Multi-family real estate is a staple in the real estate investment community. According to Sharestates CEO and Principal Allen Shayanfekr, “Despite moderating elements, because the economy is healthy, the apartment market is similarly healthy, even if the boom from earlier in this economic cycle has tapered off. ” He goes on to say “Our multifamily clients are anticipating that U.S. rent growth should maintain its current pace, largely thanks to cities in the South and West, where supply hasn’t outpaced demand.”

Read Allen’s full article in Forbes today by clicking the button below.

Since the financial crisis of 2008, there have been varying speculations regarding the health of the retail industry. The bankruptcies of huge retail companies such as Sears and Toys “R” Us add to that speculation. What are real estate investment experts saying about the overall state of retail today?

According to Sharestates Chief Operating Officer, Nicole Joseph “Retail is alive and well. The landscape of the retail market is in flux for certain industries, though, presenting new and unique opportunities for real estate developers and investors. Mixed-use developments and last-mile warehouses will prove to be lucrative investments in the current climate, but both will require careful analysis of local market conditions and demographic trends in the area.”

Read the entire article via the Mann Report, by clicking the link below.

Sharestates has announced that the company will begin financing Non-Performing Loans (NPLs) in 46 states. NPLs, a vital component of the mortgage market, have traditionally only been available to investors with liquidity to purchase the note through institutional trading desks. Sharestates’ NPL loan product now provides private real estate investors access to leverage, allowing for participation in the market and expanding their investment portfolios into this segment of the marketplace.

“As part of our mission and commitment to our community of real estate professionals, we are actively creating a streamlined financial participation matrix for borrowers and our buyers; starting prior to acquisition and evolving through the hold period of the asset(s)” said Sharestates Co-Founder and CEO, Allen Shayanfekr. “Our capital markets team has been working diligently to structure the right programs, covering all asset classes for borrowers, giving them the flexibility they need to grow their portfolio of holdings.”

Lisa Knee, partner and leader of EisnerAmper’s National Real Estate Private Equity Group, spoke to Allen Shayanfekr, CEO and Co-Founder of Sharestates to get his perspective on driving growth in the current real estate marketplace.  Since the enactment of Jumpstart Our Business Startups Act and the follow-up regulations from the SEC, real estate crowdfunding has been a widely used strategy allowing investors access into the marketplace. Since Sharestates was founded in February of 2015, the company has funded over $1.21B in loans.

In this Q&A, Allen discusses:

  • How to stay competitive
  • Key trends in 2018
  • Specific experiences
  • Opportunities and risk

About EisnerAmper

EisnerAmper LLP is one of the largest accounting firms in the U.S., with nearly 1,500 employees and 180 partners across the country. They offer comprehensive audit, accounting, advisory, consulting and tax services for clients as diverse as sophisticated financial institutions and start-ups, global public firms and middle-market companies; as well as high net worth individuals, family offices, not-for-profit organizations, and entrepreneurial ventures across a variety of industries.

Sharestates, an online real estate investment platform, announced on Thursday the launch of new online user portals that fully optimize the real estate investment process from beginning to end, providing investors with the first ever UX solutions in the real estate investment industry. According to Sharestates, the online portals provide lenders, borrowers, and third party vendors involved in the developmental stages to obtain and procure loans.

The platform stated its solution was designed by its development team alongside CEO and Co-Founder Allen Shayanfekr with UX and functionality in mind – now offering investors a streamlined “one-stop shop” in real estate financing. In launching the new online portals, Sharestates is reportedly incorporating engineering, audience development and content for a fresh and crisp user experience aimed at helping users simplify the money lending and borrowing process. The portals now include interfaces for borrowers, brokers, bank attorneys, settlement agents, and title companies. The investment portal noted it plans to add interfaces for inspection companies and appraisers over the coming months.

Speaking about the developments, Shayanfekr stated:

“As we continue to strive to be the nation’s leading private lender, Sharestates identified the lack of a true user experience throughout the real estate investing arena,” said . “The need for a fully functional website that has the tools and simplicity to allow for seamless business transactions is paramount in the real estate investment space.”

