Is reAlpha a good investment?
/If you are looking to invest in real estate with little money, reAlpha may be the perfect solution for you.
reAlpha utilizes an exclusive algorithm that makes it possible for you to make money on Airbnb without owning the property outright. You have the rare opportunity to invest in reAlpha during their current equity crowdfunding raise that closes on December 8.
But, is reAlpha a good investment? Keep reading to decide for yourself.
Is reAlpha a good investment?
reAlpha, a rising startup, is on a mission to give everyone the opportunity to generate income from real estate investing. Using exclusive AI technology, the company is tapping into the $1.2 trillion short-term rental market and making it possible for you to make money on Airbnb without owning property.
How to make money in real estate
Real estate investing has been a reliable strategy for building wealth in the United States, but the barrier to entry has become increasingly difficult to overcome. Investment properties usually require a 25% down payment and enough cash on hand to cover the cost of renovations and repairs. In some situations, purchasing an investment property could take tens of thousands to over $100,000.
Enter reAlpha, a platform where you can purchase shares of a short-term rental property for a fraction of the price of buying an investment property outright.
The boom in demand for short-term rentals
The short-term rental market has skyrocketed over the last several years and it does not appear to be slowing down. There are over 10 million short-term rental properties globally between Airbnb and VRBO. In total, the global short-term rental market is valued at $1.2 trillion.
The demand for short-term rentals surged by 25 percent between 2019 and 2021. Airbnb continues to report that short-term rental demand continues to outpace supply. The average rate for an Airbnb rental in 2022 was about $160 a day during the first quarter, a rise of about 35 percent over the same period in 2020.
Airbnb reported that hosts earned a record $34 billion in 2021, with the typical host earning $13,800 a year - an increase of 85% over 2019. With reAlpha, you can now add Airbnb host as a side hustle without the cost of owning and maintaining the property. The platform makes it possible to invest in real estate with little money and invest in Airbnb without owning property. Its revolutionary digital platform makes investing in short-term rentals as easy as buying a stock on an app.
reAlpha’s business plan has caught the attention of investors who see a bright future for its platform. reAlpha recently secured $200 million in credit to build out its portfolio of companies. This is one of the largest financing deals in short-term real estate history. A few weeks later, reAlpha closed a $40.8 Million Equity Deal for Acquisitions via a joint venture with Singapore-based asset management firm, SAIML. With this leverage, the joint venture expects to acquire up to $200 million in vacation rental properties in California, Arizona, Tennessee, and Florida.
How it works: Fractional real estate ownership
reAlpha utilizes an exclusive algorithm, called reAlphaBRAIN, to analyze thousands of investment properties. The analysis determines the property’s revenue potential on Airbnb. Some of the factors it assesses include crime rates, Airbnb occupancy rates, nightly rate, rent readiness, restaurant proximity, and walkability.
Each property is assigned a score and then, reAlpha's expert internal team conducts a final assessment. If the property makes the cut, reAlpha will purchase it and list the property on the investment marketplace for reAlpha members as well as on short-term rental sites for guest bookings.
reAlpha uses a fractional ownership model on its investment marketplace. In this case, fractional ownership means that reAlpha retains up to 51% ownership in each of its properties, while the remaining 49% is split up and made available to members.
Other technology platforms that have created a successful business model using fractional ownership include Robinhood which seeks to democratize stock investing and Masterworks which makes art investing accessible to the masses.
With the power of machine learning, advanced algorithms, and automated management, reAlpha is making it possible for everyone to invest in short-term rentals without the hassle of owning or maintaining properties. If you’ve been researching how to rent on Airbnb without owning property, reAlpha could be the perfect solution for you.
Cash in on the market and become an investor in reAlpha
In addition to the short-term rental investment opportunity, reAlpha has made it possible for you to invest directly in its company. By becoming a shareholder before December 8, you will join over 24,000 people from more than 80 different countries around the world who are in the process of owning shares directly in reAlpha.
