When it comes to investing, real estate tends to be one of the most lucrative options. But, let’s be honest. Real estate is expensive and property prices just keep getting higher and higher during the pandemic. Many people now assume that investing in real estate is out of reach but that may no longer be the case thanks to a new tech start-up, addy. For as little as $1 (plus the $25 annual fee), you can invest in real estate. Interested? Read my addyinvest.com review for the full details.
How does addy work?
While the idea of real estate investment being accessible to all sounds great, how does it actually work? The process can be broken down into 3 steps.
Step 1: addy will identify a real estate investment opportunity. The addy acquisitions team, investment committee, and Board of Directors (which all have plenty of experience in the real estate industry) make the investment decision.
Step 2: addy then divides the investment into $1 increments. So, for example, a $500,000 investment would then be 500,000 units each valued at $1.
Step 3: Those $1 units will then be sold on the addy platform. Investors can decide how much they would like to invest. They can choose to invest as little as $1 or go up to $1,500.
How much does addy cost?
addy has two membership types. Charter members pay $25 a year and gives you access to all properties. There’s also a Believer membership that’s $500 for 5 years which gives you some extra perks.
As for how much you can invest, as I mentioned above, addy allows investors to invest as little as $1 or up to $1,500 per property. The $1 minimum is to help remove any investment barriers and they have placed a cap on investment amounts in order to enable more investors and keep it accessible. If you would like to invest more, you can choose to invest in more properties.
When you do choose to invest, there are GP (General Partner) fees. The General Partner is the group responsible for finding the property, managing it and focused on the outcome. The fees a GP charges include:
- Asset management fees
- Acquisition fee
- Management fee
- Mortgage guarantor fee
These fees will vary depending on the property and are broken down within the Offering Memorandum that addy provides. The offering memorandum (OM) is the document that addy has pulled together that summarizes the details of this investment opportunity.
How do I make money with addy?
There are two ways to make money with addy.
The first is by the sale of the property. In this case, when the property is sold any appreciation is divided up and paid back to the investors on top of the original investment principal.
The second way to make money with addy is via rental income. When the tenants of the property pay rent, any excess cash flow is distributed among the investors.
As mentioned above, each property has an offering memorandum (OM) which will provide the details of how this works for each specific investment property.
How do I get started with addy?
Ready to get started with addy?
Visit the addy website here and go to ‘Invest Now’. You can read up on the different properties, look at photos, compare risk which ranges from core (conservative) to opportunistic (high risk), learn about the return schedule and more. When you decide which property you are more interested in, you can click the orange ‘Invest Now’ button. If you haven’t signed up for an account yet, you can do that next. If you already have an account, you will be asked to log in.
Once you have your account set up, have funded your wallet and are logged in, you will be presented with several due diligence documents as well as the offering memorandum (OM). When you have gone over all of this information, you will need to move your funds over from your addy wallet and sign. Once this is completed, you are considered an investor in the property.
addy also has a referral program so you can sign up via a friend if they’re already invested. Once you have your account, you can start referring people. Referring people earns you credits which can then be used to redeem for things such as swag, a mystery box, and even $2,000 in travel credit.
What is addy?
addy operates under the tagline ‘real estate for everyone’. Their goal is to provide an opportunity for everyone to get into real estate. To experience homeownership without having to also then struggle with the life-altering sacrifices that come with homeownership. Essentially, addy wants you to be able to have a life, enjoy that life, and still be able to afford to invest in real estate.
CEO and co-founder Michael Stephenson got into real estate investing in 2003 and he and his family have reaped those benefits. He recognizes that in the current economic climate, young people face more barriers than he did and, with the help of addy, he hopes to knock some of those barriers down and make real estate investing accessible to all regardless of income, age, or other conflicts.
Michael Stephenson and his co-founder, Stephen Jagger, realized that part of this issue was the lack of technological innovation in this field. So, they created addy, a technology platform that, in their own words, ‘seamlessly facilitates thousands of investment transactions into real estate deals previously unattainable to an ordinary investor.
What kind of addy real estate properties am I investing in?
addy is not a real estate investment trust (REIT) which means that the properties they choose and purchase are identifiable. You can see the address. You can drive by and take a look. Everything is transparent- you pick the properties that you are interested in investing in. You can take a look at current available and past investment properties here.
Can I sell my property to addy?
The addy acquisitions team is actively looking for a variety of property types for real estate investment purposes. You can learn more about what addy looks for when buying a property as well as the process on this page. If you want a more traditional selling experience, you could check out Properly.
Where is addy available?
At this time, addy is only available to investors in three provinces: British Columbia, Alberta, and Ontario. They hope to expand to investors across other provinces in the future. However, your province of residency does not affect where you can invest. You can live in Ontario and invest in Vancouver properties.
Curious where your province stands? Check out this page to learn more about how to unlock your province.
Is addy safe?
You have to treat addy like any other investment; it’s not safe but it’s also not dangerous. It is worth noting that addy is a co-owner in each property, so it’s in their best interest to make the smartest possible decisions. Not just to keep customers happy, but also to benefit themselves as well.