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Multi-Family and Apartment Investing

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Bon Osonwanne
  • Investor
  • Scottsdale, AZ
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List of Real Estate Syndicates in US

Bon Osonwanne
  • Investor
  • Scottsdale, AZ
Posted Oct 17 2019, 19:36

I'm building a software product that is An investing platform for passive income from real estate as a sponsor:

Smallplex which lets you own fractional shares in a portfolio of cash-flow generating multi-family properties.

I am curious to see whether other syndicators can benefit from utilizing the same product for their syndicates.

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Bjorik Mutize
  • Real Estate Broker
  • Minneapolis, MN
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Bjorik Mutize
  • Real Estate Broker
  • Minneapolis, MN
Replied Oct 17 2019, 20:31

Awesome. Is this kind of like a crowdfunding platform?

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John Corey
  • London
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John Corey
  • London
Replied Oct 18 2019, 12:17
Originally posted by @Bon Osonwanne:

I'm building a software product that is An investing platform for passive income from real estate as a sponsor:

Smallplex which lets you own fractional shares in a portfolio of cash-flow generating multi-family properties.

I am curious to see whether other syndicators can benefit from utilizing the same product for their syndicates.

Bon, the software side is not that big of a challenge. Being able to legally operate a collective investment scheme is the harder issue. How do you expect the regulations would be addressed?
 

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Bon Osonwanne
  • Investor
  • Scottsdale, AZ
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Bon Osonwanne
  • Investor
  • Scottsdale, AZ
Replied Oct 18 2019, 13:26

@John Corey I am only looking at US investors and syndicates. Filed SEC Form D under Rule 506(b) for my syndicate. Up to 35 investors. The software will be beneficial to my syndicate, after it goes live to showcase portfolio and returns, and possibly enable others to see what they are joining including the performance of the portfolio and disbursements to date. Other software products such as Juniper Square start at $10k price-point. Easier for me to build mine, since I have a software background. Will then look to launch the product for other syndicators after I've piloted it for my syndicate.

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Bon Osonwanne
  • Investor
  • Scottsdale, AZ
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Bon Osonwanne
  • Investor
  • Scottsdale, AZ
Replied Oct 18 2019, 13:38

@Bjorik Mutize It's not crowdfunding per se that is open to anyone publicly, or even for only accredited investors. There are different ways to structure a syndicate. Mine is under SEC Rule 506(b) and starts at $10-15k to join for up to 35 members (e.g. friends). We invest in multi-family rentals in the $40-50k price range in the Midwest US. The online platform will have member-only views however those interested can see returns of properties in the portfolio. 

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Bon Osonwanne
  • Investor
  • Scottsdale, AZ
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Bon Osonwanne
  • Investor
  • Scottsdale, AZ
Replied Oct 18 2019, 13:40

My strategy is to acquire cash first, and then use blanket-loans for leverage (e.g. 500k on 10 properties).

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John Corey
  • London
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John Corey
  • London
Replied Oct 19 2019, 07:20
Originally posted by @Bon Osonwanne:

@John Corey I am only looking at US investors and syndicates. Filed SEC Form D under Rule 506(b) for my syndicate. Up to 35 investors. The software will be beneficial to my syndicate, after it goes live to showcase portfolio and returns, and possibly enable others to see what they are joining including the performance of the portfolio and disbursements to date. Other software products such as Juniper Square start at $10k price-point. Easier for me to build mine, since I have a software background. Will then look to launch the product for other syndicators after I've piloted it for my syndicate.

Thanks for explaining.er. 

As it happens, I started out as a software developer in the 1980s. I started investing soon after.

What you will need for your investor community will be a lot easier than building a product which can be sold to others. Supporting customers, marketing and similar can be expensive compared to having an in-house tool. 

Good luck either way. Well done on making sure you are SEC compliant.

BTW, I am a USA investor. Since 1983. And UK. I commute.

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Taylor L.
Pro Member
  • Multifamily and Self Storage Investor
  • Richmond, VA
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Taylor L.
Pro Member
  • Multifamily and Self Storage Investor
  • Richmond, VA
Replied Oct 20 2019, 08:02

@Bon Osonwanne you should check with your securities attorney about whether posting about this on BP is compliant with your 506(b) exemption.  Even your post about buying $40-50k rentals could be considered conditioning the market, if not a straight up violation of the no public solicitation requirement.

@Mauricio Rauld? Your thoughts?

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Mauricio Rauld
  • Syndication Attorney in Newport Beach, CA
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Mauricio Rauld
  • Syndication Attorney in Newport Beach, CA
Replied Oct 21 2019, 07:23

@Taylor L. @Bon Osonwanne Looks like Bon is talking about and asking about the creation of a software platform he is creating.  So long as not soliciting investors for that, looks to be ok.  Bigger question is whether strategy above to have pw protected site for non-accredited.  Just make sure you are complying with Citizen VC. I did a video on that in YT channel about how to take a complete stranger and establish a substantive relationship.  Over 1K views if you are interested.  Hope this helps.

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Alina Trigub
Pro Member
  • Rental Property Investor
  • Glen Rock, NJ
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Alina Trigub
Pro Member
  • Rental Property Investor
  • Glen Rock, NJ
Replied Oct 21 2019, 08:36

@Bon Osonwanne

Looks like your immediate question has been addressed. Hope you're looking into the security of PII in case you plan to store investors' information in your app!

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Tj Hines
  • Specialist
  • Tampa, FL
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Tj Hines
  • Specialist
  • Tampa, FL
Replied Oct 21 2019, 13:26

@Bon Osonwanne this sounds like a crowd funding platform. Not sure if there's a huge need for that in the marketplace as there are quite a few reputable commercial crowdfunding platforms out there. I believe Realty Mogul is the top and best one considered by all syndicators who are looking to raise funds in this manner.

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Amy Wan
  • Attorney
  • Los Angeles, CA
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Amy Wan
  • Attorney
  • Los Angeles, CA
Replied Oct 21 2019, 22:35

Agreed that there are many white label products out there

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Joel Owens
  • Real Estate Broker
  • Canton, GA
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Joel Owens
  • Real Estate Broker
  • Canton, GA
ModeratorReplied Oct 21 2019, 22:44

I looked at building my own platform and then after the cost involved and time to get it built you have to constantly service it, add to it, and update it.

I decided to use a platform similar to Juniper.

Smaller syndicators might use an unknown platform just created because it might be a step up from their excel spreadsheets but mid to larger size syndicators do not typically want those platforms. They would rather pay bigger money for established and already proven platforms.

I found building the platform wasn't as intensive as keeping it going. Some developers will develop for cost almost if they get a profit share on the back end when the systems get sold with memberships. Problem is they want a full business plan and vision to be sold on doing things for cost upfront. It's just too much time and headache involved to deal with it.

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Bon Osonwanne
  • Investor
  • Scottsdale, AZ
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Bon Osonwanne
  • Investor
  • Scottsdale, AZ
Replied Oct 22 2019, 09:17

@Joel Owens Exactly right. The product is for small syndicators like myself that cannot afford to shell out the $10k for white label software like Juniper Square, CrowdStreet or Groundbreaker. I have some software background and have built web apps / sites on Python Django web framework (which some of the others use). So for me, it's much cheaper to build than to buy. If it works out well for me, it could be worth it to open it up as a multi-tenant SaaS product.