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Frequently Asked Questions

How Realbricks Works

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Investing in rental properties is incredibly complex and time-consuming.

Realbricks has simplified the complexities traditionally associated with real estate investing, making it accessible to anyone.

Investing $100 is just as easy as it is to invest $100,000.

With Realbricks, anyone can buy shares in rental homes and vacation rentals with a simple process by browsing homes, selecting shares, reviewing the terms, signing an online contract, and funding the investment by linking their bank account.

Investors then sit back and collect their share of rental income along with participating in the property value appreciation.

What Is Fractionalized Real Estate Investing?

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Fractional real estate investing is an innovative approach where multiple investors come together to pool their funds and purchase a single property. Similar to crowdfunding, this modern investment model allows each investor to buy just one section or block of the property and split not only the cost but the profits.

Fractional ownership allows individuals to reap the benefits of these long-term investments with a smaller outgo and smaller stake. As the property value rises, so do each individual investor’s returns.

Why Invest In Fractionalized Real Estate, And Why Not To?

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Investing in fractionalized real estate is more affordable than traditional ownership.

When you purchase a property with multiple investors, you can spread the cost of the property over a larger number of people.

Fractional real estate buyers can start investing in high-value properties without putting large amounts of cash down. As the value of each property rises, so does the investor’s equity and potential return.

Fractional real estate investing is also one way to boost your passive income and break into real estate investing. It's a great option for investors with limited funds who don't want the burden of owning and maintaining an extra property.

While there are some great advantages to fractional ownership, one of the disadvantages is that it may not give you as much control over the property as sole ownership would. You will also have to share in the management costs.

Another downside to fractional ownership is that it can be more difficult to sell your share of the property than to sell an entire property.

However, given how little investment you can start with, this may not be an issue for most.

Why Invest In Vacation Properties?

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Vacation Rental Properties: Vacation rental properties have gained popularity in recent years, driven by platforms such as AirBNB and VRBO. These properties are typically located in popular tourist destinations or areas with high demand for short-term rentals. Investing in vacation rental properties can provide higher rental income potential compared to traditional long-term rentals. However, vacation rentals may require more active management and marketing efforts to attract guests and maintain occupancy rates.

How Leverage Can Impact Your Investments

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While investors own 100% of the equity in each home, Realbricks may utilize financing to provide positive leverage on the property in order to maximize the return for investors.

Investors are not personally liable for the debt, nor do they need to qualify for credit.

Why Invest In Single-Family Properties?

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Investing in single-family rental homes that need light improvements offers consistent cash flow, and long-term appreciation while limiting downside risk.

Residential real estate is also much easier to buy and sell than commercial, industrial, or land. Not only that, but it’s easier to find deals and it generates strong cash flow with lower vacancy rates and turnover.

Why Invest In Multi-Family Properties?

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Multi-Family Properties: Multi-family properties, such as duplexes, triplexes, or apartment buildings, offer the advantage of housing multiple tenants in a single property. Investing in multi-family properties allows for greater rental income potential as there are multiple units generating revenue. Additionally, multi-family properties benefit from economies of scale, as expenses can be spread across multiple units. However, managing a multi-family property may require more hands-on management and a deeper understanding of landlord-tenant laws.

How To Diversify Your Portfolio With Realbricks

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The best way to increase your net worth and protect the value of your assets over time is by diversifying your Portfolio through real estate investments.

With Realbricks, you can start building a diverse portfolio of properties with ease without any kind of management on your part.

We take care of everything from property management to rent collection, so you can just enjoy the benefits.

How Do Single-Family Homes Compare To Other Home Types In The Rental Market?

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Single-family properties offer higher appreciation rates and lower monthly rent, making them ideal investments if you're looking to build cash flow.

