Commission And Fees
82%
Customer Service
89%
Ease of Use
92%
EquityRoots

EquityRoots

Pros

  • Special area of expertise
  • Browsing of present and past investment information with no registration
  • No direct investor charges
  • Site suggests that Reg A+ deals will be available to investors who are not approved

Cons

  • High min. of over 15k USD
  • Small range (1 available bid as of this date)
  • Restricted track record (only two ventures listed as financed)
  • Wide set of contract documents for analysis

Overview

They were founded in 2014, have two funded projects and one open offering.

Forms of Investment

EquityRoots provides debt and equity investing in hotel real estate, although no debt investment is offered for now (and the lone equity investment is projected to have a pretty long holding time of a decade). Although the details vary by project, a typical unfolding of events seems to be that an established hotel operator wants to offer money for constructing via a combo of lending obtained from banks and funding with the help of more people through EquityRoots.

EquityRoots' hotel real estate listings are more nuanced than the majority of other CRE's, partially due to the revenue sources being more diverse (room charges, food, drinks. and so on) and more volatile relative to annual apartment rentals or longer commercial leases. Investors with info of the hospitality sector and/or the future movements of the economy are in the better position of assessing the firm's offerings.

What does an investment with this company bring you?

When investing via the company, just like with other crowdfunding investment sites, what you get is a stake in an investment-specific LLC which actually has the debt interest in the real estate. With every investment you make via EquityRoots, you will get another K1 at tax to disclose your stake of the profits (if any) earned by the LLC.

How the company makes money?

The company doesn't require money from investors directly. They charge specific charges (usually $100,000-$255,000) to issuers. It would be smart for the prospective investors to go through the proposal documentation in depth and ensure that they comprehend how the issuer gets money – for instance, in once case the investment LLC gets the money to the issuer in a form of a development charge of one percent of the overall development prices, a 3.5 percent of property maintenance charges (paid each month), a "loan acquisition" and a "loan guarantee" fee. Obligatory financials tend to provide positive gains on all of these payments.

Possible Returns and Cash Flow

The only present and past listings that appear on the site are investments for equities with pretty long holding times (five to ten years). Most have a forecasted IRR of 20-26 percent, counting in a combination of annual dividends and a share of the proceedings on selling or refinancing of the land. Investors have to check the tender documents in depth to ensure that they comprehend how much it will take before the venture is finished if it is new, because any payments are contingent on the hospitality structure earning profits.

It would be smart of the investors to check the investment LLC membership agreement to ensure that they comprehend how the LLC can purchase investors prior to any refinancing event or real estate selling.

Scope of the Offerings

There's one available investment on their website for now and another coming soon. The first 2 were hotels in Schaumburg, Illinois (where the firm is located), and the new and future ventures are in San Antonio, Texas, and Lexington, Kentucky.

Regulatory Structure and Standards for Due Diligence

The firm doesn't mention any connection to a broker-dealer. To date, projects have been provided via SEC Reg D and are therefore restricted to approved investors, although their website says that they also want to provide some Reg A+ projects that will be available to all.

When underwriting and due diligence are concerned, it's beneficial to get better clarity beyond fairly generic description that say (or don't say) that pre-screening of each of their issuers is done to ensure that all products on the platform are valid. They ask that all offers contain a significant amount of detail in order to help make informed investment decisions. Moreover, they ask each issuer to identify all investment uncertainties and chances.

EquityRoots main features and highlights

Bottom line
In the broader investment crowdfunding categories (such as real estate, angel investment, and online lending), niche players are emerging with an even narrower focus to carve out a corner of the market. For example, some real estate platforms only operate within a particular geography, and some start-up funding platforms only provide investment within a particular industry. EquityRoots joins the Hotel Investor Reg D network to target hotel investment.
Fees: 7%
Min Deposit: $15000
Target returns: 8-24%
Sectors:
  • Niche platform offering equity and debt investments
Play Video

Leave a message to EquityRoots

Reviews

Review Box 0
{{ reviewsOverall }} / 5 Users (5 votes)
Rating4.8
What people say... Leave your rating
Order by:

Be the first to leave a review.

Verified
{{{review.rating_comment | nl2br}}}

Show more
{{ pageNumber+1 }}
Leave your rating

Your browser does not support images upload. Please choose a modern one

More Companies