Invest in fractionalized rental properties
Invest in startups in exchange for equity or debt
Investments
$250
The minimum investment on StartEngine typically starts from $250, with the average being around $500.
Moderate Risk
3/5
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.
High Risk
4/5
Investing on StartEngine carries risks including market volatility, liquidity challenges, regulatory changes, the high likelihood of company failure, dilution of shares, limited company information, and the absence of guaranteed returns.
Moderate Liquidity
2/5
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.
Minimum Liquidity
1/5
Liquidity on StartEngine Secondary varies due to its nature as a peer-to-peer trading platform with specific eligibility criteria and trading hours. Initially limited to companies that have raised on StartEngine, the platform's liquidity is influenced by the availability of securities and the matching of buy and sell orders within designated market hours.
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Low Return
5 %
Lofty offers a 5% cash on cash return, with token values updating monthly based on HouseCanary's Automated Valuation Model (AVM).
Not Predictable Return
N/P
Potential returns on investments are uncertain and vary. StartEngine's role ends after a company's capital raising concludes, leaving it without control or insight into post-offering investment activities.
Short-term Investment
1 year
Investment time horizon on Lofty is not fixed and is determined by property owners' collective decision on when to sell through the governance system.
Long-term Investment
5+ years
Investments through StartEngine typically have a long-term horizon, often requiring several years to potentially yield returns due to the early-stage nature of the companies.
Who can invest
International
Investors from the US and abroad can invest with Lofty, excluding those from OFAC-sanctioned countries.
Who can invest
International
StartEngine allows anyone over 18 to invest. However, due to regulatory concerns, StartEngine does not currently accept investments from residents of the UK or Canada.
Moderate Volatility
3/5
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.
Moderate Volatility
3/5
Assets on StartEngine, mainly shares in startups and early-stage companies, exhibit high volatility due to uncertain revenues, evolving business models, and market sensitivity.
Regulation and audits
Audited
Lofty's marketplace transactions are executed using a smart contract on the Algorand blockchain, which has been audited by CertiK for security.
Regulation and audits
SEC Regulated
StartEngine operates under strict regulatory oversight by the SEC and FINRA, ensuring adherence to investor protection and market integrity rules.
Insurance
No
Lofty's specific insurance details are not provided, but properties on investment platforms are usually insured against physical damage.
Insurance
Yes
StartEngine's memberships with FINRA and SIPC signify its commitment to investor protection, with SIPC offering insurance against the loss of cash and securities if a broker-dealer goes bankrupt. However, it doesn't cover market loss.
Payouts
Rental Income
Lofty provides daily rental income to investors, which can be withdrawn at any time through various methods including ACH, PayPal, and cryptocurrency options.
Payouts
No Recurring Payouts
Dividends on StartEngine depend on the individual company's policy and investment terms, with startups often reinvesting profits to fuel growth rather than distributing dividends.
Withdrawals
Investors on Lofty can sell tokens anytime on the marketplace and withdraw proceeds using methods like bank transfer, PayPal, or cryptocurrency.
Withdrawals
Investors can withdraw available funds from their StartEngine Investment Account after a 10-day waiting period from the initial transfer, subject to providing additional information for security if needed.
Extra Fees
Yes
Investors may encounter a 3.5% processing fee on investments, depending on the company's choice. Wire transfers could have additional bank fees, while ACH and credit card investments don't have extra fees beyond the 3.5% if applicable. Trading on StartEngine Secondary is free for buying, but selling shares includes a 5% transaction fee.
Taxes
Tax Form
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.
Taxes
Annual Statement
Investors must procure the necessary tax documents directly from the entities in which they have invested, since StartEngine does not distribute tax forms.