We primarily offer investment opportunities in one to four-unit single-family rental real estate. Properties may be brand-new constructions, rented, off market properties as well as properties from the local listing services. Our Investor Support Specialists can help you use the website to select properties that fit your investment needs.
What is a neighborhood?
A neighborhood is typically at a sub zip code level. It could be a subdivision or a cluster of homes in a particular location within a city. Neighborhoods tend to be the closed correlation when comparing the transaction history of related homes. Our investment algorithms operate at a neighborhood level to achieve greater accuracy.
What are the specific benefits of using INVESTimate® over other, similar providers?
We provide the most detailed analysis about the investment performance of a single family property. Our Big Data analysis is supplemented by experts on the ground to provide the best of both worlds. We have a unique recommendation engine that takes investor financial preferences and matches them to available properties on the portal across the country. Investors now have a single destination where they can search, analyze and select properties for investment.
Does INVESTimate® charge a fee to investors?
Investors do not pay a fee to register with INVESTimate® or to search our database of available investment properties. We do charge an asset acquisition fee to cover all the services we provide to identify and acquire the asset, quarterback the property due diligence on the ground and connect the investor with a qualified local property manager.
To learn more about our fees and all the services we provide, please contact us at 866-250-5610.
How is investing with INVESTimate® different than a Real Estate Investment Trust (REIT)?
Although a REIT (Real Estate Investment Trust) invests in real estate there are many ways in which Real Estate crowdfunding is different from a REIT. In a REIT you don’t choose the real estate investments, with INVESTimate® you do. You have visibility and choice. A REIT tracks very closely to the stock market so you really don’t get real diversification; it’s the same roller coaster. When interests change or the Fed makes a directional statement the stock price of a REIT may change, even though the underlying real estate values haven’t changed.
Investing directly in real estate isn’t encumbered with the fundraising expenses or the heavy management overhead of a REIT. REITS often need to buy in bulk and frequently have to pick some bad with the good. In direct investing, you can be selective and take only the best properties and sell when you want to.
How do I know the price of the property is fair? Some estimates online show it's different than what you're showing.
INVESTimate® uses a proprietary valuation model, that uses transactions over the last twenty years, coupled with the most recent local comps to determine the fair market price of a property. Sometimes individual properties are in a better or worse condition based on what the owners have done with them. The final offer on the property can be adjusted after a due diligence inspection.
What expenses are considered in the expected returns you provide?
We deduct the following expenses to project your return:
Vacancy provision – Our projections include a 6% vacancy provision, as we prefer to project returns conservatively. While we don’t actually take out this amount, we recommend you set aside 6% of rent each month in case a vacancy does occur.
Maintenance provision – Like the vacancy provision, our projections also include an 8% maintenance provision. Similarly, we do not collect this amount, but recommend you set it aside in case there are any future maintenance needs.
Property management fees.
Taxes. We consider non owner occupied taxes as these tend to be different in many jurisdictions.
How do I know things won't break right after I buy the property?
INVESTimate® recommends that a full inspection be done on every property prior to the purchase and all documented repair requirements are made. This will reveal the life of all major elements like the roof, HVAC etc., so that a decision can be made to replace these prior to purchase if required. If the property is being refreshed, it’s done to a certain set of standards. All repairs should be documented (in some cases the city requires it) before the house is purchased. The investor pays for the inspection and can use independent licensed inspectors in all the investment locations.
Does INVESTimate® own the property or does the investor?
The investor owns the property. INVESTimate® helps identify and acquire the property on your behalf, but the investor own the title outright.
Is the INVESTimate® website and my data secure?
We use a combination of firewall barriers, encryption techniques and authentication procedures, among others, to maintain the security of your online session and all INVESTimate®.com accounts and systems from unauthorized access. When you register with us, we require a password from you for your privacy and security. We transmit your buy/ sell/ manage transaction data securely and our servers are in a secure facility. Access requires multiple levels of authentication. Our databases are protected from general employee access both physically and logically. We encrypt your password so that your password cannot be recovered, even by us. All backup data are also encrypted.
Real Estate Investing Questions
How do single-family real estate investments perform across different market cycles?
In general single-family real estate performs fairly well across all market cycles. In a growing economy with good employment the house prices tend to do well which would raise the value of your investment. Rising employment creates more households that help both home buying and renting. If prices go up rapidly then you will make less money from cash flow and more from appreciation.
Rents go up in inflationary times and act as an inflation hedge. In a soft economy more people tend to rent rather than buy and there is a softening of home price growth- in this scenario, you will see more cash flow and less appreciation. Of course, a major housing crash will diminish the value of your property, which will only affect you if you are looking to sell your property at that time.
Do I get a better return than the stock market? What's the advantage of this type of investment over the stock market?
