Shifting from crowdfunding “platform” to online investments social networks helps mitigate risk, maximize potential

Shifting from crowdfunding “platform” to online investments social networks helps mitigate risk, maximize potential

January 15, 2018

Imagine knocking on the door of one of New York City’s commercial real estate titans and asking to invest $25,000 in one of their next multimillion-dollar development projects? You’d be the laughing stock of the office for years to come!

Equity investments in projects like these are usually reserved for institutional investors—insurance agencies, pensions, hedge funds, endowments, REITs and the like. On occasion, ultra-high-net-worth individuals might be able to participate in the capital stack. But rarely are these opportunities open to the general public.

Or so that’s been the case. Until now.

In recent years, a number of real estate crowdfunding platforms have emerged as a way of opening these opportunities to accredited investors. Sites were designed to solicit equity investments from accredited investors.

The marketplace opened even further in 2015, when the Securities and Exchange Commission approved what’s known as “Reg A+,” a provision under Title IV of the JOBS Act. Under Reg A+, crowdfunding platforms can market to both accredited and non-accredited investors. Now, real estate sponsors can raise up to $50 million from non-accredited investors.
Reg A+ has created a surge in crowdfunded equity investments. According to Forbes, online investments accounted for just $880 million in 2010. That number skyrocketed to $34.4 billion in 2015. We suspect it will grow even further in the years to come.

Tech Platforms Leave Users Wanting for More: More Deals. More Vetting. More Due Diligence. More Transparency. More Project Oversight.

While crowdfunding platforms helped real estate investors break into the online marketplace, the service these platforms provide is limited.  These platforms are essentially a tech solution used to connect developers with investors—a far cry from having a trusted realty advisor guiding you. These platforms serve more like a matchmaker than a trusted realty adviser. The brains behind the software simply don’t have real estate industry expertise. As a result, there is no way for users to know whether the opportunities offered on these platforms have been carefully vetted. Users also don’t know whether the deals presented on screen are really the best commercial assets to invest in.

What’s more, these platforms lack the industry connections to provide consistent, high-quality deal flow. Even if projects successfully raise their fundraising targets, there’s nobody providing project oversight to ensure each project is built according to what was promised to investors. Investors are forced to take on incredibly high risk as a result.

Shifting the Paradigm: Mitigating Risk and Maximizing Potential

Online real estate investing platforms have evolved since their early days. New models have emerged that are far more than a simple software solution. The traditional online platform is giving way to a new paradigm: an online social investment network.

iintoo is leading the way in this regard.

Considered one of the leading online Real Estate Investment Management Companies (REIMCO) in the nation, iintoo is an online social investment network that specializes in exit-oriented real estate investments. Unlike traditional software platforms, iintoo’s social investment network is led by a team of real estate industry experts that carefully vet each investment opportunity. iintoo’s multidisciplinary investment committee personally verifies the legitimacy of a project’s development team, building permits, construction plans and revenue forecasts before the projects are eligible for its online network.

Once approved, members of iintoo’s community can easily interact with one another to discuss projects and share trading tips. Approved members can also share real-time information and harvest the knowledge of the collective. Doing so enables smaller and less experienced investors to bridge the industry’s notorious information gap through the guidance of a proficient network.

iintoo’s extensive due diligence process helps mitigate risk. And because iintoo has narrowly defined criteria for the types of projects that it accepts, investors can expect to find projects spinning out double-digit yields. By lowering the barrier to entry, iintoo helps unlock low-risk, high-yield commercial real estate development opportunities to investors who would have otherwise been shut out.

Unprecedented Industry Expertise and Partnerships

Unlike the platforms that exist today, iintoo is led by a team of real estate professionals with more than 70 years’ combined expertise. The team has personally analyzed, invested in, actively managed, monitored and reported on the types of projects it brings to its online social investment network. Traditional software platforms can’t say the same.

Additionally, iintoo has partnered with the Meridian Capital Group, one of the nation’s largest commercial real estate finance and advisory firms. No other platforms have such institutional backing.

