Blog

Blackstone is raising $50B to buy the dip, but what about everyday investors?

FOMO is powerful, we get it.

The allure of trendy investment portfolios filled with celebrity-endorsed SPACs and crypto is exciting and has the potential to be rewarding. However, as evidenced by the past few months, these investments can also be very unstable — and when you wake up to see that your best positions have declined into the red, panic sets in…bear market? You may wish you had diversified more…and that you hadn’t put all your eggs in that electric vehicle company’s basket.

With the unpredictability of the stock market right now, real estate has a number of compelling characteristics that make the asset class a strong allocation in a diversified portfolio. And even though you may not hear about it as much as Elon’s new offspring or the NFT industry, real estate has actually been the most favored investment of Americans for eight years in a row.²

Alright, but why?

  1. Leverage: Leverage uses borrowed capital to increase the potential return of an investment. This is because the cost of debt financing, such as a bank loan, is usually cheaper than the unleveraged returns a property can generate
  2. Income: Real estate provides regular income in the form of contractual rent, which helps to manage volatility
  3. Appreciation: Real estate can offer long-term price appreciation in the form of increased property values and optimization of an asset’s performance through active management
  4. Tax Shield: The primary tax benefit of investing in real estate is the ability to take depreciation deductions. Depreciation deductions allow real estate investors to reduce taxable income on rental profits
  5. Low correlation with the market: Real estate returns also tend to have low correlation with the performance of both equity and fixed income investments
  6. Options: Within these broader investment categories, it is possible to diversify even further – by geography, sector (commercial, retail, residential, vacation), company size, to just name a few

And if you don’t believe us, just take a look at AUM backed stocks like American Homes for Rent ($AM4R) and Invitation Homes ($INVH), compared to tech stocks in recent months:

Inflation concerns? According to Ali Wolfe, Chief Economist at Zonda Housing Market Research, “If you have cash and are expecting inflation, you want to think about where you can put your money so it doesn’t lose value. Housing is commonly looked at as a good inflation hedge”³ So ask yourself, what are you going to do to protect yourself?

Top KPIs:

  • REITs are in: Pension funds are increasingly investing in real estate investment trusts — a vote of confidence in the sector.⁴
  • Blackstone is buying up $13 billion in student housing and prepping a record $50 billion vehicle to scoop up even more homes.
  • reAlpha is taking an even more innovative approach…

reAlpha’s take

At reAlpha, we are strong advocates of diversification and believe real estate investments can play a critical role in a portfolio. However, we like to think that we add a modern and potentially more lucrative twist to traditional real estate with our focus on the short-term rental vertical. In addition to the broader benefits provided by real estate, there are even more advantages of investing in short-term rentals:

  1. +70% higher returns: short-term rentals have the potential to generate 70% or higher revenue than long-term rentals*.
  2. Demand > Supply: There is high demand for short-term rentals – this asset class, and the disruption it is bringing to hospitality and lodging, has been one of the biggest stories in recent real estate history. Airbnb CEO Brian Chesky has said that Airbnb is short millions of hosts.⁵
  3. Dynamic pricing, quick payment: short-term rentals offer access to diversified renter pools and can provide added security that users will pay their rent in full and on time; given the short-term nature of the leases, owners can adjust rent and stay lengths fluidly in conjunction with demand.
  4. Income levers: Airbnb has created a hybrid economy between real estate and digital hospitality — future innovation and additional revenue streams from guests is a long term play for reAlpha.

But we aren’t just pursuing this market for ourselves…(*cough* Blackstone)...our mission is to provide everyday investors entry into the short-term rental market. We’re combining the security of real estate with robinhood-like accessibility and the business model of the future: Airbnb. And we are taking that a step further by allowing you to become a shareholder in the company itself. We are raising our Regulation A round so that you have a shot at this emerging market. And with your backing, we will be well positioned to grow our portfolio if and when the pending correction in housing prices takes place.

So, consider adding vacation rental real estate to your diversification strategy. Get in early by investing in reAlpha for as little as $1,000.