Top 5 Benefits Of Investing In Realbricks Properties

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  1. Quick and Simple
    Instead of investing the traditional way which would require multiple steps and several months of challenging work, Realbricks has simplified the process of investing in real estate. In just a few short steps, you can easily buy shares in a rental home or vacation rental property.
  2. Lower Barrier to Entry
    The largest barrier to investing in real estate is the substantial initial investment required. Rather than come up with a significant down payment yourself, you can open an account and invest as little as $100 in a home.
  3. Diversify Your Investments
    Diversification helps to lower your risk while keeping your potential for returns high. Realbricks has many different ways to help you mitigate risk through diversification.
  4. No Property Responsibility
    When you invest with Realbricks, you have no responsibility for finding, acquiring, or managing the property. We take full responsibility for the rental property including finding and vetting the tenants and managing all the bookings for short-term rentals. We also take care of all maintenance, repairs, payment collections, and customer service requests.
  5. Passive and Consistent Income
    Since Realbricks takes care of all property operations (which is 100% passive), their investors receive rental payments that don't fluctuate uncontrollably from month to month and are consistent in both when they are paid and the amounts that are paid.
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More to Learn

The Beginner’s Guide to Real Estate Investing

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Real estate investing can be an exciting and lucrative venture for individuals looking to build wealth and generate passive income. However, navigating the world of real estate investing as a beginner can be daunting. This guide aims to provide essential information and steps for those interested in getting started with real estate investing.

Set Clear Investment Goals:

Determine your objectives: Are you looking for long-term appreciation, regular cash flow, or a combination of both?

Define your risk tolerance: Assess how much risk you are willing to take on and what type of real estate investments align with your comfort level.

Educate Yourself:

Research the real estate market: Understand local market trends, property values, rental demand, and economic factors that can impact real estate.

Learn investment strategies: Familiarize yourself with different investment approaches such as rental properties, fix-and-flips, wholesaling, or real estate investment trusts (REITs).

Study real estate financing: Gain knowledge about mortgage options, interest rates, down payments, and loan terms.

Build a Strong Financial Foundation:

Establish a budget: Assess your financial situation and determine how much you can comfortably invest without compromising your financial stability.

Improve your credit score: A higher credit score can lead to better loan terms and increased financing options.

Save for a down payment: Start setting aside funds for a down payment, as many real estate investments require upfront capital.

Create a Real Estate Investment Strategy:

Choose a niche: Select a specific area of real estate investing that aligns with your goals, such as residential rentals, commercial properties, or fix-and-flips.

Determine your investment timeframe: Decide if you're looking for short-term gains or long-term wealth accumulation.

Analyze risk and return: Assess the potential risks and returns associated with your chosen investment strategy.

Network and Seek Professional Advice:

Join real estate investment groups or attend local real estate meetups to connect with experienced investors and professionals.

Seek advice from professionals: Consult with real estate agents, attorneys, and financial advisors who specialize in real estate to gain valuable insights.

Conduct Thorough Due Diligence:

Research properties: Analyze market data, property values, rental rates, and potential expenses associated with the property.

Perform property inspections: Inspect the physical condition of the property to identify any potential issues or repairs.

Review financials: Scrutinize income and expense statements, tax records, and lease agreements (if applicable) to assess the property's financial viability.

Secure Financing:

Explore financing options: Research mortgage lenders, banks, or private lenders to secure funding for your real estate investment.

Get pre-approved: Obtain pre-approval for a mortgage or secure alternative financing options before making an offer on a property.

Make Calculated Investment Decisions:

Evaluate potential returns: Consider factors such as rental income, cashflow, property appreciation, and tax benefits.

Assess the risk-reward ratio: Balance potential returns with the risks associated with the investment.

Use investment analysis tools: Utilize tools like cash flow projections, cap rate calculations, and return on investment (ROI) analysis to evaluate the profitability of the investment.

Property Acquisition and Management:

Make offers and negotiate: Submit offers based on your analysis and negotiate favorable terms with sellers.

Property management: Decide whether you will manage the property yourself or hire a professional property management company to handle day-to-day operations.

Continuously Educate Yourself and Adapt:

Stay updated on market trends and regulations that can impact your investments.

Attend workshops, seminars, and webinars to enhance your knowledge and learn from industry experts.

Be prepared to adapt your investment strategy as market conditions evolve.

