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Lofty — Real Estate Investing With Instant Liquidity – Lend & Earn
Lofty offers instant liquidity in real estate investments, allowing you to buy and sell ownership in properties easily. Lend money for others to trade and earn attractive yields. Enjoy daily rental income, easy management, and a path to financial freedom.
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Replies
@pmdbt Congrats on the launch! This can't have been an easy thing to pull off. Probably a naive question, but what's the number one reason people choose to invest in real estate vs. other asset classes?
@rajiv_ayyangar Thanks Rajiv! Took us 2 years to finally enable this in a technically feasible and legal way, so it's definitely been an interesting journey.
Your question isn't naive at all. I would say based on interviewing our users, many of whom own or invested in real estate outside of Lofty, there are 3 main reasons.
1. Psychological - there is something psychological about owning real estate, where you feel a true sense of ownership and have control of this asset. You can share the address and photos of the property with your friends and family and talk about the location and your plans for the investment. It's a feeling that often can't be replicated by investing in stocks or crypto.
2. Tax benefits - people often ignore post tax returns on their investments. It may seem like real estate returns are boring when stocks have double digit annual returns and even treasury yields are paying out 5%, but you have to pay taxes on the income earned on those other assets. For real estate, an owner benefits from various expenses that can offset their tax liability on paper (we handle this for our users automatically), including depreciation expense. As a result, you are more likely to keep all the income you've earned. In fact, many of our users receive great yield on their properties, but have 0 or negative tax liability on paper, which they can even use to off-set tax liability from other investments.
3. Leverage - there will always be risks when taking on leverage for any investment, but real estate is rare in that it's often standard to take on 5:1 leverage through a mortgage. This type of leverage is not really possible in a lot of other asset classes. Real estate often have low nominal returns, but when the investment is leveraged, those returns often aren't boring anymore. It's not uncommon to find real estate investors earning consistently high yields (above average stock returns or treasury yields) thanks to this. If you combine this with the second point, these investors are also keeping more of their returns.
Overall, people often ignore real estate, because they seem boring and the national average return seems low compared to other asset classes, but that's because it includes properties and neighborhoods that don't have any growth or demand. If you find the right properties in the right areas, it's very common for your real estate investments to out perform other asset classes.
I think this is one of the reasons why growing up, most of the families of wealthy friends and classmates I had were all involved in real estate somehow.
Given all these reasons, I think real estate should definitely be a part of anyone's portfolio should they have the funds to acquire these assets, and now with what we're building at Lofty, everyone can :)
I'm a real estate investor who's about to list my property on Lofty and I am psyched. The product is easy to use and the value proposition to both buyers and sellers is excellent. Especially in today's high interest rate environment, there are a ton of landlords who want to cash out that will find this much more lucrative than selling outright. It will contain millions of properties in a few years.
@derekscruggs Absolutely! We're excited to see your property launch :) One of the main problem with the existing real estate market is that it's too rigid. Different sellers have different needs and preferences and we're super excited to be building a structure that sellers can customize to their own needs!
I love the access to real estate investing to those who do not traditionally have the capital, connections, or knowledge!
cool concept! and beautiful execution to bring it to life, make tokenize real estate a reality! kudos!
@dmitry_shklovsky thanks Dmitry, let me know if we can help make real estate a part of your portfolio moving forward :)
I've been saying this for years... Lofty is the future. I got my entire family to start investing with the platform and they love it too.
@jalen_nelson Thank you so much! We know the level of trust required to recommend things to your own family members and we really appreciate that.
@herbalist we hope to make real estate an asset class that's accessible to anyone. Glad to see we've helped you make the leap!
@zulkarnaim thank you for the kind words! We signed up for a long-journey, so we're just getting started :)
Lofty is a great solution for those who want to invest in real estate with instant liquidity! With Lofty, you can easily buy and sell shares in real estate, as well as provide loans and receive attractive returns.
Congrats on the launch @pmdbt ! Cool concept, By the way I’m curious about your thoughts on integrating AI-driven features like virtual staging, object removal, LLM driven realty description and image enhancement into the real estate listing process. We are in the development stages for such an application, and would love to hear your views on this, given your experience in this field.
Congrats on the launch @pmdbt ! The idea of fractional investing was pretty popular in Korea a couple years ago. Can you please briefly share any statistics of your real estate properties? Location, resi vs non-resi, average property prices, etc. Also, why would we go down this route vs. investing in a REIT?
@the_han_kim Sure thing. There are over 120 properties for you to choose from. All of them are currently in the USA. Most are single-family properties, with two triple-net commercial properties, and over fifteen multi-unit residential properties.
The prices of the properties vary greatly based on the type and location, so you have properties in the $2M range while there are smaller single-family houses for less than $100k. The average is closer to $400k-$500k.
Lofty is designed for people that want to be more active in their real estate investments by picking their own portfolio and having management power over those assets and how they're operated.
REITs are designed for passive investors who just want to have exposure to real estate in their portfolio. It's a great product and frankly a lot of people are better of just investing in REITs.
With that said, the entire USA single-family investment market does around $1.5 Trillion dollars in annual transactions. Out of that volume, only 30% are from institutional investors, including REITs. The remaining 70% of that volume are all from smaller landlords, ie mom and pop retail investors, who own a few rentals.
These people also own stocks and know what REITs are, but they specifically prefer to invest in and manage their own properties. Lofty is designed for this segment of the real estate market.
If the idea of having 100% control over your real estate portfolio and how those assets are operated doesn't appeal to you right away, then you're probably a better fit for REITs, which is totally fine!
Congratulations, Jerry and the Lofty team! 🎉
It's fantastic to see how Lofty has evolved from its initial launch to now offering groundbreaking features in real estate investment. Your innovative approach to fractional ownership and liquidity is truly transforming the market. The ability to trade real estate equity with the ease of trading stocks is a remarkable achievement. Kudos for making real estate investing more accessible and streamlined!
What has been the most unexpected feedback or use case you've encountered since introducing the new features, and how has it influenced your roadmap?
Having been both a buyer and seller on Lofty, I really like how Jerry and Max have built Lofty.
As someone who owns several rental properties (long term rentals and short term rentals), the liquidity options have always been very limited and extreme. Either sale the whole property or take out a loan like a HELOC which can be very time intensive and challenging to get approved on rental properties.
With Lofty, I've been able to sell small amount of equity as I've needed capital for other projects. I haven't had to deal with high interest loans that can really impact cash flows.
Buyers have benefited from the strong cash flow of my properties due in part to low interest mortgage rates that I have locked in.
I couldn't recommend Lofty enough.
@mrjordanskis Thank you for the kind words! It's great to hear that Lofty has provided something that the traditional real estate industry couldn't serve you well on. Our goal is to make every aspect of real estate investing 10x better for our users. Let us know if you have any other feedback. We especially value the opinions of our sellers. Your vote of confidence is also the best marketing tool to convert new sellers :)
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