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EquityMultiple

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By: Scam Risk - Expert Reviewer

EquityMultiple Review (2021): 10 Things You Should Know!

If you want to invest in real estate, you are no longer limited to finding and managing properties on your own. Investment crowdfunding is now easier than ever, thanks to sites like EquityMultiple.

This review will go over EquityMultiple to see if it really is the best real estate investment source out there.

You’ll learn whether real estate investment is the right type business for you.

And at the end, you’ll find answers to some of the most frequently asked questions regarding EquityMultiple and real estate investing in general.

But most importantly, you’ll see the exact system many others have used to build their own internet marketing business to over $40,000 a month in mostly passive income.

This system made them swear off real estate investment for good because it uses some of the same skills but in a much more powerful and profitable way!

Table of Contents

EquityMultiple Review 2021: Overview

EquityMultiple is an online commercial real estate crowdfunding platform that provides investors access to professionally managed commercial real estate.

  • Investment Types: Real Estate
  • Minimum Investment: $5,000
  • Sectors: Commercial Real Estate
  • Advertised Returns: 6-14%
  • Must be accredited

Pros

  • Financial backers (Mission Capital) and co-founders have a solid commercial real estate pedigree.
  • A mix of debt, equity, and preferred equity offerings
  • Extensive due diligence on investments before offering them (accept fewer than 5 percent of potential deals)
  • Responsive customer service

Cons

  • Only accredited investors are eligible.
  • In general, there are fewer active investments on this platform than on other platforms.

What is Commercial Real Estate Crowdfunding?

Crowdfunding real estate is a comparatively new method of raising capital for real estate investments by utilizing crowdfunding.

Like real estate crowdfunding platforms, EquityMultiple strives to provide a higher level of asset quality, due diligence protocols, asset management, and investor services.

Real estate returns in the United States have historically outpaced stock market returns.

Real estate provides various indirect benefits, such as portfolio diversification, inflation protection, and the stability of investing in a tangible asset.

Direct real estate investments, such as those offered by EquityMultiple and other investment marketplaces, have historically experienced less market volatility than public REITs and do not incur the high fees associated with private REITs.

Over the last four years, EquityMultiple has made more than 120 investments across the country.

They’ve had 31 go through the full cycle, with the majority performing as expected.

They have a Track Record utility that displays the portfolio’s overall performance. After creating an account, anyone can access it for free.

The majority of their 31 accomplished investments are in the form of debt or preferred equity.

Investors are entitled to a predetermined flat rate of return (and a target share of upside in the case of preferred equity investment).

At this point, their aggregate returns reflect an annualized return range in the low-to-mid-teens. To date, their investors have invested $185 million.

EquityMultiple Review 2021: Commercial Real Estate Investments

EquityMultiple is a commercial online real estate company that facilitates the investment of accredited investors in professionally managed commercial real estate.

The intention is to make real estate investing simple, accessible, and transparent.

With as little as $10,000, an accredited investor can invest passively in professionally managed real estate across the United States through EquityMultiple.

Individual investors gain access to private assets that may provide critical diversification and non-correlated returns compared to a traditional investment portfolio of stocks and bonds while also building a diverse portfolio of real estate across markets and property types.

EquityMultiple individual investors have participated in over $2.7 billion in real estate transactions since their inception in 2015.

To help protect investors’ interests, they follow a rigorous multi-step due diligence and investment structuring process, accepting only about 5% of the investments they evaluate.

EquityMultiple provides senior debt, preferred equity, and equity investments for a variety of risk/return profiles, as well as deal flow across all property types and markets in the United States.

EquityMultiple’s investment origination practice focuses on the following areas:

  • Commercial properties with current cash flow in thriving markets.
  • Short-term loans and preferred equity investments provide investors with a high APR or current select return.
  • Value-added projects with construction components and more aggressive business plans focus on investments with a clear path to stabilization and cash flow for investors.

When compared to Other Real Estate Crowdfunding Platforms, EquityMultiple Stands Out.

EquityMultiple offers stringent underwriting, a dedicated Investor Relations Team, and in-house Asset Management services to help investors and investments navigate the entire lifecycle as a real estate crowdfunding platform.

They prioritize strong returns, capital preservation, and transparent reporting while managing everything in-house.

They provide investments in core CRE asset classes (multifamily, office, and industrial), as well as more niche asset classes such as self-storage, assisted living facilities, and car washes, which may provide a recession-resistant investment thesis.

Most other platforms do not provide this range of investment offerings or in-house support. They also recently introduced some Private Fund products.

Giving their investors even more diversification options. The following is an EquityMultiple analysis of their valuation proposition.

What kinds of properties should I look for on EquityMultiple?

They provide commercial real estate investments managed by seasoned firms and overseen by their in-house team.

