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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Do Brands Still Matter in 2017?

5 min read

Are Millennials Blind to Hotel Brands?

Do brand preferences still matter in the Millennial generation? This question comes up because Millennials have shown an emerging taste for untraditional, decentralized, and independent local providers of goods and services in what is commonly referred to as the “sharing economy”. The sharing economy has undoubtedly made an impact across multiple industries.  Sharing economy leaders like Uber and Airbnb are estimated to grow to $335 billion by 2025. This significant growth leaves many hoteliers and investors alike wondering how the hotel industry will continue to change moving forward. Many are also asking if hotel brands matter at all? After all, Millennials seem to be happy with online travel agents (OTA’s) where brand loyalty doesn’t matter, or online platforms like Airbnb which reveal a preference for more communal, local, and location-authentic lodging experiences.

Are Millennials Blind to Hotel Brands?

Despite higher preferences than their older counterparts, Millennials still show strong preferences for branded hotels.

The travel and hospitality marketing firm MMGY Global launched a study hoping to answer questions about these changing hospitality preferences among American travelers. (You can check out the full article here.) Peter Yesawich from MMGY Global has some great insights worth checking out, and below is a snippet of that report:

MMGY Global

Source: MMGY Global

Highlights from the Study

Our team at EquityRoots also wanted to take a look at the study results to find a conclusive answer on whether or not hotel brands will still matter into the future.

In short, yes – brands still matter, and investing in the right hotels can still lead to a fruitful real estate investment.  It’s true that Millennials still show more interest in a shared economy, especially compared to other age demographics. Knowing this, are hotels still solid real estate investments? Yes, of course they are. Millennials’ preferences are still similar to their older counterparts, including high preferences for full-service flags like Hilton, Marriott, and IHG (77%) as well as all-suites properties (70%). Looking at cumulative interest across all age groups, we see that big brand hotels are still preferred by a vast majority.

The rise of the sharing economy doesn’t take away from brand loyalty. Let’s take a look at our Millennial Airbnb travelers as a case-in-point. Bed and breakfast operations have existed way long before Airbnb (and even before the rise of hotel room standardization in products like Hilton and Holiday Inn). However, brands like Airbnb and HomeAway are streamlining alternative lodging, gaining strong loyal users. Even though Airbnb users are staying in different hosts’ accommodations from trip to trip, many Airbnb users continue to use only the Airbnb platform to find those rooms. In other words, they are familiar with the brand Airbnb and choose to book through there the same way that many travelers today maintain degrees of loyalty among the Hilton or IHG or Marriott. Despite the huge variance that might exist on Airbnb’s platform, users have come to Airbnb repeatedly with some sense of standardization and expectations.

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Hotel Brands Continue to Evolve

The question now becomes “how do current hotel brands adjust to capture the sharing economy audience?” It’s a question that hotels are already taking steps to answer including by:  

– Developing new hotel products like Marriott’s Moxy, Hilton’s Tru, and IHG’s Avid that target the emerging Millennial preferences

– Partnering with Airbnb to provide food and beverage solutions

– Offering “local experiences” and trips that are commonly utilized by the sharing economy.

The hotel investor can rest at ease. Hotel products from strong, established hotel brands aren’t going away anytime soon. Corporate travelers and companies still prefer lodging with hotels, considering hotel brand benefits such as loyalty points and more established quality standards across a wealth of hotel franchise locations. If anything, the hotel industry is thriving, continuing a trend of growth since 2010 as hotel demand increases faster than hotel supply. On top of this increasing demand, hotel companies continue to innovate and appeal to travelers, whether it be through adopting new food and beverage options, creating more communal living arrangements or utilizing the latest technology to provide travelers with instant check-in and other amenities. As the hotel industry continues to evolve, hotel investors will need to keep a fresh eye open for both strong performers in the present day, as well as potential performers in the future.

Sources

“2017 Set to Bring Modest Growth for U.S. Hotel Industry.” Zacks Equity Research. Jul 17, 2017. NASDAQ. 

“Global Portrait of American Travelers.” MMGY Global.

Moyer, Liz. “Hotels, Feeling the Pinch of Airbnb, Promote Local Experiences.” May 29, 2017. The New York Times. 

Simon, Elaine. “Food-and-beverage an opportunity for hotels, Airbnb to partner.” Sep 22, 2017. Hotel Management. 

Yaraghi, Niam and Ravi, Shamika. “The Current and Future State of the Sharing Economy.” Brookings India. 

 

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1031 Exchange: Defer Your Tax Obligations

3 min read

1031 Exchange- Defer Your Tax Obligations

Investing in hotels and real estate continues to be one of the best ways to build your wealth, grow your portfolio, and minimize your taxes. Thanks to Section 1031 of the Internal Revenue Code, investors are able to enjoy these advantages.

What Is Section 1031?

Section 1031 of the Internal Revenue Code allows an owner of any business or investment property to defer paying federal capital gains taxes and depreciation recapture if they exchange business or investment properties of like-kind. The 1031 Exchange allows you to swap properties or businesses while ignoring the taxable gains and reinvesting it into more valuable property. Essentially investors are using money that would otherwise be due in taxes to continue funding a bigger portfolio.

What are the Benefits?

There are numerous benefits that can be the result of a 1031 Exchange, but there are a number of requirements that must be met in order to complete an exchange. The most obvious benefit of a 1031 Exchange is tax deferral. The true power, though, lies in what comes as a result. Depending on your investment objective, a 1031 Exchange offers a wealth of opportunity.

Preserve Equity

If you are looking to preserve your equity, a 1031 Exchange can do that. Tax deferral will allow your initial investment to continue to grow. And since there’s no limit on how many times you can do a 1031 Exchange, you can defer indefinitely and continue to reap the benefits.

Purchasing Power

Or if you’re simply looking to increase your purchasing power, a 1031 Exchange can do that too. By allowing you to use all the sale proceeds- money that would otherwise be tied up in taxes- you can leverage it into more valuable real estate, which can subsequently increase the return on your investment by producing more cash flow and greater depreciation values.

Diversify Investments

And if you’re looking to diversify your portfolio and improve your investment position, a 1031 Exchange can do that too! Although this tax provision is limited in scope to only property located within the US, diversifying into different geographic regions or into different types of business or investment properties may be desirable for you or your business.

But if you’re looking to split up property or consolidate properties, a 1031 Exchange can do that too! Allowing you to roll over the gain from property to property, gives you the option to exchange a large property and split up the gain among several smaller properties or to exchange multiple properties and consolidate the gain into one larger property.

EquityRoots - Hotel Real Estate Investments Platform

Is it Right For Me?

A 1031 Exchange may be just the thing if you are intending to sell business or investment property, and you plan to buy a business or investment property of like-kind, within 180 days following the closing of your relinquished property.

It is ideal for taxpayers looking to sell their appreciated property–a low tax basis, business or investment property that has been held for more than one year. However, it should not be utilized if you have recently refinanced the property you want to sell, nor is it recommended if the transaction will result in a capital loss.

It’s important to know, though, that 1031 Exchanges are subject to strict rules. And depending on the type of transaction involved, these can sometimes be very complex. However, the use of a qualified intermediary to coordinate the essentials is imperative to the success of any exchange. Despite its complexity, though, 1031 Exchanges remain a very powerful investment strategy- that allows ‘real estate to help defer your tax obligations!

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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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