in the description below.

And you guys can learn more and see if this platform

is a good fit for you.

But thanks so much for watching this video,

I hope you enjoyed it and I will see you in the next one.

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