Property types, including (but not limited to):

  • Multifamily
  • Industrial
  • Office 
  • Storage
  • Car Wash
  • Opportunity Zones
  • Cannabis Facilities
  • Retail
  • Mixed-use
  • Student Housing
  • Senior Living Facilities 
  • Data Centers

They provide a variety of investment structures, such as debt investments, preferred equity, equity, fund investments, and tax-advantaged real estate investment offerings.

EquityMultiple Review 2021: Portfolio Makeup

  • Senior Debt: 12%
  • Preferred Equity: 45%
  • Mezzanine Debt: 9%
  • Common/JV Equity: 34%

This diverse portfolio of assets is concentrated in 51 geographic areas throughout the United States. It is backed by a network of 62 lender and sponsor partners.

Breakdown of Target Return Ranges:

  • Senior Debt: Investors earn a net return of between 6% and 11% on their investment.
  • Preferred Equity: Net current preferred returns of 6-12 percent and total net preferred returns of 11-17 percent, including an accrued return component.
  • Common Equity: 14% plus net IRR (target IRRs can vary substantially based on risk factors).

Investments in Opportunity Zone Funds, 1031 Exchanges, and Mezzanine or Subordinate Debt Investments are also available through EquityMultiple. As a result, this list of structures and target return ranges is not exhaustive.

EquityMultiple Fees

EquityMultiple discloses all fees associated with each investment offering in complete transparency at the bottom of each offering page.

Equity investments are subject to an annual asset management fee ranging from 0.5 percent to 1.5 percent.

Once an accredited investor has received all principal, EquityMultiple typically retains 10% of profits on realized equity investments.

This further aligns with their interests as they seek to maximize returns for investors.

Pre-vetting and Due-diligence Process

EquityMultiple distinguishes itself through a rigorous pre-vetting process. Each investment must go through a multi-stage due diligence process.

These are the primary steps their team takes when attempting to deliver a highly compelling investment offering:

  • Sponsor Vetting. To guarantee that they get the best return on their investment, they only do business with sponsors and lenders they know and trust. Sponsors must have prior experience in the same asset class, market, and strategy as the investment presented to EquityMultiple.
  • Investment-Level Diligence. They analyze hundreds of attributes, stress test the sponsor’s assumptions, and conduct their own return modeling and risk assessment based on a thorough examination of market comps and other data sets.
  • Investment Structuring. Their team has decades of experience in real estate law and finance. They collaborate closely with their sponsor partners to structure investments to provide investors with compelling potential risk-adjusted returns. In most cases, this includes a preferred return as well as near-term or immediate cash flow.
  • Ongoing Asset Management. They keep track of the investments’ progress from inception to exit. Investors will benefit from frequent, transparent performance reporting. Working with sponsor partners continuously to find solutions to any unforeseen challenges.

All investments must be approved unanimously by the Investment Committee. They have accepted less than 5% of the investments that have been presented to them.

EquityMultiple Investment Structures: Equity and Preferred Equity

Establishing a particular purpose vehicle – an LLC – is required for equity and preferred equity investments.

This entity, usually as an LP, invests in each transaction (limited partner).

They do this to ensure that if EquityMultiple ever ceases operations (which they do not anticipate), a third-party manager will take over those investment entities.

Preferred equity or equity investments structure the highest level of investor protection possible.

They frequently have some recourse in the unlikely event that the sponsor acts in bad faith.

This is a significant advantage of their model over investing directly with sponsors.

EquityMultiple Performance

Over the last four years, they have offered over 120 investments across the country, totaling 181 million dollars in investor funds. Thirty-one investments have been fully exited.

You can view the overall performance of your portfolio on their Track Record page. After creating an account, anyone can gain access (which is free).

EquityMultiple Security

Giving a company so much personal information can be unsettling, especially when that information is transmitted online.

EquityMultiple, on the other hand, takes your security seriously and goes to great lengths to protect any data you provide.

EquityMultiple uses bank-grade protocols to protect your data during transmission and storage.

Their systems have passed FDIC and retail banking compliance tests, and everything is encrypted using cutting-edge technology.

EquityMultiple Customer Service

Your screen may have a live chat prompt appear as you go through the installation and investment process.

If you have any inquiries and would like to speak with a live person, you can use this screen to do so.

In addition, each investor on their platform is assigned a dedicated Investor Relations representative. Investors can schedule calls and speak with their team directly.

Recap – EquityMultiple Highlights

  • Accredited investors looking to diversify their portfolios through real estate.
  • Those who have the means to invest $10,000 (minimum investment) or more.
  • Individuals who are seeking commercial real estate access.

Accredited Investors Only:

Individuals with a net worth of more than $1 million (excluding the value of their home) or a yearly income of more than $200,000 ($300,000 with a spouse) in every two years, with the expectation of sustaining that income in the future, are considered accredited investors.

