Assess their risks, liquidity, returns, and timeframes
Fundhomes sets its minimum investment threshold at $100, with shares available at $10.
Investing in Arrived carries risks including market fluctuations, economic factors, and property-specific issues. There's also the potential for loss, and investments are generally illiquid, meaning they can't be easily sold or exchanged for cash quickly.
Investing in Fundhomes carries risks such as potential loss of capital, market fluctuations, and regulatory changes affecting profitability. Investments are generally illiquid with a long-term exit strategy, and early withdrawal may result in penalties. A secondary market to improve liquidity is under consideration but not guaranteed.
Arrived is designed for long-term investments with limited liquidity options. The Single Family Residential Fund offers share redemption after six months with restrictions. For individual properties, shares are held until the property is sold, typically after 5-7 or 5-15 years. A secondary market for shares is being considered but is not currently available.
Fundhomes offers liquidity options including automatic share sales when properties are sold (5-10 years), a secondary market for selling shares to other investors, and a buyback program, with potential early sale penalties within the first year.
Arrived investors may earn returns through monthly rental income dividends and property value appreciation upon sale, with historical annual return estimates ranging from 5.5% to 15%, depending on the property type and use of leverage.
Investors in Fundhomes can expect cash dividends from rental income, projected at a hypothetical rate of 6.62% per year, and property appreciation, estimated at 4.74% per year, upon sale within 5-10 years. This totals a hypothetical annual return of 11.36%.
Arrived targets a 5-7 year hold period for Single-Family Residentials and a 5-15 year hold period for Vacation Rentals, emphasizing a long-term investment horizon.
The investment time horizon at Fundhomes is typically 5 to 10 years, focusing on long-term gains from rental income and property appreciation.
U.S. citizens or residents who are at least 18 years old can invest with Arrived, and accreditation as an investor is not necessary.
To invest in Fundhomes, one must be a U.S. Citizen or a resident of the U.S. with a valid Social Security Number.
Real estate assets on Arrived can be subject to market volatility influenced by economic shifts, interest rates, and local market conditions.
Fundhomes' vacation rental properties face real estate market volatility, with valuations influenced by economic shifts, interest rates, and regulatory changes.
Arrived's offerings are regulated by the SEC, requiring compliance with securities laws and provision of detailed offering circulars to investors. Audits and financial reviews are conducted for transparency.
Fundhomes utilizes Regulation A for public offerings, enabling investors to buy shares in Series LLCs that each own a vacation rental property. This approach grants investors partial ownership in a property, with all details outlined in SEC-filed offering circulars.
Arrived properties are insured against physical damage or loss, but insurance may not cover all risks and does not protect against market volatility, economic downturns, or other investment-related losses.
Fundhomes insures its properties against physical damage, but this doesn't cover market risks or regulatory changes affecting property values. Insurance limits may also not match property market values.
Arrived pays out dividends monthly, with single-family residential properties historically averaging 45 days to lease and vacation rentals taking 3-6 months to start generating income. The first dividend payment for the Single Family Residential Fund is scheduled for February 25th for investments made by December 31st, and it may take up to 60 days to receive the first dividend after investing. Subsequent dividends are paid monthly, near the end of the month.
Investors in Fundhomes receive quarterly dividends derived from the net rental income of vacation rental properties, after deducting operational expenses. These dividends reflect a portion of the property's profitability but are not guaranteed and can fluctuate based on occupancy rates and market conditions.
For long-term rentals, Arrived charges an 8% management fee on gross rental income. Vacation rentals incur a 15-25% management fee. Additional fees include a one-time sourcing fee (3.5% for long-term, 5% for vacation rentals), and a quarterly Asset Management Fee (0.25% for the fund, 0.15% for long-term rentals). Other costs may apply for closing, renovation, and operating expenses.
Fundhomes earns through fees for property and asset management. This includes handling vacation rental operations like maintenance and guest services, as well as overseeing investment strategies and performance.
Arrived sends investors a 1099-DIV form by the end of January for tax reporting, and state taxes are based on the investor's state of residence, not the property's location. Vacation rentals are taxed similarly but do not qualify as a REIT.
Fundhomes provides K-1 Tax Forms for each investment property, detailing investors' share of income, deductions, and credits. Typically, these forms are issued by March 15th each year, with an IRS extension deadline of September 15th if needed.