As a shareholder, you will own a slice of their entire vacation rental portfolio company and key technologies like the fractional ownership platform itself. Additionally, investors can also stay in any reAlpha-owned Airbnb property for free. The number of free stays is based on how much you invest.
Investors also get to be a part of reAlpha’s reImagine fund. The mission of the fund is to create economic and real estate opportunities for underrepresented populations. reAlpha’s parent company is matching 2% of every investment and putting the money aside into the reImagine fund.
Investing in startups, like reAlpha, used to be reserved exclusively for venture capital funds or for accredited investors until Regulation Crowdfunding (also known as equity crowdfunding). The Securities Exchange Commission (SEC) defines an accredited investor as someone who earned more than $200K in the last couple of years (or $300K combined with a spouse). Or someone who has $1M in net worth, excluding their primary residence.
Investing in startups is highly risky. And highly illiquid -- in other words, you likely won’t have access to your cash up for a number of years. It’s a long game. But Regulation Crowdfunding provides an opportunity for ordinary people to participate in the wealth that fast-growing startups are creating.
Is reAlpha a good investment?
If you’re wondering, “should I invest in reAlpha?”, at Money & Mimosas we encourage you to ask yourself three questions:
What are the potential roadblocks or downsides?
What is the potential growth or upside?
How does this investment align with my values and/or overall investment strategy?
The biggest potential roadblock is reAlpha’s balance sheet. The startup is carrying a lot of debt between the credit line and the number of properties it currently owns, and will purchase in the future. One of the reasons why Airbnb has thrived is because they do not own the properties outright which means its expenses are relatively lean. As with all investments, only time will tell how reAlpha will manage this area of the business.
There are several potential upsides. In the current economic climate, high inflation and high-interest rates are making it tough for real estate investors to generate a solid return unless they are operating at scale and/or have deep pockets. Therefore, a platform such as reAlpha can be a good option for an investor who is seeking a cash flow opportunity but does not want to float the cost of maintaining the properties. reAlpha is a way to make money on Airbnb without owning property. Its platform makes it possible to invest in real estate with little money.
reAlpha also has some industry-leading partnerships in place that should help hedge it against excessive volatility. These partnerships are not available to the everyday investor. Additionally, if home prices continue to dip, reAlpha has stated that they are in a solid position to buy up the best properties and offer a potentially greater return to their investors.
When it comes to your values, we encourage you to research the team, the company’s overall stance on the environmental + social causes you care about, and conduct your own due diligence on how reAlpha could fit into your own personal investment strategy.
How to invest in reAlpha
reAlpha is currently offering shares at $10 (USD). The minimum investment is $1000. The process of investing is super easy. You head over to the reAlpha stock page and enter your email information into the invitation box. From there, the website will walk you through the seamless process of becoming a shareholder with reAlpha. The opportunity to become a shareholder during this round ends on December 8.
Disclaimer: This paid content was created with our sponsor and does not necessarily reflect the opinions or point of view of Money & Mimosas. Money & Mimosas. may receive monetary compensation by the issuer, or its agency, for publicizing the offering of the issuer’s securities. Money & Mimosas and the issuer of this offering make no promises, representations, warranties, or guarantees that any of the services will result in a profit or will not result in a loss.
MA, MD, and Hawaii Residentes: reAlpha’s Regulation A offering is not being made in MA, MD, and Hawaii, and our common stock is not available for purchase by MA, MD, and Hawaii residents.
An Offering Statement Regarding This Offering Has Been Filed With The SEC. The SEC Has Qualified That Offering Statement, Which Only Means That The Company May Make Sales Of The Securities Described By The Offering Statement. It Does Not Mean That The SEC Has Approved, Passed Upon The Merits Or Passed Upon The Accuracy Or Completeness Of The Information In The Offering Statement. The Offering Circular That Is Part Of That Offering Statement Is At: Https://Www.Sec.Gov/Archives/Edgar/Data/1859199/000121390022045378/Ea163909-253g2_realphaasset.Htm. You Should Read The Offering Circular Before Making Any Investment
