Latest news & feature reports on Crowdfunding
iFunding is pleased to announce William Skelley, Founder and CEO, will be appearing on The Stoler Report this month. The episode debut will air Tuesday, February 22nd, 2016 on NYC CUNY TV. To view a sneak peek of the episode, view it now on YouTube.
The Stoler Report-New York’s Business Report, is New York’s only television broadcast featuring real estate and business leaders. Michael R. Stoler hosts the show. The weekly program features compelling group discussions highlighting current events and issues in the world of real estate.
Featured alongside Mr. Skelley, in the panel discussion of “The Evolution of Crowdfunding for Commercial Real Estate,” includes renowned real estate and investment professionals: Paul Braungart, Founder and President, Regional Capital Group; John Shannon, Senior Managing Director, HFZ Capital Group; Larry Davis, President, Shorewood Real Estate Group; and Nicholas Mastroianni II, President and CEO, US Immigration Fund.
The show will air over the next three months on the more than twenty university, educational, community, and public access television stations. For those not able to watch live, the episode will also be available on The Stoler Report website and The Stoler Report App, which can be downloaded for free on iTunes and Google Play, after the debut showing on Tuesday, February 22nd . Also view the episode now, on YouTube!
While many investors aspire to own a piece of the skylines dotting America’s gateway cities, 2016 is the year of the secondary and tertiary markets, which are offering a better proposition value than most of the traditional “Big Six” markets. The Urban Land Institute (ULI) recently released its “Emerging Trends in Real Estate” report, which highlights some of the best markets to watch this year.
Issues found with larger markets, the report says, is that they have become so highly valued on a global perspective that pricing has risen to unattainable levels for a typical domestic investor. When ULI reconciled its survey results, it became clear that markets were moving in the rankings as a result of market participants’ need to take a more offensive approach to the market or to set up a desirable defensive position.
The cities in the top 10 are a combination of traditional higher-growth markets that offer favorable business conditions; markets that were slowed by the global financial crisis, but are now in a position where demographics may drive future growth; or new markets that appear to be positioned to move up a class in the investment strata.
ULI’s 2016 markets to watch, and the reasons they made the list:
iFunding, a leading real estate crowdfunding platform, had its best month in its 3 year history, offering investors over $14 M in real estate investment properties.
August is typically one of the quietest months of the year, with investors distracted by summer activities. However, due to the quality of iFunding’s real estate opportunities, the company quickly funded six of its eight projects listed within a week of introducing the project to its 7,000 accredited investors.
“iFunding takes pride in providing quality deals for our investors, “ William Skelley, Founder and CEO, states, “We have been focusing on developing sound relationships with our sponsors, and this month, it’s clear this effort has paid off.”
“We thoroughly enjoy working with the iFunding team and using its platform for our funding source.” Myles Bruckal, Founder of The Bruckal Group says, “Raising capital with iFunding exceeded our expectations, and therefore listing with them again was an easy decision. We are honored to be apart of its most successful month, and we’re in discussions regarding our next project for the iFunding platform. ”
iFunding expects continued growth by offering larger and higher quality opportunities and acquiring additional accredited investors.
iFunding is a leading real estate crowdfunding platform, facilitating debt and preferred equity fundraising for properties ranging from multi-family residences to apartment towers, hotels and resorts, ,retail locations, malls, offices, mixed-use buildings, and more. iFunding provides opportunities for its 7,000 accredited investors to invest in institutional-quality real estate deals, with a minimum investment of $5,000. The company oversees deals throughout their lifespan, providing extensive information and transparency to give investors insight and oversight into their investments. It also generates financing for multi-project funds, and partners with family offices to co-fund opportunities with its individual investors. iFunding offers flexible financing terms to real estate developer and operators. Visit http://www.ifunding.co for more information, or connect with us on LinkedIn athttp://www.linkedin.com/company/innovational-funding, on Facebook at http://www.facebook.com/iFunding , or via @inno_funding on Twitter. The phone number for investor and operator inquiries is 844-367-4386.
US government data indicates that commercial real estate lending is healthier than it has been for many years.
With Q2 ’15 data analysis now available, the Federal Reserve notes that commercial real estate loan delinquency rates have been in steady decline, implying a healthier economy and real estate market. The percent of CRE loans from banks with delinquent payments dropped to 1.2%, the lowest rate since 2006. In between these years, the delinquency rate climbed as high as 8.77%, during the major recession. There’s a great chart here, with a screen capture below.
