How We’re Different (from other ‘real estate crowdfunding’ platforms)
If you’re here, you’re probably aware that we’re not the only company seeking to make real estate investing more accessible via technology in the wake of the JOBS Act of 2012. Depending on your definition, there are anywhere from 15 to 100+ such sites transacting business online. If you’re here, you’re likely aware of, if not investing through, more than one of these platforms.
We’re not writing today to argue that EQUITYMULTIPLE is the only such platform worth a look. A number of companies in the space have built well-earned track records and, depending on the investor, there may be room in a portfolio for deals from several or many platforms. The aim of this article is to break down the major ways EQUITYMULTIPLE differs from other platforms.
Debt Syndication: A number of platforms offer individual debt deals that yield fixed, flat-rate returns. However, EQUITYMULTIPLE is one of only two established platforms that offers “syndicated” debt, meaning that we offer a portion of a loan, that was originated and funded by a third party lender, to our investors. We are the only platform that practices this approach while maintaining a focus on institutional-grade commercial real estate, rather than single-family. Most other platforms instead fund loans to developers and sponsors via their own cash reserves, effectively acting as the lender.
We believe in the syndication model because it allows us to originate these debt investments from experiences lenders with specialized knowledge and extensive track records within their geography and/or project type. This provides our investors multiple layers of diligence: the lender’s underwriting, our vetting of the lender, and our further diligence of the specific deal.
Mission Capital Partnership: A handful of platforms in the space are advised by accomplished real estate investors. To our knowledge, we’re the only platform directly partnered with an established real estate firm — Mission Capital Advisors. Based in Manhattan, Mission Capital has executed more than 60 billion in commercial real estate transactions over the past decade, always operating ahead of the curve in adopting new technology. Three of Mission’s principals sit on the board of EQUITYMULTIPLE, helping to inform investment strategy, and often investing directly in deals.
Above all, the partnership means access quality deal flow from Mission’s database of experienced lenders and sponsors from across the country.
Institutional Commercial Real Estate Focus: Some platforms focus exclusively on financing single-family projects, some offer only equity deals. Others have tended toward funds, whereby investors invest in a group of properties with limited visibility. Our focus is on large commercial projects from experienced real estate companies, with a mix of debt and equity offerings. We feel that both aspects of this approach will serve investors best in the long run, through market fluctuations.
This article originally appeared on the EM Blog