“By tapping into Meridian Capital’s private deal flow, iintoo is able to offer real estate opportunities in the small- to mid-sized asset class, which accredited investors would not be able to access otherwise,” explains Eran Roth, Founder and CEO of iintoo.

Fast Facts: How iintoo is Already Disrupting the Marketplace

  • Currently, only accredited investors are able to join intoo’s online social investment network.
  • Investors can participate in iintoo deals with as little as $25,000.
  • iintoo is a global company that has already accumulated a total asset value of $300 million.
  • Investment opportunities span a range of market segments, from ground-up development to value-add opportunities, from multifamily and student housing to deals in the office, hospitality and retail industries. iintoo specifically targets markets that have high growth potential and have remained stable during market cycles, a key feature of our risk-mitigation strategy.
  • Projects can be found in a variety of geographic areas, including New York, Denver, Atlanta, St. Louis, San Diego, Tulsa, Wichita Falls and Savannah.
  • Once a project is funded, iintoo provides complete project oversight – including site visits, progress reports, and managing quarterly returns so investors can rest easy at night.
  • With iintoo, there are no hidden sign-up or ongoing membership fees.
  • iintoo does not take a project management fee but, rather, a success-based fee that comes out of project profits.

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*When we refer to “Equity Protection” we are referring to an arrangement where iintoo epiic GP LLC, the general partner of each covered issuer (“Covered Issuer”), promises that, even in the event the underlying project is not profitable or records a loss, the investor in the Covered Issuer shall receive a specified amount equal to the original principal investment he/she/it provided (less other amounts already received by such individual investor during the course of the investment) subject, however, to significant limitations including but not limited to repayments for losses in the Covered Issuer are only made up to a maximum amount of funds available from the retention account and the policy (where such policy limit may be less than the total amount invested), repayments are on a first come, first serve basis, and losses are aggregated across Covered Issuers subject to the same retention account and policy. iintoo epiic GP LLC, and not investors, is a party to the policy with Everest Insurance®. As a result, investors have no direct legal rights under the policy. In addition, beyond use of the Equity Protection proceeds from the retention account and the policy, neither iintoo epiic GP LLC nor the Covered Issuer has any obligations to indemnify investors for losses. For more information, please see “Business of the Company—Equity Protection” and “Risk Factors—Risks related to the Equity Protection” in any of our issuers’ private placement memoranda.

The above may contain forward-looking statements. Actual results and trends in the future may differ materially from those suggested or implied by any forward-looking statements in the above depending on a variety of factors. All written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. Except for any obligations to disclose information as required by applicable laws, we undertake no obligation to update any information contained above or to publicly release the results of any revisions to any statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of the publishing of the above.

Private placements of securities accessible through the iintoo™ social network real-estate investment platform (the “Platform”) are intended for accredited investors. Such private placements of securities have not been registered under applicable securities laws, are restricted and not publicly traded, may be subject to holding period requirements, and are intended for investors who do not need a liquid investment. These investments are not bank deposits (and thus are not insured by the FDIC or by any other federal governmental agency), are not guaranteed by and iintoo Investments Ltd. (“iintoo”) or any third party working on our behalf, and may lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the Platform. Investors must be able to afford the loss of their entire investment.

Equity securities are offered through Dalmore Group LLC. ("Dalmore"), a registered broker-dealer and member of FINRA/SIPC. Any real estate investment accessible though the Platform involves substantial risks. Any financial projections or projected returns are projections only, and iintoo makes no representations or warranties as to the accuracy of such information and accepts no liability therefor whatsoever.

Investors should always conduct their own due diligence, not rely on the financial assumptions or estimates displayed herein, and should always consult with a reputable financial advisor, attorney, accountant, and any other professional that can help them to understand and assess the risks associated with any investment opportunity. Any investment involves substantial risks. Major risks, including related to the Equity Protection and/or the potential loss of some or all principal, are disclosed in the private placement memorandum for each applicable investment.

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