New York, NY, August 14, 2015– iFunding, an online real estate market place that’s revolutionizing real estate investing, raised $1.27M within days of listing a new project in the metro Denver area on its platform. The capital was raised for the building and development of 12 townhomes that have been named Virginia Village. The property is located in an urban Denver neighborhood just south of Cherry Creek.
Virginia Village is located at 4400 E. Bails Place and 4401 E Jewel Avenue, Denver, Colorado. Collectively the property is 30,000 square feet. This property will have 12 urban townhomes. Marcus & Millichap 2015 Q1 reports the Denver metro area is poised to be one of the strongest apartment markets in the country.
“iFunding continues to provide the strongest investments and highest quality sponsors for our investors. This project is a testament to our goals and values,” William Skelley, Founder, Chairman, and CEO of iFunding states, “The quality of deals and sponsors on our platform has significantly grown this year along side the growth of our team. We are excited about what the future holds for our investors as well as our company.”
iFunding is a leading real estate crowdfunding platform, facilitating debt and preferred equity fundraising for properties range from multi-family residences and condominium estates, to apartment towers, hotels and resorts, single-family homes, retail locations, malls, offices, mixed-use buildings, and more. iFunding provides opportunities for accredited investors to invest in institutional-quality real estate deals, with a minimum investment of just $5,000. The company oversees deals throughout their lifespan, providing extensive information and transparency to give investors insight and oversight into their investments. It also generates financing for multi-project funds, and partners with family offices to co-fund opportunities with its individual investors. We offer flexible financing terms to real estate developers. Visit http://www.ifunding.co for more information, or connect with us on LinkedIn at http://www.linkedin.com/company/innovational-funding, on Facebook at http://www.facebook.com/iFunding , or via @inno_funding on Twitter. The phone number for investor and operator inquiries is 844-367-4386.
For the 2nd year in a row, William Skelley, CEO and Founder of iFunding, will be speaking on a panel at the Annual Crowdfunding Forum for Real Estate hosted by IMN. This year’s event will take place September 16th and 17th at the Fairmont in Santa Monica, California.
Skelley is founder and CEO of iFunding, the online, commercial real estate investment marketplace for accredited investors and institutions. He is responsible for business development activities at the company, which has financed over 35 real estate projects with total real estate value of over $400 million. William specializes in working with family offices. Prior to iFunding, he founded a boutique investment bank that underwrote $2 billion in real estate transactions, ranging from hotels/resorts acquiring hundreds of millions of dollars in financing, to mixed-use properties and single family homes. Earlier, William was a principal at Rose Park Advisors, a hedge fund founded by Harvard Business School professor Dr. Clayton Christensen, specializing in “disruptive innovation.” He has also worked at General Electric, Olympus and as an advisor to several start-ups. He attended Harvard Business School and Hobart College.
Skelley will be speaking on the panel discussing, ‘Evaluating the Expansion of & Economic Factors Behind the Growth of Crowdfunding’ along side other executives in the real estate crowdfunding industry.
iFunding will be meeting with developers and investors by request from September 16th through 17th. If interested, email firstname.lastname@example.org.
New York, NY – August 11, 2015 – Paula DeLaurentis, a senior marketing, financial services, and real estate professional, has joined iFunding as the Chief Revenue Officer. DeLaurentis will be expanding the company’s business development and marketing efforts by implementing a greater strategic focus and a personalized outreach to the real estate investment community.
DeLaurentis possesses over 20 years experience in marketing, financial services and real estate. Most recently, she was Principal at The Channing Group, an advisory and marketing organization that specialized in commercial real estate transactions for investor groups, banks and high net-worth families. Previously, Paula DeLaurentis served as CMO for Entitle Direct, a title insurance company; Managing Director at TDAmeritrade, responsible for Strategic Alliances and Investor Marketing; and VP of Product Marketing for Thomson Financial, serving the Institutional Equity and Wealth Management segments.
With DeLaurentis’ lead, iFunding has begun to expand its efforts to bring diverse deals to the real estate crowdfunding market. “Thousands of investors, as well as family offices and institutions are joining iFunding to participate in the strong returns possible with real estate crowdfunding. I’m excited to be joining a leader in this market. We recognize that our clients have different needs for information about real estate and different preferences for deals. Our platform will reflect that diversity by providing a range of high quality commercial investment opportunities, real estate industry and educational content, and customized interactions with investors, real estate developers and potential partners.” DeLaurentis commented.