Sharestates’ new online portals will also provide investors with the ability to remove the tedious and timely human factor that is implicit with securing borrowed money and instead, live and breathe reactively within Sharestates. The portals now connect various systems and functions of a site, such as underwriting and processing, that are normally independent of each other and will create compatibility between them to ensure cohesiveness. Additionally, the online portals will host all activity, documents, and updates in one place, which can be updated, completed, and submitted accordingly. Further saving time and confusion while simplifying the process digitally. Shayanfekr added:

“While not web designers by trade, we realized that there was a true lack of functionality and simplicity throughout the real estate investing space, compared to many other industries. This was not in existence before and now it will bring our crowdfunding industry up to speed to ensure that our customers receive the highest quality product within a reasonable and fair time frame.”

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.

About Sharestates

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.

Sharestates, an online real estate investment platform, announced on Thursday the launch of new online user portals that fully optimize the real estate investment process from beginning to end, providing investors with the first ever UX solutions in the real estate investment industry. According to Sharestates, the online portals provide lenders, borrowers, and third party vendors involved in the developmental stages to obtain and procure loans.

The platform stated its solution was designed by its development team alongside CEO and Co-Founder Allen Shayanfekr with UX and functionality in mind – now offering investors a streamlined “one-stop shop” in real estate financing. In launching the new online portals, Sharestates is reportedly incorporating engineering, audience development and content for a fresh and crisp user experience aimed at helping users simplify the money lending and borrowing process. The portals now include interfaces for borrowers, brokers, bank attorneys, settlement agents, and title companies. The investment portal noted it plans to add interfaces for inspection companies and appraisers over the coming months.

The key to a good Sharestates rehab investment is a healthy exit plan and an accurate renovation timeline. These factors are not just important for a real estate investment borrower, but also for accredited investors. 

Every real estate developer knows that renovating the interior and exterior of a property can be a tedious process but is essential to realizing one’s profit. Most buyers desire a turnkey property that requires little to no renovation after the purchase. Needless to say, it is an important bargaining tool to have a well renovated and designed property.

The Sharestates Commitment to Quality Real Estate Investments

To keep our investors notified on the progress of their rehab investments, we inspect each property before releasing another draw of capital to the borrower. From appraisal to inspection, Sharestates tracks the updates of each of our investments to protect our investors.

Submit an Application Now
To see some of our favorite before and after renovations, check out the below!

 


Also, check out some of our most recently funded projects:

To view the company’s historic performance, check out our statistics page!

  

 

 

 

New tax legislation is bringing many complicated changes that could both positively and negatively affect your investments. The best way to prepare for these changes, those that took effect on January 1, 2018, with the Tax Cuts and Jobs Act of 2017, is to seek the information you need to become an educated and savvy accredited investor or real estate professional.

The Act has been controversial and may have the greatest detriment on high-value firms that are heavily leveraged and relied on the significant deductions afforded by prior legislation. For real estate investors, real estate professionals, and property owners, the Act provides significant tax advantages and continued capital gains protection. We’ve assembled some of the most common questions our clients have been asking us regarding these new changes:

1. How does the new law affect IRC 1031 Tax-Deferred Exchanges?

1031 tax-deferred exchanges have been retained as long as the properties being exchanged are of ‘like-kind,’ although personal property is no longer eligible for exchange treatment under the 1031 program. If you’re planning to sell income producing property intended for business or trade use, you can defer capital gains taxes when you trade up to a higher value property. Under IRC 1031, any type of real property held as an investment can be traded for another real estate investment property, regardless of the form, as long as the primary purpose of the investment is as a long-term investment (not intended for short-term resale).

2. What changes have been made to tax rates, especially those that affect real estate investors?

The Act provides tax benefits to both larger entities such as C Corps, and sole proprietors operating under common business forms such as LLCs and S Corps. The corporate tax rate has been reduced to 21% from 35%, while entities subject to pass-through taxation will quality for a 20% deduction from qualified business income. Firms that primarily provide personal services will not be allowed to claim this deduction, with the exception of real estate professionals.

3. Will I still be able to deduct interest expenses on real estate?

This is one of the more controversial changes as the result of the new legislation. Prior to 2018, business owners were allowed to deduct 100% of business interest; the Act has changed this to a maximum of 30% of adjusted taxable income. Fortunately, the new restrictions will only apply to business that have generated a total gross income of $25 million over the preceding 3 years.

