Introducing the $100k Giveaway
Sharestates is excited to announce that we have originated over $1,000,000,000 in real estate loans! To celebrate, each new registered (and verified) accredited investor on the Sharestates platform will be entered to win $100,000 in Sharestates investment credits! To increase your chances of winning, refer your friends to Sharestates and receive three entries for every new verified accredited investor in your network.
To learn more about the 100k giveaway, and enter to win, click here.
Sharestates was founded with the mission of bringing Wall Street quality deals to Main Street investors. Individual accredited investors can access a large marketplace of short-term loans for real estate investment properties while investing alongside billion-dollar institutional investors. Each loan goes through our 34-point underwriting process and has projected net returns that range from 8-11%. There are no annual fees, and investors receive monthly interest payments.
Sharestates Real Estate Loan Performance
Sharestates is now one of the Nation’s largest private real estate lenders to date. The company has closed over $1 billion in real estate loans since its 2015 launch. Sharestates investors have received $358 million in returned principal investment from over 495 individual loans and have lost $0 of their principal investments. Click here for the latest performance statistics.
Sharestates loans range across asset type and capital stack position. The company is licensed to lend in 45 states offering investors an opportunity to diversify investments. To view all open investment opportunities, click here.
Professions such as a doctor, lawyer, entreprenur etc. is very time consuming. In a life mainly consisting of work, it is hard to find time to gear ones energy towards another interest such as investing in real estate. This is where Real Estate Crowdfunding (RECF) and marketplace lending comes in. RECF and marketplace lending has reshaped the way people find and invest in properties. Crowdfunding has opened a whole new door of accessibility to projects and real estate offerings. The option to invest from the comfort of ones home from a laptop or tablet is easy and reliable.
Real Estate Crowdfunding for Investors
According to a Sharestates Investor, Dr. Chirag Amin “As a busy physician that works over 50 hours per week, I am very interested in investing and having my money work for me. In the past, I have purchased real estate for rental income, but have been discouraged by the sheer hassle of dealing with issues regarding property maintenance and repair costs, property taxes, difficult tenants, as well as tenant turnover issues (just to name a few). I totally embrace the crowdfunding concept, as it allows me to diversify my investments over several properties and earn a high yield/return on investments without having to worry about dealing with tenants and property maintenance issues. In addition, the risk rating system on the Sharestates website provides me with increased investing confidence compared to other platforms.
Investing with Sharestates
At Sharestates we provide investors an online path to consistent passive income. On our secure online platform you can select the geography and even asset class of the properties that fit your portfolio and risk tolerance. Investors have access to a large marketplace of institutional quality mortgage loans which have been underwritten by industry leaders.
Sharestates also offers features such as auto-invest which is a tool that will manage your investment strategy. With auto-invest you can set specific parameters to match the criteria you are interested in.
Let Sharestates help you build your real estate portfolio one share at a time!
In 1994 Bill Gates said one of the most visionary statements of the last century. “Banking is necessary, banks are not.” So long before crowdfunding became a term there was a necessity for crowdfunding and marketplace lending (MPL).
Marketplace lending (MPL) is an alternative method for loan borrowers, hard money lenders, and venture funders to bypass other financial institutions. Therefore, institutions such as banks and mortgage companies are eliminated in the funding process.
Why should marketplace lending be your next asset class? Here are a few points from the white paper below.
Why Marketplace Lending is Popular Among Investors and Borrowers
1. Investors and borrowers searched for a new asset class to invest in real estate and diversify their investment portfolios since the recession of 2008. Marketplace lending, specifically crowdfunding offers this new asset class. It entails more security, greater transparency, and higher potential returns per investment vehicle.
2. Real estate marketplace lending is a niche within equity-based crowdfunding. It allows investors a way to earn monthly dividends by funding the project of other investors. Furthermore, these platforms provide borrowers access to much needed money for purchasing property, funding rehab, and paying for other maintenance and management fees.
3. Also, MPL platforms perform due diligence on the real estate loan borrower. The borrower is vetted on their track record, experience, credit score, and personal guarantee. The success rate of the borrower on managing various types of projects, a high credit score rating, and if the borrower can personally guarantee the loan with other assets, are signs of potential return against risk.
4. In addition, the investment property goes through an underwriting process. The investment property is evaluated by its loan-to-value, lien position, location, occupancy, and development phase. As a result, these factors total a risk rating for the real estate investment.
These are just a few points as to why MPL should be the next asset class of every savvy investor, that wants to invest in real estate, and diversify their portfolio.
The marketplace lending vertical is growing and catching the attention of different generations. Millennials are 10% more likely to use marketplace lending platforms versus the aging Baby Boomers.
As part of our commitment to create the best experience for our users, Sharestates has released an Auto-Invest tool. The tool seeks to minimize the risk for “cash drag” which occurs when an investor misses out on new investment opportunities, because they were not able to login, review, and invest before the loan sold out.
