The Real Estate Crowdfunding Review May 2019 Update
Updated: Apr 2, 2020
Comprehensive review of Broadstone Real Estate Access (BDREX); updated non-accredited guide to choosing funds; new feeder; latest news.
(Usual disclaimer: I'm just an investor expressing my personal opinion and not a registered financial advisor, attorney or accountant. Consult your own financial professionals before making any financial decisions. Code of Ethics: We do not accept any money from any sponsor or platform for anything, including postings, reviews, referring investors, affiliate leads or advertising. Nor do we negotiate special terms for ourselves in the club above what we negotiate for the benefit of members.).
Broadstone Real Estate Access (BDREX) Broadstone Real Estate Access (BDREX) is a unique 3-strategy fund that offers both nonaccredited and accredited investors access to a diversified commercial real estate portfolio. Each strategy is held in a different "sleeve" of the fund: institutional real estate funds, directly owned real estate and public market real estate equities. Fees are rock-bottom and lead the industry. Investors can redeem quarterly, and minimums are low at $2500. This is an especially nice perk since some of the funds in the institutional sleeve normally require $1 to $5 million to access. I suspect this combination of features alone will be enough to make some investors want to pull the trigger. Unlike virtually all other closed-end funds (including BREIT), you don't have to find (nor pay) a broker to access BDREX. Also, there are no minimum income requirements (again unlike BREIT and many other closed-end funds). On the minus side the fund is relatively new (started in October 2018) and the directly owned real estate sleeve is not yet funded. So currently the fund is overweight in the public markets sleeve at about 50%. This may also raise some question marks for those investors who are in real estate to escape public market correlation and volatility. Very early in its life, BDREX hadn't funded its real estate sleeve, and appeared to be highly susceptible to that volatility. However, in a more recent market downturn it held completely steady, which may indicate that it's now much better insulated. (Read more...)
Which real estate crowdfunding fund should I pick? A step-by-step guide for the every-day, non-accredited investor. Updated with the latest info, including BDREX. (Read more...)
Private Investor Club Updates
(Membership in the club is free, but requires verification that the investor has no ties to platforms or sponsors. New members can apply here.)
Club-only Feeder Fund Updates
Feeders allow club members to access funds that significantly lower minimums than direct investment. They can also offer better diversification and simpler taxes.
This is a diversified multi-fund feeder-fund that invests in:
Broadstone Net Lease: A conservative triple net lease fund with conservative leverage, an investment grade rating, and full cycle experience with no investor money lost.
A value-added multifamily fund with conservative leverage, high skin in the game and claims multiple cycle experience with no investor money lost. Plus 1031 exchange option to all investor to avoid paying taxes via “defer, defer and die”.
A hyper local focus sponsor that does value-added commercial real estate in Los Angeles and has audited results showing multiple cycle experience with no investor losses. (More...)
Grubb Properties Feeder fund (upcoming 2nd and final closing) Diversified office and multifamily value-added and development fund in the SouthEast with unusual add-on strategy. Sponsor has multiple cycle experience with only 2 deals with lost principal.Target total return in the mid teens.| (More...)
News and Analysis
Crowdfunding firm Prodigy is broke, former exec claims in defamation lawsuit. Complaint by ex-COO Vincent Mikolay alleges crowdfunding platform has “cash difficulties” https://buff.ly/2W3Pwoz