Bhavik Dani Featured on Midland Investments Podcast

1 min read

Midland Self-Directed IRA & 1031

Earlier this month, our very own Dealflow Officer Bhavik Dani lent his hotel crowdfunding expertise to Midland IRA, on their Midland Media: Podcast Series. Bhavik goes in depth about how hotel crowdfunding distinguishes itself from other real estate investment opportunities, and also discusses our team’s journey so far on the road to making hotel crowdfunding accessible to investors across the nation!

Check out the full podcast here.

Bhavik Dani Featured on Midland Investments PodcastInterested in learning more about hotel investments and EquityRoots’ hotel crowdfunding platform? Click below!

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EquityRoots: Democratizing Hotel Investments

3 min read

Hi. I’m Bhavik Dani, Dealflow Organizer with EquityRoots.com. It’s my pleasure to talk to you about how crowdfunding is revolutionizing the hotel industry. EquityRoots.com uses crowdfunding as a finance mechanism to raise capital for real estate assets, specifically for premium branded franchised hotels. EquityRoots combines and harnesses the buying power of the crowd to bring you investment opportunities in institutional grade investments that were once available only to REITs, insurance companies, and the largest corporations. Our crowdfunding technology allows even the smallest of investors to pool their capital right next to proven developers and industry leaders. Hotel crowdfunding is really a system in which everyday folks like you and I become the source of capital. The capital can be structured as equity, debt, mezzanine debt, and sometimes even convertible debt. This capital is fairly flexible with how a developer can use it to further grow and improve business, from renovating a pre-existing hotel development to constructing and designing an entirely new development from scratch.  The advantages of crowdfunding to investors include:

Diversifying Risk

We can diversify risk by allowing the crowd to buy fractional interests in different hotels across the country. EquityRoots allows investors to select multiple assets, affiliated with different brands and located in various geographic territories.

Institutional Grade Assets

Next, it allow hotel investors to own a piece of an institutional grade quality hotel. Let me explain a little further. The average hotel groups and hospitality groups have the ability to build a standard 80-120 room hotel in a suburb, where barriers to entry and construction costs are often lower. However, in center city urban markets – like Chicago and New York – investors often encounter high barriers to entry and substantially higher construction costs. Deals in such markets can become out-of-reach for traditional hoteliers and real estate investors. This is where crowdfunding kicks in. By pooling capital from everyone, it allows combined leverage of the crowd to pursue a higher-grade, higher-quality deal. It’s something usually reserved for institutions –  REITs and insurance companies as I mentioned.

No Middleman and Commissions

Another advantage is removing middlemen and commissions. The crowdfunding process is very clean and simple. Our crowdfunding platform doesn’t allow broker fees or commissions for buying and selling the investment. EquityRoots aims to make every penny of your dollar count in the investment.

 

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Ownership Beyond Paper

Investing in property and buildings that you can see and visit is probably one last advantage I’d like to share. Hotel crowdfunding investments are markedly different than paper stocks and bonds – paper certificates that we trade on by speculation and can never actually “see” in the same sense that you can see and visit a hotel you invest in. Real estate is an investment that you’ll always be able to see. It has real property interest and improvements on the land.

Conclusion

These are just a handful of the reasons why hotel crowdfunding is such a game changer – not only does it harness the power of real estate crowdfunding, but it also allows real estate investors new and old to gain access to those high-barrier markets. EquityRoots is hotel crowdfunding, democratized for today’s investors.

 

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Hotel Crowdfunding vs REIT Investments

4 min read

Hotel Crowdfunding vs. REIT Investments — Investing Tools for the 21st Century

The 21st century has brought about quite a few developments in the real estate industry. As with most industries, technology has played a huge role in propelling the real estate industry forward. Two have jumped to the forefront within the real-estate industry: Crowdfunding and Real Estate Investment Trusts (REITs).  These two innovations – particularly as they relate to hotel crowdfunding, are alternatives to the traditional investing methods. Now, many investors wonder how to best utilize hotel crowdfunding and REITs for their investment or capital raising needs.

What’s so Special about Crowdfunding for Hotels?

With the passing of the Jumpstart Our Business Startups Act of 2012 (JOBS Act), online platforms such as EquityRoots can now solicit the sale of real estate backed securities to prospective investors by registering Form D with the SEC—the Security and Exchange Commission, or qualifying for an exemption. When using general solicitation, all purchasers of the public offering (in this case hotel assets) must have accredited investor status. The JOBS Act has also paved way for non-accredited investors to participate.  More recently, and under newer offering types like Title IV Regulation A+, unaccredited investors can participate under certain limitations.  This opens up the possibility for online platforms to extend investment opportunities to everyone, not just accredited investors anymore.

