Investing in Real Estate via Stocks

5 Replies

One way I've been considering lately to invest in Real Estate is through AppFolio stock. 

Stock price: APPF (NASDAQ)

Many BP members are probably familiar with AppFolio. They're a common property management platform that many people seem to use and like. I do not own the stock currently, but am considering purchasing. With the market really tight for great deals I'm trying to brainstorm other ways to make money in real estate. The transition from paper based management to cloud based digital management seems like a great opportunity. 

Anyone have any thoughts on AppFolio as a customer or investor?

Best,

Adam

@Adam Rey    Have you thought about a REIT? I don't know a lot about them myself, but I understand they work similarly to a mutual fund. But instead of stocks, the fund invests in real estate. You might want to check with your financial advisor to see if it's an option.

Yes, if you feel that you're struggling to find good deals on your own, it may make sense for you to invest with larger investors who presumably have access to top deals. Just make sure you vet them first.

Definitely am familiar with and invested in REITs. However with them having a huge run for a straight decade, interest rates rising, and valuations looking stretched I would like an alternative. With AppFolio potentially property managers may keep switching even if the market tanks because it’s just way easier to use online software than paper.

Really curious if anyone has an opinion as either an investor in AppFolio or is a user of their software.

You aren't investing in real estate by investing in ancillary businesses that services the real estate market. 

I would look at syndications by proven operators in growing markets.

Some quick advantages of RE, specifically investing in a syndication, over owning common stock: Sheltered cash flow, scale, preferred return of at least 8% (sheltered!), leverage, relationship with the operator (I can pick up the phone and call the sponsor of a deal, you'll have a harder time getting a CEO of a public company on the phone), better returns (almost always beats the S&P composite). 

The major disadvantages being: Liquidity, less flexibility (can't short, sell options, etc). 


  @Spencer Gray I couldn't agree more.

I ended up in real estate, and syndication specifically for exactly the reasons you outlined. I knew real estate was a vehicle I wanted to use and, at the time, I did not have the time or resources to build a team and do it myself. Syndication allowed me to get the returns I wanted in the investment I wanted, and I loved being able to speak directly to the people in the deals. So much so that I work for/with them now!

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