How Auto-Invest Works
Auto-Invest allows investors to have control of the frequency by which investments are made. Investors can now increase or decrease how often their funds are deployed. Auto-Invest gives investors the tools to automatically fund investment opportunities based on established criteria. This means investors have a unique opportunity to invest as soon as a project is made available on the Sharestates platform, with specific terms, and parameters, selected specifically by the investor. Sharestates’ investors can choose from multiple strategies, including a custom investment strategy that includes 12 underwriting filters to choose from. The Auto-Invest tool has adjustable measurements including investment totals per loan, maximum investment frequency and limit, interest rate requirements, risk ratings, property types and more.
After every auto-investment transaction, the investor will receive a confirmation email with loan and investment details. To further increase usability for our investors, they will then have a 24 hour window from the time the transaction was made, to opt out or increase participation.
Allen Shayanfekr, CEO and Co-Founder of Sharestates on Auto-Invest
“The Auto-Invest feature will help increase efficiency for investors as they grow their real estate portfolios. This new feature will alleviate the fear of missing out on real estate loans, while expediting the investment process and eliminating the constant scrolling and searching for the perfect property. We credit our continued success to constantly integrating new tools that make investing with us secure and easy.”
We look forward to helping each of our investors build their investment portfolios with ease.
Sharestates, is pleased to announce that we have surpassed an all time total of $500mm in real estate loan originations. This milestone continues to establish Sharestates as a leader in the online real estate investment marketplace vertical. The announcement is joined by the release of Sharestates’ new auto-invest tool, created to eliminate the chances of “cash drag” for our investors.
When asked about the news, CEO and Co-founder Allen Shayanfker states “The Auto-Invest feature will help increase efficiency for investors as they grow their real estate portfolios. This new feature will alleviate the fear of missing out on real estate loans, while expediting the investment process and eliminating the constant scrolling and searching for the perfect property. We credit our $500 million milestone to constantly integrating new tools that make investing with us secure and easy, granting peace of mind to our user base in allocating more funds to our platform.”
$500 Million in Real Estate Loan Originations
Since inception in 2014 Sharestates has originated over $500mm across 520 individual real estate loans. Current run rates have Sharestates exceeding $1 billion in total origination before the end of 2017.
The average net annual rate of return to investors is 10.62% with zero loss of principal.
Sharestates Auto-Invest Tool For Real Estate Investors
As a part of our commitment to create the best experience for our users, Sharestates has released an auto-invest tool. The tool seeks to minimize the risk for “cash drag” which occurs when an investor misses out on new investment opportunities because they were not able to login, review, and invest before the loan sold out.
Investors can now increase how often their funds are deployed. Sharestates’ investors can choose from multiple strategies, including a custom investment strategy that includes 12 underwriting filters to choose from. The auto-invest tool has adjustable measurements including investment totals per loan, maximum investment frequency and limit, interest rate requirements, risk ratings, property types and more.
After every auto-investment transaction, the investor will receive a confirmation email with loan and investment details, where they will then have a 24-hour window to opt out or increase participation.
To learn more about Sharestates, visit www.sharestates.com today.
Investing in rental housing in college towns is a tried-and-true strategy for some. But not all college towns are created equal. At least according to Allen Shayanfekr, CEO of Sharestates, an online real estate investment platform.
In college towns, the constant influx of students means investors have an ever-rotating pool of potential tenants. But, Shayanfekr said, the better college areas have a high walkability rate, giving students the ability to get to stores, parks and social hot spots without using a car.
Sharestates evaluated the largest university communities in the U.S. to determine the top five neighborhoods where median home prices far trailed the dynamics of the college community in which they are located, giving investors the best return on their rental housing investment.
Rental Housing Investing in College Towns
1. John Hopkins University
The median home price in this Baltimore college town is more than $65K below the national median price of homes, and many homes around the university average three bedrooms and two bathrooms, Shayanfekr said, and are in the Charles Village neighborhood, where many restaurants and other amenities are in walking distance.
2. University of Notre Dame
With the average university student saving some $386/month, the South Bend, Indiana, neighborhoods surrounding the university offer a great opportunity for investors to make inexpensive bets on real estate, given the median home price is $89,900, Shayanfekr said. That helps feed the retail around Notre Dame since students’ dollars stretch farther given the lower rents, he said.
3. Case Western Reserve University
With a median home price of $120,500 — nearly $76K below the national median — investors can grab three-bedroom houses in the neighborhoods of Coventry, North Coventry and Cedar-Fairmount, all three popular neighborhoods where Case Western students overwhelmingly reside because of the easy access to shopping, grocery stores and nightlife, Shayanfekr said.
