Investing in Shares of Real Estate with Landa
Landa is an equity-sharing proptech startup platform that enables you to invest in real estate with just $5. It's a win-win situation for both the homeowner and the investor. The idea behind the Landa startup is to make Real Estate Investing a more affordable option by providing people the opportunity to buy property shares as opposed to the entire property itself. They divide properties into shares so that anyone can get started.
The company offers investors the opportunity to buy shares in the equity, monthly income, and potential appreciation of any property they choose. Investors can participate in potential appreciation and the monthly payment of owning rental properties.
Shares of a Property in an LLC
When you invest in real estate with Landa, you're actually purchasing stock in an LLC that manages a single rental property.
With this purchase, each share you own entitles you to that "pro-rata" portion of the profit made by the LLC. The profit your shares earn you will be directly deposited into your Landa account.
An LLC that manages a Single Family Property will have a total of 10,000 shares.
An LLC that manages a Multi-Family Property will have a total of 100,000 shares.
The break up of these shares is done to keep the shares reasonably priced to expand access to property investment.
You will be able to share a portion of that LLC's profits with each share you purchase. And suppose you are thinking of investing in entire properties (by buying all of the shares) without the headache of sourcing, leasing, and management. In that case, you will receive 100% of the profits generated by the LLC's assets.
Types of Properties
If you go into the Landa App, they currently have properties available for sale in multiple cities in Georgia. (Jonesboro, Forest Park, Stockbridge, Griffin, and Douglasville). And they recently just cracked a massive milestone by expanding to another state as they launched numerous properties in Brooklyn, New York. In addition, their newest market is launching over the next few months as they tap into Florida with targets to bring on properties in Orlando, Tampa, and Jacksonville.
As for the type of properties listed on the Platform, most of the properties in Georgia are Single Family Homes, but when going through their offerings, I noticed that they also have a few Townhouses in Georgia with 2-4 units. In Brooklyn, as you would imagine, all the properties on the app are Multi-Unit Properties.
There is a good mix of properties on the Platform, and as they bring on more properties, I predict that they will continue to expand this mix. And that is a good thing because investors, like myself, will be able to mix and match properties and locations to build up a more diverse portfolio of Real Estate Shares.
Sourcing, Leasing, and Management
The big questions you are probably thinking about now are: How does this work? And, doesn't owning real estate typically take much time, effort, and money?
Landa's website quotes: "We handle the heavy lifting so you can sit back, relax, and watch your portfolio grow." And what they mean by this is that they will handle the sourcing, the leasing, and the maintenance of the property so that the shareholders don't have to.
The Acquisition Team at the Proptech company finds the best properties in growing real estate markets nationwide. Once these properties are sourced, they are purchased and financed by Landa.
Once the property is brought onto the Platform, the leasing portion of the process begins, and the rental process is streamlined. This is done through the Landa Resident App.
The Landa Resident App is where residents of a Landa property will handle everything property-related. This includes: reporting maintenance problems, signing the lease, reporting other issues, and paying the rent- All from their phone!
Local Landa Management teams handle maintenance. These teams listen to Resident reports and conduct routine maintenance so that the property keeps in shape.
Landa handles all the typical barriers to entry associated with real estate investing so that investors don't have to. They keep the headache of owning typical real estate out of the equation so that all you have to do is invest and collect rental payments directly deposited into your account.
Side: Use this link to sign up; When you connect your bank account, we both get a Free Share.
Gaining on the Appreciation of the Share and the Monthly Income
When you purchase shares in a property with Landa, you are eligible to receive monthly dividend payments on the portion of shares that you own. For example, if you own 1,000 shares (or 10%) of a single-family property, you are entitled to 10% of the monthly dividend payment generated by that property. To simplify the math, if that same property profits $1,000/month, you are entitled to $100 of that monthly profit. That $100 will be directly deposited into your Landa account.
Now say you purchased those shares on January 1st, 2022, for $5 per share. But it is now August 2022, and you want to sell those shares. If your shares are now worth $5.50 per share on the Landa Marketplace, you are now profiting from the appreciation of those shares also!
Some properties on the Landa App don't yet have Residents living in them, meaning that shareholders are not receiving monthly dividends from their shares. You can take the risk of purchasing these shares of properties with no Residents in the hopes that they get Residents soon. Because shares of properties that already have Residents cost more than shares that don't yet have Residents, this strategy could get you a better price on the shares that you will be able to collect in the future. Or you can use this strategy to sell the shares once a Resident is found and they appreciate in value.
Another thing that I like about Landa is how transparent they are with each of their property offerings. They provide the investors with information like the purchase price, the rent collected, information about the loan, including amount and interest rate, property map and photos, and how much the exact cost is for monthly insurance, property tax, and management fee. They provide documents, including the complete lease the Residents have signed and how long they have been in the property.