Real estate investing can provide a pathway to financial growth and wealth creation. By setting clear goals, educating yourself, conducting due diligence, and seeking professional advice, you can navigate the world of real estate investing with confidence. Remember that real estate investing requires patience, persistence, and continuous learning. With the right mindset, knowledge, and a well-defined strategy, you can embark on a successful journey in real estate investing.

For many investors, crowdfunding/fractional ownership is the only viable option to begin investing in real estate today. 

RealBricks is ready to begin your journey with real estate investment. Please check out the RealBricks marketplace to learn more today and begin building your portfolio brick by brick.

Top 10 Benefits of Fractional Real Estate Investing with Realbricks

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Diversification:  RealBricks allows investors to diversify their real estate portfolios by owning fractional shares in multiple properties across different locations and asset classes. This diversification can help mitigate risk and potentially increase returns.

Lower Entry Costs: RealBricks enables investors to participate in high-value real estate assets with lower entry costs. Instead of purchasing an entire property, investors can own a fraction of it, reducing the upfront capital required.

Access to Premium Properties: Investing with RealBricks opens up opportunities to invest in premium properties that may otherwise be financially out of reach for individual investors. Investors can gain access to rental homes, vacation rentals, specialty furnished properties that they would otherwise not have access to.

Passive Income Generation: RealBricks allows investors to earn passive income through rental returns or profit-sharing. The rental income generated from the property is distributed proportionally among the fractional owners, providing a steady cash flow.

Professional Property Management: Fractional ownership with RealBricks includes professional property management services. This relieves investors of the day-to-day responsibilities of property management, including tenant screening, maintenance, and rental collection.

Reduced Risk and Liability: Sharing the ownership of a property with other investors helps spread the risk and reduce individual liability vs owning directly. If a property experiences vacancies or unexpected expenses, the burden is distributed among multiple owners. RealBricks properties are funded with a reserve fund and funds needed for improvements or furnishings thus eliminating the risks of a capital call for investors in the future.

Exit Strategy Flexibility: RealBricks provides greater flexibility when it comes to exiting an investment. Investors can sell their fractional shares to other interested parties via the RealBricks Marketplace.

Transparency and Oversight: RealBricks provides transparent reporting and oversight, allowing investors to stay informed about the performance of their investment. Regular updates, financial statements, and property evaluations can provide transparency and confidence in the investment.

Professional Expertise: RealBricks’ team works with experienced professionals who specialize in identifying, acquiring, and managing properties. This expertise can help investors make informed decisions and optimize their investment returns.

Accessible Real Estate Market: RealBricks opens up the real estate market to a wider range of investors who may not have the financial means or experience to invest in properties individually. It democratizes access to real estate investment opportunities.

The Many Types of Rental Properties

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A Comparison of Long-Term, Short-Term, and Medium-Term Rental Properties: Analysis of Opportunities and Risks

Introduction:

Real estate investment in rental properties offers various strategies, including long-term, short-term, and medium-term rentals. Each approach has its own unique characteristics, benefits, and associated risks. This aims to compare these rental property types and highlight the specific risks associated with short-term rentals, particularly concerning the practice of rental arbitrage.

I. Long-Term Rental Properties:

A. Definition and Characteristics:

  1. Long-term rentals typically involve leasing residential properties for extended periods, typically six months or longer.
  2. Tenants are more likely to be stable, providing a consistent income stream.
  3. The landlord is responsible for maintenance and repairs.

B. Benefits:

  1. Stable Income: Long-term rentals offer steady, reliable income with monthly rent payments.
  2. Reduced Vacancy Risk: Tenants tend to stay longer, minimizing the risk of frequent vacancies.
  3. Lower Turnover Costs: Longer lease terms reduce turnover costs, such as advertising and tenant screening.

C. Risks:

  1. Limited Flexibility: Long-term rentals offer less flexibility for adjusting rental rates or changing tenants.
  2. Potential for Bad Tenants: Longer lease terms may increase the risk of renting to problematic tenants.
  3. Market Fluctuations: Economic conditions and rental demand can impact rental income.