4. University of Pennsylvania
While median housing prices in Philadelphia are higher than other college towns on this list, they are still below the national median at nearly $168K. But with rents averaging more than $1,200/month, investors have the potential to receive significant income from rental housing, Shayanfekr said. The most popular student neighborhoods include Point Breeze and Passyunk, given their walking distance to the campus.
5. Michigan State University
Downtown East Lansing is the big draw for students going to MSU. That is not only because of its proximity to the campus, but Downtown East Lansing is home to numerous bars and restaurants. It also is attractive for rental housing investors since median home prices list at $107K, Shayanfekr said.
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The real estate market can often come across as a black box of investing. Especially after the subprime mortgage crisis of 2007-2010, there has been a persisting level of wariness as it relates to real estate. Since that recession, real estate values have been on the rise, especially in metropolitan areas. One of the easiest tools to quickly evaluate and quantify return on investment (ROI) potential within the real estate sphere is to measure the capitalization rate, or cap rate. With the help of our friends at Short Term Rentals NYC, a short term rental agency, we help you break down cap rates, and how they work.
Capitalization Rate Defined
A cap rate is calculated based on the ratio between net operating income (NOI) and property asset value (the market value of buying or selling the property). To break it down even further, NOI is the value of the net rental rate, or operating expenses subtracted from actual income.
A quick simplification of this:
Capitalization Rate: Net Operating Income (NOI) Divided by Market Value of the Property
For example, you are an investor looking to purchase a building. The property of interest has an NOI of $120,000 and is being sold at an asking price of $1,600,000. Using the formula and dividing $120,000/$1,600,000 will yield a cap rate of 7.5%. As an investor, this translates to a 7.5% ROI for you.
Utilizing the Capitalization Rate
The basic function of a cap rate is to measure the potential ROI on any given real estate investment. It represents the risk associated with an investment: The higher the cap rate, the higher the risk, but also the higher the potential ROI. Inversely, a lower cap rate is indicative of lower investment risk, but accompanies a lower payout.
In order to quantify this risk premium, you can compare a cap rate to U.S. Treasury bonds, which are the basis of a risk-free investment. By subtracting the yield rate of these bonds from the cap rate, it reveals the risk premium associated with the investment. For example, if U.S. bonds are yielding at 4%, and a real estate property’s cap rate is 8%, the risk premium value is 4%. For a risk-averse person, this amount may not appear worth it for the chance of an 4% greater ROI than the steady payout from the bonds. However, for others, this is well worth the potential instability that arises from engaging in the market.
Cap rates also serve a predictive function. In one sense, investors are able to compare similar properties (location, price, etc.) and use the cap rate to differentiate between them in terms of higher-risk investments. If one building in a similar location with similar amenities has a much higher cap rate than another, an investor will wonder what the risk factors are associated with it that contribute to such a gap in the cap rate.
As a market forecasting tool, cap rates can be used to predict future value fluctuations. Given that cap rates decrease as property values increase, historical cap data can be referred to as an indicator of expected valuation trends.
Capitalization Rates In Practice
One way to understand cap rates even further is to take a historical perspective, and observe their fluctuations in accordance with real estate recessions and surges. In general, the lower the cap rate, the less risk associated with the property and the higher its market value. How it’s often interpreted at the higher level: The lower the cap rate, the healthier the real estate market, given that, this means property values are higher.
During the Great Recession previously mentioned from 2007-2010, home values were at an all-time low. Cap rates reflected this inversely: At the start of the recession, before the full impact was felt, capitalization rates for commercial properties were at a low of 6.73%. By the end of 2009, however, they had jumped to an average of 8.46%.
Though the real estate market has considerably improved since this time, the average retail cap rate as of Q4 2016 was 8.1%, indicating there is still considerable risk involved with this type of venture. Meanwhile, apartment cap rates averaged out at 5.8% at the end of Q4, 2016. This trend portrays the larger tendency for urban real estate investment to be far less risky than retail.
Even within the same market (commercial versus residential), there can be vast differentiation of cap rates based on perceived risks. For example, for a Class A commercial property in a central business district (CBD), the cap rate in Los Angeles was under 5%, while that in Memphis was almost 9%. The reason behind this is that the perceived operational and valuation risks in Memphis far exceed those in Los Angeles. However, for a risk-taking investor, Memphis can represent a huge ROI potential as a developing, vibrant metropolitan hub.
When Not to Use Cap Rates
Though capitalization rates fulfill the basic calculation of ROI and serve some predictive function, they cannot account for more complex cash flow processes. A cap rate should be used for quick valuations and to understand the real estate market fluctuations on a high level. For deeper understandings and to account for all variations of cash flow systems, you should conduct a comprehensive analysis.
With Brexit the world once again finds itself on the brink of financial upheaval. Never has real estate investing seemed more attractive. New York remains one of the top cities in the world to invest, and Sharestates’ online marketplace has made it easy for anyone to start and build a portfolio.