Under these circumstances, hotels are a great asset class to crowdfund because of its existing large and loyal customer bases associated with each of the top Hotel chains such as Marriot, IHG, Hyatt and Hilton.  In most cases, commercial real estate like hotels yield investors a greater rate of return than residential real estate investments.  Equity crowdfunding investments can easily exceed the typical returns from residential real estate, often seeing a rate of return above 20% when factoring 5-year holding periods and including the disposition proceeds.  The cash flow performance of hotel assets can also impress investors, especially when the development is backed by a strong reservation system and strong brand.  Crowdfunding is not limited to equity, you can also crowdfund a mortgage or a business loan.

 

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What’s the infatuation with REIT(s)?

Real Estate Investment Trusts (REITs) didn’t start to matriculate in the investment marketplace until the 1960s—when Congress introduced this investing tool into the U.S. economy. What is a REIT? By definition, it is a corporation that owns and operates income producing real estate. More specifically, it joins the capital of several investors and investors earn a share of the income produced, yielding a 8.8% rate of return averaged over the last 10 years.

A REIT offers investment flexibility at a reasonable entry price. REIT(s) can invest in multiple asset classes such as retail, residential, healthcare, offices. and for each of these asset classes, investors can earn a share of the income produced. Many people find REIT(s) an attractive investment because of it’s liquidity, meaning you can wake up and sell it if you need the cash.  Be weary, certain REIT’s often have restrictions on when and how much you can sell.

Conclusion & Comparison

After comparing the two investment tools, it’s clear that each has their pros and cons. A REIT’s ability to earn a reasonable rate of return and the liquid nature of the investment may be a good fit for some people. But for the savvier investor that can decipher between good/bad markets and good/bad flags, they have multiple options on what they can invest into.  It is not uncommon for online investors to yield a higher rate of return through a variety of equity and debt instruments via crowdfunding, and outperform their REIT counterparts.  Real estate and hotel crowdfunding may allow people to diversify their portfolio by personal preferences that are strategically better than a giant pool of assets accumulated over time.

The same cannot be said of REIT(s).  Essentially, a REIT is a pool of multiple properties that you are investing into.  Sometimes the REIT picks good apples and sometimes it picks bad apples, and sometimes the good ones go bad over time, you’re essentially investing into the average. REIT(s) do not allow the investor to pick and choose which investment type they would like to fund, whereas crowdfunding gives control back to the investor and allows them to choose investments that may be most suitable for them, sorting by debt, equity, brand, flag, geographic market, hold period, etc.

Remember, that all investments come with risk.  Investing is inherently taking on some form of risk for a potential reward.  And although people have 24/7 internet access to crowdfunding platforms, they should consult an attorney or financial advisor prior to investing.  Crowdfunding platforms like www.equityroots.com enable its online investors to easily share due-diligence documents and investment contracts with their attorney prior to investing.  Past performance is never a guarantee of the future.

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EquityRoots brings crowdfunding to hotels

2 min read

Official Press Release

EquityRoots.com, a brand backed by lawyers, hoteliers, and land-use experts is an online crowdfunding platform exclusively dedicated to offering investment opportunities in branded hotels, assisted living facilities, and other lodging assets. The team at EquityRoots.com has developed and launched an online platform to offer prospective investors, both domestically and internationally, a chance to participate and invest into highly rewarding franchised hotel assets by Marriott, Hilton, IHG, Starwood, and Hyatt. Similarly, hotel owners may use the platforms to find equity partners or get a loan from the public.

However, all funding requests undergo a strenuous vetting process before EquityRoots.com chooses to conduct a public offering and allow registered website users to perform due-diligence, sign contracts, and invest with the click of a button. It’s worth noting how simplified and efficient the real-estate investment process becomes without brokers, middlemen, or commissions. This is the essence of crowdfunding.

EquityRoots.com approved and launched its first offering for a dual-branded IHG project in a prominent NW suburb of Chicago – Schaumburg, IL. The hotels will be surrounded by 2.4 million square feet of Class-A office and around the corner from the 3rd largest mall in the country. In general, crowdfunding has opened the doors for savvy investors from all over the world to pool capital and invest side-by-side with proven industry players. Online capital formation has allowed Equityroots.com to take advantage of the accessibility of the Internet and the vast networks of friends, family, and professional networks that stay connected through it. With recent legislation like the Jumpstart Our Business Startups Act, EquityRoots has and will continue to democratize the investment marketplace.

