Be a Landlord for $100- 500 Bucks !
Yes, That is correct. A growing trend in real estate investing is to allow investors with little capital to invest in ranges as low as $100.- $500. While iBuyers like Zillow and Opendoor took chances in buying and selling existing real estate, investors like Jeff Bezos are staking grown in brand new rental properties.
A startup backed by Jeff Bezos and Salesforce CEO Marc Benioff is the latest venture capitalist team working to expand real estate investing to the masses.
Arrived Homes launched its latest batch of new offerings yesterday: six rental properties that retail investors can buy into with as little as $100. The offerings went live on the platform at 11:00 AM EDT on April 5, 2022, and all properties were fully funded in less than 12 hours.
The first two properties sold out in under two hours. The first was a five-bedroom, three-and-a-half-bathroom home in the Columbia, SC market named The Bedford. The property was acquired by Arrived Homes for $280,000 and investors purchased the 12,317 available shares at $10 each.
The second property to sell out was a four-bedroom, two-and-a-half-bath home in the Nashville, TN market, named The Jack. Arrived Homes acquired the property for $414,755 and investors purchased all 18,359 available shares at $10 per share.
Shares of the remaining properties sold out throughout the day to a total of 750 retail investors. The total amount funded was about $800,000 with combined property values totaling approximately $1.7 million.
Arrived Homes has experienced tremendous growth since its launch just a little over a year ago. The platform funded 51 homes during the last eight months of 202,1 with approximately $18.5 million in property value. So far in 2022, Arrived Homes has already funded approximately $17 million worth of properties.
Arrived Homes is not the only investor in the space, as their portfolio is now being matched by Fundrise, a 5 star investment company.
Fundrise recently secured a $300 million credit facility from Goldman Sachs to finance new construction on investable single-family homes and has outbid institutional investors trying to acquire new rentals. In December, it outbid larger firms with $1 billion bid and acquired a new rental development in Texas.
According to Bloomberg News, Fundrise has acquired or is under contract for about 2,000 homes and plans to buy more than 25,000 over the next few years, magnitudes greater than Arrived Homes’ haul.
Investor builder Giant D.R. Horton is also staking claim in the space.
A bidding war broke out this winter at a new subdivision north of Houston. However, this time the price was the entire subdivision, not just a single suburban house, illustrating the rise of big investors as a potent new force in the U.S. housing market.
D.R. Horton Inc. built 124 houses in Conroe, Texas, rented them out and then put the whole community, Amber Pines at Fosters Ridge, on the block. A Who’s Who of investors and home-rental firms flocked to the December sale. The winning $32 million bid came from an online property-investing platform, Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals.
So it seems the bottom line is not whether this investing in rental real estate will take off but rather that it already has. The question is, how far will it go?
According to Suzannah Cavanaugh of Bloomberg, other startups such as Roofstock allow more wealthy investors to own rental shares. NestEgg, another venture-capital-backed startup, is building a more direct investment base. CEO Eachan Fletcher hopes to create a million millionaires in the next five years by allowing individual owners to acquire more buildings through property management and financing software.