With new strategies already in effect- During the first week of August alone, iFunding has listed over $5 Million in investment opportunities, “Our company has grown exponentially in the past year, increasing the size, volume and commercial sophistication of the deals we offer. We’ve also raised equity for our future growth and doubled the team. With Paula’s experience in real estate and with other financial products for high net worth individuals and institutional investors, as well as in strategic alliances, we’ll be able to engage all parties that are interested in real estate investing economy online.” William Skelley, CEO of iFunding, added.
iFunding is a leading real estate crowdfunding platform, facilitating debt and preferred equity fundraising for properties range from multi-family residences and condominium estates, to apartment towers, hotels and resorts, single-family homes, retail locations, malls, offices, mixed-use buildings, and more. iFunding provides opportunities for accredited investors to invest in institutional-quality real estate deals, with a minimum investment of just $5,000. The company oversees deals throughout their lifespan, providing extensive information and transparency to give investors insight and oversight into their investments. It also generates financing for multi-project funds, and partners with family offices to co-fund opportunities with its individual investors. We offer flexible financing terms to real estate developers. Visit http://www.ifunding.co for more information, or connect with us on LinkedIn, Facebook, or Twitter. The phone number for investor and operator inquiries is 844-367-4386.
There are countless books about real estate for an active property investor who is negotiating for acquisitions, overseeing refurbishments or managing an apartment building. However, there’s much less education available for investors participating financially but not becoming closely involved with the properties.
Investors in this “limited partner” role need education about:
In this blog, we recommend five books that are especially relevant to limited partners, whether they are about to invest with a partner in a local project, or online through an investing marketplace/crowdfunding site. The books are listed in order of easiest to most advanced reading.
People admit to liking the “Dummies” series about as much as they admit to liking the musical group ABBA, but let’s face it, the books get the job done. “REI4D,” as you’ll allow me to call this book, covers whether real estate investing is right for your situation; how to evaluate properties; what kind of supportive professionals you’ll want to work with; and much more.
For those who like to learn about an industry by reading about the ‘players’ in that industry, it’s hard to beat Donald Trump for big picture insights. This overview is written by his lawyer of 25 years. It’s actually the best Trump book to encapsulate principles for achieving a premium on a property and negotiating an arrangement to your advantage. The author also recounts some of their biggest property ‘scores’ from which they profited. A memorable and easy read.
Real Estate Investments Trusts generally are publicly traded securities that can be purchased through your broker, just like stocks. Each REIT holds large numbers of properties of a particular kind, which together generate profits for investors. Their unique characteristic is that at least 90% of their taxable income must be distributed to investors each year, making them high income-yielding assets. While they don’t provide the same hands-on approach of investing in a specific property, they can be useful to diversify one’s real estate portfolio. Ralph Block’s book covers the economic dynamics of each key RE sector – apartments, office, industrial, storage, mortgage and more. Understanding the sectors also can help you select investments through crowdfunding.
This book excels at combining case studies about different types of properties and how they perform, with key financial ratios needed to understand to find identify the strongest opportunities, and predict and monitor the properties’ investment returns. The same author penned another great financial book, “What Every Real Estate Investor Needs to Know About Cash Flow”.
Due diligence about the state of a property and the local real estate market is the foundation for successful investing. This book starts with basics then gets into a thorough listing of checkpoints. While a passive investor in real estate won’t need to perform all these steps themselves, they should feel comfortable asking the right questions and understanding for the answers about a property before investing.
Self-directed IRAs (SDIRAs) can be very effective with online investing to defer taxes on your earnings. This is a second interview by iFunding in our SDIRA series, focusing on selection of an IRA custodian. SDIRAs require that an IRA account holder use a custodian company to administer investments and generate tax reporting. We spoke with Michael McNair – Trust Officer at IRA Services Trust Company about how well this can work with real estate investing online.
Remind us how self-directed IRAs improve the after-tax returns on any investment, including real estate.
In some respects, self-directed IRAs are like any IRA. They defer or eliminate taxes on investment income. SDIRAs can be traditional, taxed-deferred IRAs – including SEP and Simple IRAs – or a Roth IRA. With a traditional IRA, a certain dollar amount each year can be contributed without paying taxes on that income, but eventually, after the participant reaches the age of 70 ½ , they are required to take a distribution each year. The participant will pay taxes on the amount distributed to them. With Roth IRAs, you pay taxes upfront on the contributions, but never pay on the income or growth on the investment, even when withdrawing the money.
The restriction with IRAs that are not self-directed is that you are limited to stocks, bonds and mutual funds. You cannot, for example, invest directly in real estate properties, limited liability companies, promissory notes, crowdfunding opportunities or precious metals. That’s where self-directed IRAs come in. They are especially suited for real estate debt investments, that is, loans to property operators or developers.
