Assess their risks, liquidity, returns, and timeframes
The minimum investment amount on HoneyBricks typically starts at $5,000, although some specific projects may require higher minimums.
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 in HoneyBricks involves various risks inherent to real estate and investment platforms, including market volatility, liquidity challenges, regulatory changes, operational uncertainties, economic fluctuations, and technology-related vulnerabilities.
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.
HoneyBricks offers a Secondary Market for liquidity, allowing investors to buy and sell assets after a 12-month hold via SPVs and blockchain technology.
Lofty offers a 5% cash on cash return, with token values updating monthly based on HouseCanary's Automated Valuation Model (AVM).
HoneyBricks targets over 15% annual returns and aims for a cash-on-cash return of over 5% from its real estate investments. These returns are projections based on conservative reviews and are derived from property appreciation and reliable cash flows from high-occupancy assets.
Investment time horizon on Lofty is not fixed and is determined by property owners' collective decision on when to sell through the governance system.
The investment time horizon on HoneyBricks is inherently long-term, with the expectation that investors may hold their investments for several years to fully realize the potential appreciation and sustained cash flows from multifamily real estate assets. While a secondary market exists to provide liquidity after a 12-month holding period, immediate or short-term exit opportunities may be limited.
Investors from the US and abroad can invest with Lofty, excluding those from OFAC-sanctioned countries.
HoneyBricks is available to accredited US investors and to non-US investors without accreditation requirements.
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.
The assets on HoneyBricks, like any real estate investments, are subject to market volatility influenced by economic conditions, interest rates, and local market trends. These fluctuations can impact property valuations, posing risks particularly for those seeking short-term gains.
Lofty's marketplace transactions are executed using a smart contract on the Algorand blockchain, which has been audited by CertiK for security.
HoneyBricks adheres to regulations set by the SEC and undergoes necessary audits to ensure transparency and investor protection. Its investment offerings require SEC filings and provide detailed offering circulars to investors.
Lofty's specific insurance details are not provided, but properties on investment platforms are usually insured against physical damage.
HoneyBricks ensures its properties are insured against physical damages and losses, offering a layer of protection for investments. However, this insurance does not cover market volatility, economic downturns, or fraudulent activities that might affect property values. Additionally, coverage limits may not fully reflect current market valuations.
Lofty provides daily rental income to investors, which can be withdrawn at any time through various methods including ACH, PayPal, and cryptocurrency options.
HoneyBricks investors receive dividends from the net rental income of properties after expenses and reserves. These regular cash distributions aim to provide a predictable passive income stream from high-occupancy multifamily real estate investments. The exact amount of dividends may vary with the performance of the assets.
HoneyBricks charges no fees for initial investments or for transfers on the Secondary Market. Investors may only incur blockchain network fees for transactions executed on the platform.
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.
HoneyBricks offers tax-advantaged investing and provides necessary tax documentation to support investors in reporting their investment income.