Passive income with crowd sourced rental real estate

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yadbugee
Posts: 22
Joined: Sat Jan 19, 2019 8:40 pm

Passive income with crowd sourced rental real estate

Post by yadbugee »

Anybody has a experience in crowd sourced rental investment firms like arrived homes specifically or similar investment options. Would you recommend to invest 5-10K over a period of 2 years for long term (7-10) years
Sourc3
Posts: 159
Joined: Wed Aug 05, 2015 4:45 pm

Re: Passive income with crowd sourced rental real estate

Post by Sourc3 »

I put in some trivial amount with them. If you look at the management fee and the upfront transaction cost, you’re losing about 7-8%. So it’s not the most optimal way to make money as a landlord and you use 0 leverage (if you were to get a rental with a mortgage). So why did I invest at all? I want to get a better sense of vacancy rates and know the markets better. It’s a lot more reliable than reading forums like bigger pockets or Reddit I am still torn between REIT for the liquidity or the crowdsourced model as both have pros and cons. I will make a longer term decision to invest more substantial amount in the next 6-9 months once I get a better sense of distributions, taxes, etc.
Topic Author
yadbugee
Posts: 22
Joined: Sat Jan 19, 2019 8:40 pm

Re: Passive income with crowd sourced rental real estate

Post by yadbugee »

Thank you for your reply. My understanding their vacation rentals are not treated as REITS but single family homes are. I am trying to stay away from Reits andnk1 form as much as i can. What is expectations with the tax treatment you will get ?
Logan Roy
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Joined: Sun May 29, 2022 10:15 am

Re: Passive income with crowd sourced rental real estate

Post by Logan Roy »

I'm surprised there isn't a little more pessimism over real estate as an asset class – I think it's absorbed a lot of debt that's piled up in the system; I think it's outpaced inflation for a bit too long; and *if* rates have to go a little higher than they are (which may be a coin toss on sticky inflation), it strikes me there could be quite a bit of downside with defaults.

BlackRock's Capital Market Assumptions don't paint a particularly cheery picture for Real Estate – presumably with the prospect of tightening causing cracks in the economy and lending. It doesn't strike me as an asset class that's looking particularly 'cheap' yet. That's just me. I think the reason it's not talked about a bit more is how much skin in that game most of us have.

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Valuethinker
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Joined: Fri May 11, 2007 11:07 am

Re: Passive income with crowd sourced rental real estate

Post by Valuethinker »

yadbugee wrote: Sat May 27, 2023 5:17 pm Anybody has a experience in crowd sourced rental investment firms like arrived homes specifically or similar investment options. Would you recommend to invest 5-10K over a period of 2 years for long term (7-10) years
Almost certainly not:

- illiquidity
- often quite high fees - managers are not necessarily aligned w investors
- lack of transparency
- lack of control by outside investors

Breaks all the rules for an investment in a private company or business.

In a venture capital situation one has the possibility of high returns. Likelihood of returns of 0, but possibility of hitting it out of the park. A lottery ticket in effect. But in the situation above?
minimalistmarc
Posts: 1632
Joined: Fri Jul 24, 2015 4:38 pm

Re: Passive income with crowd sourced rental real estate

Post by minimalistmarc »

I have a lot of experience in U.K. P2P/crowdsourced property. Fortunately I panicked at the right time and liquidated at heavy discounts. Got out with a small profit. The panic was due to the governance of the “reputable”
companies I was investing with, and in hindsight I was very lucky.

I personally will never touch it again, and strongly recommend avoid it to anybody else
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