It’s difficult to compare returns; it depends on the economic environment during time periods. There are periods when one outperforms the other. Real estate is an alternate asset class that does not have a correlation to the stock market. The stock market tends to react to many real-time triggers such as Fed’s comments or the latest unemployment reports or emerging market slowdowns. In addition, automated trading machines make it difficult for the real investor to time market entry and exits. Our clients invest in real estate to diversify from the stock market and balance their risk so that they don’t have all their eggs in one basket.
Are these investments risky?
As with all investments, there is some inherent risk. Just as with investing in the stock market, there are no guarantees. The major risk elements are vacancy, maintenance expenses and trying to sell in a down real estate market. In general, real estate has less volatility than the stock market.
Will my property appreciate?
It is always difficult to predict the future. We use a proprietary forecasting model that looks at employment, historical appreciation, new construction starts and a number of other factors that are neighborhood specific to come up with a Home Appreciation Forecast on all listed properties. In general, higher appreciation properties will be ‘growth’ oriented with lower cash flow while higher yield ‘income’ properties tend to have lower appreciation.
Identifying Good Investment Properties
How do I know the properties on the INVESTimate® site are good investments?
INVESTimate®’s INVESTimate® platform is a sophisticated tool that investors use to analyze properties. The platform provides the most comprehensive data set around the investment performance of a property. There are a number of criteria that should be considered when selecting an investment location- such as crime, schools, employers, median income, rent to price ratio; availability of local resources for management and more. Furthermore, we identify competent boots on the ground in the form of local managers; some of whom have as many as 20+ years in their location to make sure the properties are sound and remain that way through the lifetime of your investment. There is no guarantee that any investment will perform.
What type of neighborhoods are available on the platform?
INVESTimate® rates neighborhoods from A through D based upon factors of income, appreciation and volatility. A neighborhoods have higher growth and lower income while The properties we recommend tend to be in good middle-class neighborhoods. High-end neighborhoods do not provide as good of cash flow as home values are generally high compared to rents. A C neighborhood is a lower price neighborhood that have higher yields but may have lower tenant stability. Neighborhood selection will depend on your budget and immediate cash flow requirements.
How does INVESTimate® help me select the right investment property?
We first try to understand your financial goals, investment method (IRA, cash, loan), risk tolerance and any other preferences that you may have by asking you a few simple questions. We use the answers you provide to create a personalized investment portfolio that fits your needs using our proprietary real estate investment algorithms. Our Solutions Specialists then work with you every step of the way to select final properties. We deliver a hands-free investment experience for our investors.
How does the INVESTimate® platform from INVESTimate® help me select the right investment property?
The INVESTimate® platform has an intelligent recommendation engine that takes your financial goals, investment method (IRA, cash, loan), risk tolerance and any location preferences. It uses the answers you provide to create a personalized investment portfolio that fits your needs using our proprietary real estate investment algorithms. Our Solutions Specialists help you select the final properties and support you through the investment process.
How should I think about income or cash flow vs growth?
The best income opportunities arise when rents on a house are high compared to its purchase price. For example, a $140,000 house in Atlanta may rent for $1,400 per month, and a $750,000 house in Irvine, CA may for $3,000 a month. Therefore, an investor looking for cash flow would do better by buying $750,000 (or less) of properties in Atlanta if she has the budget. Cash flow neighborhoods also tend to have a lower quantum of investment. A growth investor may find the Irvine property more attractive as there has been historically good appreciation in the area compared to Atlanta, which should continue if current fundamentals hold.
Asset Management Questions
Who manages the property?
INVESTimate® has qualified property manager partners in each of the locations where properties are displayed for potential investment. Selected property managers have to demonstrate process, scale and a history of performance in that given location.
How do I know the amount being charged for rent is right?
INVESTimate® has a proprietary rent algorithm that has over 7 million historical rentals as inputs. We compare our rent valuation models with the comps in the neighborhood to arrive at a suggested rent. Our property management partners provide the final validation before purchase of a property in the event that specific property has characteristics that may make it rent lower or higher. This way investors have the benefit of data-driven analytics and boots on the ground.
What happens if the tenant leaves?
Your property manager will refresh the property so that it is in ideal condition for showing and market the property to get another tenant. Any damage comes out of the tenant’s deposit but you should expect a refresh/renovation cost when there is a vacancy. The property manger will charge a leasing fee to secure a new tenant.
How long do properties stay vacant after a tenant leaves?
We pick locations based on good employment and neighborhoods that renters like to live in, so that vacancies can be minimized. Fifteen to forty-five days are normal although it may vary by location and the state of the local economy.
Selling Your Investment Property
What happens when I want to sell the property?
The property can be marketed to another investor on the INVESTimate® network – there are currently over 100,000 users in the network. If the property has been held for a little while it will have a history and track record as a performing asset and will be attractive to other investors. This way you do not have to wait for the tenant to leave to market the property. You are of course free to sell it yourself to any qualified buyer in the open market.
I have an investment property I want to sell. How can I get it listed on INVESTimate®?
Please submit your property details on our Sell Your Property page, or go the Sell tab in the INVESTimate® website. Our underwriting team will review your property details to determine if it is a good fit for another investor.