An indicator of legislator’s favor of REI, interest accrued in the conduct of businesses involving real property investment will be exempt from the deduction limits. In instances where the new restrictions apply, the business owner can opt for a permanent exemption with more strict depreciation requirements.

4. How will tax treatments change for REITs?

Real Estate Investment Trusts (REITs) stand to benefit the most from the new legislation. REIT dividends are now allowed a 20% deduction, resulting in an overall tax rate of less than 30% for individual stakeholders, and only a slightly higher rate for corporate REIT earnings. The new deductions will provide an overall tax rate that is 10% less that before the Act.

5. Can I continue to deduct state and local property taxes?

Yes. The Act allows both single and married tax payers to deduct up to $10k in property and income taxes for their principal residences for loan amounts up to $750k. A benefit for professional real estate investors and business owners, the bill provides an exemption to the deduction limit for taxes related to business activities (real estate investment). Interest on home equity debt can no longer be deducted under the new legislative restrictions.

6. Is the profit from the sale of my residence still exempted from taxation?

Yes. This is another tax issue that was under intense debate in forming the final bill as passed by Congress. Legislators in the House and Senate had considered modifying the current exemptions from capital gains tax on the sale of principal residences to generate addition tax revenue. The original bill as approved by Senate intended to change the exclusion for residency requirements to 5 years out of the previous 8 years, a drastic increase from the previous requirement of 2 out of 5 years. Legislators had also proposed eliminating the current income based exclusions of $250k single, or $500k married.

This is a retained benefit for real estate investors that use the ‘housing-hacking’ strategy to take advantage of current exclusions by maintaining primary residence in a multi-unit income property for 2 years before resale.

7. How will the changes to the standard deductions affect the real estate economy?

The Tax Cut and Jobs Act has increased the standard deduction to $12,000, and double that for joint tax return filings. While this seems like a clear benefit for tax payers, it may have a detrimental effect on the real estate market by diminishing housing demand. The increased standard deduction will offset the effect of restrictions on interest and property tax deductions, diminishing the appeal of real estate ownership as a source of deductions. This de-incentivizes homeownership and will result in a minimal tax differential between owning and leasing for most citizens.

8. Is protection from capital gains tax still in place for carried interest?

Yes. Although the issue was debated by parties that insisted investors should be subject to the higher rates imposed on corporate income, the Act allows a capital gains tax exemption on carried interest held for a minimum of 3 years, after which it will be taxed at a rate of 23.8%.

Carried interest is the share of profit in a private equity fund that managers earn for taking risks and pushing the portfolio’s growth and profitability. Opponents argued that the interest should be taxed at the standard corporate rate, while supporters maintain that the deferred payment at the end of the carrying period merits capital gains treatment.

9. Have new tax laws affected depreciation periods for business assets and investment properties?

The Act has retained the current depreciation periods of 27.5 years for residential income property, and 39 years for commercial. Legislators in the House had proposed allowing immediate expensing of depreciation for real property; however, the final bill does not include a bonus depreciation provision for real estate. For qualified property, items with a depreciation period of less than 20 years, the Act allows 100% immediate expensing as bonus appreciation. The intention of the change is to reduce tax liability in the short-term to stimulate economic growth.

10. Will the new tax legislation affect the exemptions for older and historic homes in my rental portfolio?

The Bill eliminates the prior 10% credit for structures built before 1936. Only certified historic buildings are allowed to continue receiving the 20% tax credit. The legislation as approved by the House intended to rescind the Historic Rehabilitation Credit, a tremendously beneficial provision for real estate investors that specialize in the redevelopment of older structures.

11. How will tax law changes affect me as a real estate professional?

The new legislation provides tax relief to individual business owners and those operating under disregarded entities such as LLCs an S Corps. The law includes a 20% deduction on qualified business income, with the major exception being those that earned income from personal service businesses. Even though real estate professionals typically fall under the classification of personal services provider, they will be allowed to claim the deduction. In conjunction with the doubled standard deduction, it promises a tremendous reduction in tax liability for real estate professionals.

More Answers

If you have more questions, please reach out to us. The answers provided here do not constitute legal advice and should not be construed as such. Please consult with qualified tax and legal professionals for more precise legal and financial counsel.

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.

Learn More About Auto-Invest Today

 

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.