Assess their risks, liquidity, returns, and timeframes
The minimum investment on Doorvest is a 25% down payment on a home, averaging $56,250 based on the average home price of $225,000.
Investing with Lofty carries typical real estate investment risks, including market volatility, economic changes, and property management challenges. Additionally, the use of cryptocurrency and tokenization presents legal and regulatory uncertainties.
Investing with Doorvest involves risks such as market volatility, economic changes, and property-specific issues. While the platform aims to manage these effectively, outcomes can be uncertain, and investors should carefully consider their risk tolerance and conduct due diligence before investing.
Lofty provides liquidity by allowing investors to list their property tokens for sale on the marketplace at any time, with a 2.5% transaction fee. Orders are held in escrow and have a 30-day expiration.
Doorvest allows investors to sell their homes back to the platform, requiring them to connect with a client partner for more information on the process.
Lofty offers a 5% cash on cash return, with token values updating monthly based on HouseCanary's Automated Valuation Model (AVM).
Doorvest reports an average annual investment return of 18%, accounting for rental income, property appreciation, and mortgage leveraging.
Investment time horizon on Lofty is not fixed and is determined by property owners' collective decision on when to sell through the governance system.
Doorvest focuses on long-term investments in single-family rentals, generally suggesting a commitment of several years to decades, based on real estate appreciation and rental income.
Investors from the US and abroad can invest with Lofty, excluding those from OFAC-sanctioned countries.
To invest with Doorvest, you need to be in the U.S. or able to sign documents at a U.S. Embassy.
The value of assets on Lofty's platform can be volatile, influenced by economic trends, interest rates, and real estate market conditions, potentially leading to variable financial outcomes for investors.
Real estate assets on Doorvest can experience volatility due to economic shifts, interest rate changes, and local market trends, potentially affecting investment values and posing risks for short-term investors.
Lofty's marketplace transactions are executed using a smart contract on the Algorand blockchain, which has been audited by CertiK for security.
Doorvest complies with the Texas Real Estate Commission (TREC) consumer protection notice, indicating adherence to state-level real estate transaction standards. It does not provide details on broader financial regulations or audits, focusing more on real estate industry compliance than securities regulation.
Lofty's specific insurance details are not provided, but properties on investment platforms are usually insured against physical damage.
Doorvest protects rental investments with homeowner's insurance, covering physical structure damage and potentially extending to personal belongings and medical expenses. This coverage is a mortgage lender requirement, safeguarding against various damages, though investors should be aware of any coverage limitations.
Lofty provides daily rental income to investors, which can be withdrawn at any time through various methods including ACH, PayPal, and cryptocurrency options.
Doorvest offers rental income as returns to investors, bolstered by a Rent Guarantee that includes vacancy and non-payment protection for the first three months, with an option to extend up to 12 months. Additionally, a Renovation Guarantee covers repair costs for the first year of ownership.
Doorvest employs a fee model, deriving revenue from a portion of the monthly rental income and margins on home sales, always at fair market value.
Lofty provides US residents with pre-filled 1099 tax forms for income and capital gains reporting. Non-US residents may reduce withholding taxes with forms W-8BEN or W-8BEN-E if they have a US SSN or ITIN.
Doorvest facilitates tax compliance by providing investors with all necessary documentation for tax filing, related to real estate investment income and expenses.