Consider that some real estate investment types can average returns that are in the double digits (e.g., over 10%) per year. You can perform quick calculations about your potential savings if you defer taxes on income and growth, or eliminate taxes on asset growth entirely with Roth IRAs.
How did IRA Services Trust Co., and you personally, get involved with SDIRAs?
IRA Services Trust Company originally administered limited partnerships for Wells Fargo. In 2008, we were granted a Trust Charter, which enabled us to act as a custodian of self-directed IRA accounts. Since 2008 we have grown the business from less than 15,000 to over 40,000 accounts. I’ve been with the company since 1995.
Note that some providers in the SDIRA market only are “administrators.” Administrators can perform administrative duties and reporting but need to work with a custodian that is allowed to hold title to investments.
How do fees work with SDIRAs? They must be designed to accommodate the smaller transactions typical of an investment in a crowdfunded property, correct?
You should look for a SDIRA custodian that offers a fee structure compatible with online real estate investing, or crowdfunding. In a traditional, direct property investment, the investor is likely to make one big investment upfront then have a variety of outbound payments or inbound income each month. With crowdfunding, many investors will only put up $5,000 to $20,000 upfront per asset, and receive monthly interest or a lump-sum payment at the end. Our fees at IRA Services Trust are crowdfunding friendly – $35 to set up an account online; $125 one-time to purchase an asset/property; then $100 per year to maintain the account and $80 per real property asset per year. There is a small charge for a wire, while ACH transfers don’t generate a fee [note that iFunding will accept investment contributions, and pay returns, via ACH].
So, the benefits of the SDIRA outweigh the costs?
Very often that’s the case, though it depends upon your situation. SDIRAs tend to shield taxes best on income-generating properties paid for in cash (without debt). The use of SDIRAs has grown exponentially over the past decade.
iFunding suggests considering this simple case: $15,000 invested in each of two real estate crowdfunded properties at the same time. They each have a target return of 12% after one year, or $3,600 total (2 x $15K x 0.12). The one-time fees to open and fund the investments would be $285 and the ongoing maintenance fees would be $260/yr. In this situation, the annual maintenance fees come to .5% of the assets and 7% of the income.
Next, you would make a calculation with respect to your marginal tax rate on the profit of $3,600. This represents the tax savings benefit of using an SDIRA. Many US investors’ marginal tax rate is 25% to 39%. If you calculate the taxes you would not have to pay with a Roth SDIRA, and net out the fees, you arrive at the economic benefit in this example. At the 39% marginal tax rate, the SDIRA would let you keep over roughly $1,000 more of your $3,600 gross profit versus investing with a taxable account (you would keep slightly less than $1,000 in year 1 with the IRA account, and somewhat more thereafter). This is equivalent to a 50% increase in your net profit per year by using the SDIRA.
What else are customers looking for in a SDIRA custodian?
The question about fees usually comes up first. A very close second however, is the helpfulness and promptness of the client service staff. You want to be confident that your custodian can process transactions quickly so that, for example, your real estate deal can close promptly with your available funds. You also want experienced staff that are readily accessible and care about the account holders’ questions and challenges.
At IRA Services Trust, we have 55 employees, many of whom have been with us for 10 to 15 years. We also offer a special Concierge Service, for investment advisors and investment providers who want a single point of contact and often want transactions to be expedited.
How long does it take to set up an SDIRA?
The primary determining factor is where the funds are coming from. One can make a new IRA contribution, roll over funds from a qualified plan (401k, profit sharing plan, etc), or transfer funds from an existing IRA. Making a contribution to fund an IRA is very quick, but it is limited to $5,500 (under 50) or $6,500 (over 50) per year. If you are moving funds from an existing IRA to an SDIRA, the timing depends on how quickly the custodian will process the request. It is our experience that it will take from one to two weeks. In either case, it’s fair to say, a typical set-up time may be a week, but leave a buffer if you have an important investment to fund with a firm deadline.
If you are investing in what’s known as a Reg.D/506(b) investment (ask your real estate investing platform about specific property offerings), then there can be a “cooling off” period after you sign up and before you can invest. The period is intended to protect the investor by reinforcing the need to learn about the offerings and build a relationship with the issuer. This can be perfect timing to establish your SDIRA.
One more note is, that with 401K plans, some employers do not allow plan participants to transfer funds while they remain active employees.
What related services does IRA Services Trust offer?
Our systems are set up so that we can work with a crowdfunding platform to capture and securely share basic SDIRA account set up information from the platform’s website. Alternatively, a visitor to the crowdfunding site can be easily directed to a custom landing page on our site to start the account set-up and account funding processes.