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EquityRoots raises more than $2M within 72 Hours

2 min read

 Official Press Release

EquityRoots.com, a brand backed by lawyers, hoteliers, and land-use experts is an online crowdfunding platform exclusively dedicated to offering investment opportunities in branded hotel assets. The team at EquityRoots.com has developed and launched an online platform to offer prospective investors, both domestically and internationally, a chance to participate and invest into highly rewarding franchised hotel assets by Marriot, Hilton, IHG, Starwood, and Hyatt. Similarly, hotel owners may use the platform to find equity partners or get a loan from the public. However, all funding requests undergo a strenuous vetting process before EquityRoots.com chooses to conduct a public offering and allow registered website users to perform due-diligence, sign contracts, and invest with the click of a button. It’s worth noting how simplified and efficient the real-estate investment process becomes without brokers, middlemen, or commissions. This is the very essence of crowdfunding.

EquityRoots.com recently approved and launched its first public offering for a dual branded IHG new-construction project in Schaumburg, Illinois— a prominent corporate-suburban market of Chicago. The hotels will be surrounded by 2.4 million square feet of Class-A office space on a site with expressway visibility and minutes from the 10th largest mall in the country. Development plans will feature a full-service brand paired with a Limited-Service flag, efficiently sharing a swimming pool, patio, and fitness center. The public offering raised more than $2 million within the first 72 hours.

In general, crowdfunding has opened the doors for savvy investors from all over the world to pool capital and invest side-by-side with proven industry players. Online capital formation has allowed EquityRoots.com to take advantage of the accessibility of the Internet and the vast networks of friends, family, and professional networks that stay connected through it. With recent legislation like the Jumpstart Our Business Startups Act, EquityRoots has and will continue to democratize the investment marketplace.

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EquityRoots.com to Democratize the Hotel Investment Space

2 min read

Official Press Release

After the Jumpstart our Business Startups (JOBS) Act of 2012, it seems like there has been vibrant excitement surrounding the concept of raising capital for real-estate projects via crowdfunding.  Crowdfunding is the window into democratizing the investment marketplace, allowing everyday-people a chance to participate and own a fractional interest in the project.  Equityroots.com is an online platform backed by lawyers, land-use experts, and hotel owners- aiming to raise capital for well-planned hotel projects.

Seven young experts in various areas of law, business, and technology are responsible for starting this novel firm—EquityRoots.com—which was inspired by recent bipartisan job creation legislation, also known as the Jumpstart our Business Startups (JOBS) Act of 2012.

EquityRoots.com provides a crowd of investors the opportunity to invest in hotels and other real estate assets while maintaining security on real property.  Just about anyone can become part of the crowd when they sign up for a free account online. There is no role for middlemen—brokers or commission agents. EquityRoots.com will allow even the smallest investors the opportunity to pool capital, allowing ordinary people to invest side-by-side with veteran real-estate developers.

The goal is to offer a platform accessible to the entire world while stressing the need to democratize the real estate business—thus allowing everyday people to have an opportunity. This includes investors within the U.S. and abroad. Each investor will be able to view current deals on equityroots.com and pick a project that they would like to fund. Additionally, they can sign contracts, perform due-diligence, and safely transfer funds to escrow with the click of a button.  They have all the tools to manage a portfolio of holdings through their online account.

Foreign Investors and EB-5 Visas

Foreign investors are not excluded from participating.  In fact, EquityRoots.com offers investment opportunities to foreign investors as well. Staff attorneys will file EB-5 visa petitions on behalf of a foreign investor to immigration authorities, which will allow investors from India, China, Russia, or even from Brazil to become permanent residents in the United States if an individual invests at least $1 million in an equityroots.com hotel offering where 10 American jobs are created.

Business and hotel owners may submit their respective project for funding online as well—where the staff at EquityRoots must pre-vet, underwrite, and approve the project before conducting a public offering.

“The objective is to offer assets that are healthy for the local economy, and have the potential of bringing healthy returns for its stakeholders and investors,” says Bhavik Dani, the Founder and Deal-flow officer of EquityRoots.com.  “It’s about time the principles of democracy meet the fundamentals of real estate investing, letting the masses have a shot at it,” he adds.

To learn more about crowdfunding and hotel investments, information can be found at www.equityroots.com or you can call (312)483-2200.  Equityroots.com is proudly headquartered in Schaumburg, IL.

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