Real Estate Investments Through Sharestates
Real estate crowdfunding has streamlined the real estate developing and investing market. Once an investor is verified as accredited, and a project vigorously vetted and approved by our real estate industry experts, our crowdfunding platform puts investors and developers in direct contact with each other, allowing for more transparency, competitive rates, speed, and bigger returns.
New York Real Estate Investment Due Diligence
But, before you start to invest in premium New York City real estate, take a minute to do a little extra research.
- Check out the neighborhood
- Check out the property or building
- Check out the developer
Securing Real Estate Loans
Sharestates will vet every loan that is submitted, giving each loan a score based on nine key criteria of a real estate investment:
- Loan-to-Value Ratio
- Lien Position
- Development Phase
- Borrower Track Record
- Borrower Experience
- Borrower Credit Score
- Personal Guaranty
Add Real Estate Crowdfunding To Your Portfolio
Despite the vetting process that we put our projects through, the great thing about real estate is that it is something tangible that you can see and touch. Don’t be afraid to do some research on the neighborhood where the project is going to take place. And, check out the developer and his/her past projects.
It is too soon to tell what the global financial implications of Brexit will be, but it’s not too soon to take control of your money and your investments. Investing in New York real estate through crowdfunding has made investment opportunities in quality multi-family, retail, mixed-use and office projects accessible to accredited investors — in one of the most exclusive and sought after cities in the world.
Beginners Guide To Real Estate Investing
Marketplace lending has revolutionized the matchmaking process between investors and real estate opportunities. To protect your assets, you need to understand how to invest, and the first step is figuring out if you are a debt investor or an equity investor.
How Debt Investing Works
As a debt investor, you are lending money to a property owner to cover their debt. You are not an owner of that property. Debt investing is straight peer-to-peer lending where a property owner needs cash to cover their debt, and you give it to them on the condition they pay back that loan with interest over a finite period. Now, all you have to do is sit back and hope the property doesn’t fail and your payments come in on time. As a debt investor, your loan is secured against the property and you will get your money back even if the property fails. The risk is low, but the returns are secure and solid.
An equity investor is an owner of the property in which they invest. They purchase shares in the property and will therefore share in the profits when the property sells (assuming its value increases). Investing in equity typically signifies a long-term commitment to the property, however, you can sell shares any time. If you sell your shares for more than what you purchased them for, then you’ll earn a profit when you sell.
Equity investment has the potential for huge uncapped returns. However, should the property tank, you are assuming that risk along with other equity investors. The risk is high, but so are the potential returns.
Debt vs. Equity: Which Type of Investment is Right For You?
Deciding between equity and debt investing comes down to your philosophy on life. Which do you believe to be true? Slow and steady wins the race (debt investment) or “greater the risk, greater the reward” (equity investment). Are you cautious with your assets? Or are you a gambler, willing to risk more to gain more?
Diversifying Your Investment Portfolio
The truth is, you don’t have to choose. The more you diversify your portfolio and your investments, the more you are securing long-term gains. The high potential returns on equity investments are great, but lower-risk debt investment, with secured returns, can help take some of the pressure off of those high-risk equity investments. Equity investments fluctuate with the market whereas debt investments stay more even-keeled. It’s easier to take a gamble on equity when you have a solid debt investment foundation.
Be smart when you are building your real estate portfolio. Plan wisely, know your investment types, and diversify.
Everyone no matter who they are, or what they do for a living is looking for secure ways to invest their savings, and hopefully, save up to buy a car, a home, start a business, or save for their retirement. Where to invest your money can be overwhelming for most people. Thanks to our online real estate marketplace, building a real estate investment portfolio is easier than ever before.
Crowdfunding for Real Estate
When we are looking to invest our savings, we tend to start with a savings account. But, anyone with a savings account will know that the interest rates are hardly anything to shout about, and saving this way is slow. Sure, you are saving money, but you aren’t exactly making any money.
Bonds aren’t much better in terms of returns than a savings account, and the stock market is frustratingly unpredictable, not to mention time-consuming. Investing in stocks would be akin to taking on a second full-time job, and not a very secure job, at that. But, where to invest your money if not in savings, stocks, and bonds? The answer is real estate.
Real Estate Investment Via Crowdfunding
Until now, real estate opportunities have been available to an elite club of insiders. But, real estate crowdfunding has made quality real estate investment opportunities available to the general public. As an accredited investor, you will gain direct access to these real estate investments by investing with as little as $1,000.
Online Real Estate Investment
Real estate investing is a great way to diversify your portfolio. Investors use have access to invest in various real estate deals. Multi-family, residential, commercial, and mixed use properties as well as land and ground-up investments are accessible. By signing up with Sharestates today, you will be able to start building your real estate portfolio immediately.