Accredited investors may also have certain professional certifications or credentials.

High Investment Minimum:

A $10,000 minimum is required, and additional shares are typically offered in $5,000 increments above the minimum. The minimum investment amount in a self-directed IRA is $20,000. EquityMultiple does occasionally offer investments with a $5,000 minimum.

Personally, I don’t like investment minimums like this. Especially when you’re likely not going to see that money again for a VERY LONG time.

I’d much rather invest my money in something like this that can give me an full ROI in just a few months…

Specialized Investments: :

Senior debt, mezzanine debt, preferred equity, opportunity zones, common equity, 1031 exchanges, and private fund offerings are all available through EquityMultiple.

The main distinctions between them are primarily related to risk level and payment priority order. Senior debt carries the lowest level of risk.

It is paid out first, followed by mezzanine debt, preferred equity, and finally common equity — which provides no recourse if a borrower defaults but has uncapped potential returns if the investment performs well.

Opportunity zones are plots of land designated for economic development by the state and federal governments. An opportunity fund is a tax-advantaged investment that allows you to invest in opportunity zones.

1031 exchanges enable real estate investors to postpone paying capital gains taxes by reinvesting the returns from the sale value of a real estate investment in a property “of like kind.”

Investment Time Frames:

The investment time frame varies depending on the asset. EquityMultiple provides several different investment structures. The following are the typical hold periods for each:

  • Senior debt (at a fixed rate of return): 9 to 24 months.
  • Preferred equity (fixed rate of return): 12 to 26 months
  • Common Equity: 3 to 7 years.
  • Funds: vary.
  • Opportunity Zones: 10 years or more (to reap maximum possible tax benefits).

Easy-to-use platform:

To get started, accredited investors must first open an online brokerage account.

Register (This includes self-certifying that you are, in fact, accredited — though the documentary proof is not required.) and begin reviewing the investment offerings as soon as you receive an email confirmation.

Making an account doesn’t necessitate making a deposit. Still, you can link your funding source online if you decide to invest.

Getting Started With EquityMultiple

Some of the significant benefits of crowdfunding platforms include the ease and convenience of investing and managing your investments online.

The entire process takes place on the EquityMultiple online platform.

It works as follows:

  • Sign up for the platform and confirm your accreditation.
  • Examine the current offerings.
  • Examine investment details and select a deal that meets your investment goals.
  • Complete your account setup by linking your bank account to fund investment options and receive distributions.
  • Complete the “checkout” process for your investment: Sign documents electronically and fund your investment.

Prior to investing, confirm your accreditation and review current offerings to determine what asset class, location, return potentials, as well as where in the capital stack your money should be placed.

After you’ve made an investment, you can:

  • On the “My Portfolio” page, you can keep track of your investment performance.
  • Through the “My Activity” feed, you will receive regular asset management on all of your investments.
  • Earnings and profits are deposited directly into your bank account using ACH.
  • View quarterly investor performance updates.

If you have any further questions, their Investor Relations Team is always available to help. Create an account on the EquityMultiple platform today to learn more and dig deeper into the track record.

What Is Our #1 Recommendation For Making Money Online In 2021?

Where this EquityMultiple falls short is in scalability. Because in order to make a good amount of money with real estate, you have to own multiple different properties.

And who has that kind of capital to start?

But what if you could own Digital Real Estate for just a fraction of the cost?

With Digital Real Estate, specifically Local Lead Generation, you will be getting service requests to multiple sites at every minute of the day from people who are willing to pay a lot of money for what you can provide them.

I was watching a YouTube video once where the host made a comment that it isn’t about making a lot of money from one website… it’s about making a little bit of money from lots of different websites.

So, think of it this way….

What if you could have streams of investment income where you operated 10 rental units that you could charge anywhere from $750-1,000 per month?

That’s $7,500-10,000 per month in passive income!

What If You Owned 10… 50… or 100 Rental Units?

But instead of spending $Millions to build houses or apartment complexes… you spend a couple hundred dollars to build websites.

You then get those websites ranked in the search engines for specific home-based services that customers are searching for.

Next, you offer your lead generation system to local business owners who are looking for customers and are willing to pay you for their information.

And Then…

BAM!

You’ve just created a Digital Real Estate Investment Empire that is potentially earning you 4-5 figures in PASSIVE INCOME on a monthly basis without spending a single dime on ads.

With conventional digital real estate, you have to compete with thousands, if not millions of others who are selling the SAME product to the SAME customers.

Unlike EquityMultiple, where you’re profiting maybe $250 per property, you could be getting 5-10X THAT.

With Local Lead Generation, the competition is virtually nothing and your profit margins are 85-90%.

Now, I could go on and on, but I’m sure you have tons of questions…

So, learn how you can create Digital Real Estate assets and start building YOUR digital empire!

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