Real estate may be one of the greatest wealth builders of all time, but the amount of capital needed to invest in this asset class has left it out of reach for most people.
This high barrier to entry has helped an entire industry thrive around the concept of "no money down" real estate investing. Millions of books, courses and coaching programs have been sold to aspiring investors looking for a way around the large capital requirements of real estate investing.
Unfortunately, most of these people eventually realize that the concept of “no money down” investing isn't feasible in most cases. Now, with home prices at record-high levels, buying an investment property is even further out of reach for many investors.
However, the rise of fractional ownership is creating an alternative path for investors to build a real estate portfolio with as little as $100.
Changes in securities regulations have opened up the private markets to non-accredited investors, making fractionalized investing an easy way to become a landlord.
Buying Shares of Rental Properties
Rental properties are one of the most popular types of real estate investments, and for good reasons. They’re one of the most inflation-resistant investments available and they will probably always be in high demand.
Arrived Homes is a pioneer in the fractional rental property market. The company acquires homes in some of the fastest-growing cities across the country and allows individual investors to purchase shares of these properties through its online platform.
The company takes care of all the management responsibilities while investors collect their share of the cash flow from the rental income and wait for the properties to appreciate in value.
Properties typically have a target hold period of five to seven years, at which point Arrived Homes sells the property and distributes the profits from the sale to the investors.
The company launched just last year after getting seed investments from some high-profile investors like Amazon.com Inc (NASDAQ: AMZN) founder Jeff Bezos through his Bezos Expeditions fund and Salesforce.com Inc (NYSE: CRM) founder Marc Benioff through Time Ventures.
So far, the platform has fully funded 88 rental properties, with a total value of about $35 million. The demand from investors has been so high that property shares sell out within 9 1/2 hours, on average, with the quickest selling out in only 17 minutes.
View details on the Arrived Homes platform and current offerings on Benzinga Alternative Investments.
While fractional investing may not be your ultimate goal, it's an excellent way to build a portfolio that you can grow into your own real estate empire over time.
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