New Platform Deep-Dive Review: Share SFR Single-family Rental Platform
This newcomer to The Review offers deals in the desirable but often-difficult-to-access class of single-family rentals. It has impressive deal volume (7 currently), targets landlord friendly states and conservative investors will like the down-to-earth looking projected returns. Downsides for some investors includes lack of disclosure of the full track record and co-investment by principals.
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A Changing of the Guard for Real Estate CrowdFunding?
Downturns typically do one of two things to a young industry: Either:
The leads of the top one or two companies become cemented (as the smaller ones go out of business). And these leaders emerge far further ahead and more dominant than ever.
....OR the leaders crack (through miscalculations and/or mistakes). And this often opens up the door for brand-new companies to enter the market with better and more innovative solutions, which can take the industry in a new direction.
Several years ago I assumed that real estate crowdfunding would be in the first situation when the next real-estate downturn hit. And I believed that CrowdStreet (which was the dominant leader, by far) was going to grab virtually all the business and cement an insurmountable lead (as the most of the others were choked out). And I never imagined that investor-claimed satisfaction with CrowdStreet would tumble through the floor.
In the meantime, I've been noticing a trend of brand new companies popping up like daisies after a spring rain. And many of them are taking a different take on things and/or doing things differently than than the old guard.
So this is the third article in a new series about these new platforms. And this one is about Share SFR, which specializes in residential equity (i.e. single-family rentals).
Loving Single Family Rentals
In the groundbreaking study, "The Rate of Return of Everything", residential real estate's long-term performance (1870 - modern era) walloped virtually every other asset class.
It absolutely destroyed bonds and treasuries. And to the surprise of many, it did about as well as the stock market did. And when investing, the after-tax return is what matters the most. But, the study didn't look at taxes (and how real estate often enjoys many tax breaks that stocks don't). So after factoring that in, residential real estate almost certainly beat the stock market, too.
So I personally love the single-family rental asset-class. And it's the bedrock of my core portfolio.
But, there just aren't a lot of residential equity funds available. So it can be very difficult to access this asset class as a passive investment. And many investors are forced to own this kind of real estate directly (if they want in their portfolio).
And so when I saw Share SFR I was immediately intrigued.
Share SFR Features
Share SFR currently has seven open properties which is very impressive for a new site. This makes them large enough to be an immediate contender for an investor's potential portfolio. And I also like how they claim to target markets that are landlord friendly (as this can be an important factor in the ultimate return).
As a conservative investor, I want to see conservative underwriting and don't want to see sky-high projected returns (which often require the sponsor using aggressive amount of leverage, taking on higher risk property types like Class C, investing in higher risk markets etc.). So Share SFR gave me a positive first-impression by showing returns that appeared to be reasonable/modest (currently in the 4-6% range).
On the downside, co-investment by principals does not seem to be disclosed on each deal. And Share SFR is a relatively new company that does not appear to currently disclose their complete track record.
This new review has more info on how Share SFR works, its pros and cons and also a due-diligence deep-dive on a current Share SFR deal. Click here to see the full Share SFR review.
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