II. Short-Term Rental Properties:

A. Definition and Characteristics:

  1. Short-term rentals involve renting properties for brief periods, often on a nightly or weekly basis.
  2. Platforms like Airbnb and VRBO facilitate short-term rental transactions.
  3. Properties are typically furnished and rented out as vacation or temporary accommodation.

B. Benefits:

  1. Higher Rental Income: Short-term rentals often yield higher rental rates, especially in popular tourist destinations or high-demand areas.
  2. Flexibility: Property owners can use their properties when not rented, allowing for personal use and scheduling flexibility.
  3. Market Access: Short-term rental platforms provide access to a vast pool of potential renters.

C. Risks:

  1. Seasonal Demand: Rental income can be highly dependent on seasonality, resulting in fluctuations and potentially lower revenue during off-peak periods.
  2. Increased Management Effort: Short-term rentals require more active management, including guest communication, cleaning, and property maintenance.
  3. Regulatory Challenges: Local regulations and restrictions on short-term rentals can limit the feasibility and profitability of these investments.

III. Medium-Term Rental Properties:

A. Definition and Characteristics:

  1. Medium-term rentals typically involve lease durations ranging from one to six months, bridging the gap between long-term and short-term rentals.
  2. Commonly used by individuals seeking temporary housing (travel nurses, medical practitioners, etc.) for job assignments, educational programs, or relocation or homeowners who have been displaced from property casualty damage or losses (Fire/storm damage).

B. Benefits:

  1. Attractive Rental Market: Medium-term rentals cater to individuals seeking temporary housing solutions, ensuring consistent demand.
  2. Enhanced Flexibility: Property owners can adjust rental rates and lease terms more frequently than long-term rentals.
  3. Potential for Higher Rental Income: Compared to long-term rentals, medium-term rentals may yield higher rental rates due to their flexibility.

C. Risks:

  1. Limited Tenant Pool: The target tenant pool for medium-term rentals may be smaller than that of long-term or short-term rentals, potentially leading to longer vacancy periods.
  2. Higher Management Effort: While less intensive than short-term rentals, medium-term rentals still require ongoing management and maintenance.

IV. Risks of Short-Term Rentals and Rental Arbitrage:

A. Rental Arbitrage Defined: Rental arbitrage refers to the practice of renting properties on a long-term lease and subletting them on short-term rental platforms for profit.

B. Risks Associated with Rental Arbitrage:

  1. Violation of Lease Agreements: Engaging in rental arbitrage without obtaining proper permissions can breach lease agreements and lead to legal consequences.
  2. Regulatory Compliance: Rental arbitrage may run afoul of local regulations, zoning restrictions, and homeowner association rules, resulting in penalties or forced closures.
  3. Property Damage and Wear: Frequent turnover of guests can lead to increased wear and tear on the property, potentially resulting in higher maintenance and repair costs.
  4. Increased Competition: The rise of rental arbitrage can lead to oversupply in certain markets, resulting in increased competition and potential downward pressure on rental rates. This risk is especially high in markets where the supply of suitable long-term rental units is large relative to availability of suitable properties to purchase.

Conclusion:

Real estate investment in rental properties offers various opportunities and associated risks. Long-term rentals provide stability and steady income, while short-term rentals offer higher rental rates and flexibility. Medium-term rentals bridge the gap between these two approaches. 

However, short-term rentals, particularly those involving rental arbitrage, present specific risks related to regulatory compliance, property damage, and increased competition. 

Investors should carefully evaluate these factors and consider their risk tolerance and investment goals when choosing a rental property strategy.

RealBricks provides more than 100 years of real estate experience to source, vet and provide investment opportunities for investors looking to begin their real estate investment experience with as little as $100.  

The RealBricks team provides the expertise to manage the risks and market dynamics noted above while providing rental returns from long-term, medium-term and very select short-term rental properties.

Why invest in vacation rental properties?

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The benefits of investing in a multi-family home include convenience, cash flow, and tax deductions.

The rental income generated from the other units can help offset the cost of the mortgage and maintenance expenses.