INVEST NOW

Terms of Use
Privacy Policy
DISCLAIMER

EQUITY CROWDFUNDING INVESTMENTS IN PRIVATE PLACEMENTS, AND START-UP INVESTMENTS IN PARTICULAR, ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND THOSE INVESTORS WHO CANNOT AFFORD TO LOSE THEIR ENTIRE INVESTMENT SHOULD NOT INVEST IN START-UPS. COMPANIES SEEKING STARTUP INVESTMENT THROUGH EQUITY CROWDFUNDING TEND TO BE IN EARLIER STAGES OF DEVELOPMENT AND THEIR BUSINESS MODEL, PRODUCTS AND SERVICES MAY NOT YET BE FULLY DEVELOPED, OPERATIONAL OR TESTED IN THE PUBLIC MARKETPLACE. THERE IS NO GUARANTEE THAT THE STATED VALUATION AND OTHER TERMS ARE ACCURATE OR IN AGREEMENT WITH THE MARKET OR INDUSTRY VALUATIONS. FURTHER, INVESTORS MAY RECEIVE ILLIQUID AND/OR RESTRICTED STOCK THAT MAY BE SUBJECT TO HOLDING PERIOD REQUIREMENTS AND/OR LIQUIDITY CONCERNS.

FORWARD-LOOKING STATEMENTS

ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT, CONTAINED IN THIS WEBSITE CONSTITUTE “FORWARD-LOOKING STATEMENTS”AND ARE BASED ON THE REASONABLE EXPECTATIONS, ESTIMATES AND PROJECTIONS OF REALPHA ASSET MANAGEMENT, INC. (THE “COMPANY”) AND THE COMPANY’S MANAGEMENT AS OF THE DATE OF THIS PRESENTATION. THE WORDS “PLANS,” “EXPECTS,” OR “DOES NOT EXPECT,” “IS EXPECTED,” “BUDGET,” “SCHEDULED,” “ESTIMATES,” “FORECASTS,” “INTENDS,” “ANTICIPATES,” OR “DOES NOT ANTICIPATE,” OR “BELIEVES,” OR VARIATIONS OF SUCH WORDS AND PHRASES OR STATEMENTS THAT CERTAIN ACTIONS, EVENTS OR RESULTS “MAY,” “COULD,” “WOULD,” “MIGHT,” “WILL” OR “WILL BE TAKEN,” “OCCUR” OR “BE ACHIEVED” AND SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, STATEMENTS REGARDING OUR PROJECTED NUMBER OF PROPERTIES, REVENUES, ASSETS UNDER MANAGEMENT, VALUATION, INVESTMENT RETURNS, EXPECTED CUSTOMER DEMAND, AND THE COMPANY’S BUSINESS STRATEGY. FORWARD-LOOKING STATEMENTS ARE NECESSARILY BASED UPON A NUMBER OF ESTIMATES AND ASSUMPTIONS THAT, WHILE CONSIDERED REASONABLE BY THE COMPANY’S MANAGEMENT AS OF THE DATE OF SUCH STATEMENTS, ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES. THE ESTIMATES AND ASSUMPTIONS CONTAINED IN THIS PRESENTATION, WHICH MAY PROVE TO BE INCORRECT, INCLUDE, BUT ARE NOT LIMITED TO, THE VARIOUS ASSUMPTIONS OF THE COMPANY SET FORTH HEREIN. KNOWN AND UNKNOWN FACTORS COULD CAUSE THE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO, OUR SUCCESS IN RAISING CAPITAL THROUGH OUR REGULATION A OFFERING AND THROUGH OUR PLANNED SUBSEQUENT OFFERING TO SYNDICATE MEMBERS, OUR ABILITY TO OBTAIN THE FINANCING REQUIRED FOR THE DEBT PORTION OF THE PURCHASE PRICE OF PROPERTIES OUR ABILITY TO OBTAIN THE DEBT FINANCING REQUIRED TO PURCHASE PROPERTIES, OUR ABILITY TO ACQUIRE THE NUMBER OF RESIDENTIAL PROPERTIES WITHIN OUR PROJECTED TIME FRAMES, CHANGES IN DEMAND, INDUSTRY COMPETITION, LEGISLATIVE, FISCAL AND REGULATORY DEVELOPMENTS, ECONOMIC AND FINANCIAL MARKET CONDITIONS INCLUDING BUT NOT LIMITED TO THE CURRENT COVID-19 GLOBAL PANDEMIC OR FUTURE LAWSUITS. MORE INFORMATION ON THE FACTORS, RISKS AND UNCERTAINTIES THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES IS INCLUDED IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING IN THE “RISK FACTORS” SECTIONS OF OUR OFFERING STATEMENT ON FORM 1-A. MANY OF THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT THE COMPANY’S ACTUAL RESULTS AND COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN ANY FORWARD-LOOKING STATEMENTS MADE BY, OR ON BEHALF OF, THE COMPANY. THERE CAN BE NO ASSURANCE THAT FORWARD-LOOKING STATEMENTS WILL PROVE TO BE ACCURATE, AS ACTUAL RESULTS AND FUTURE EVENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SUCH STATEMENTS. ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS PRESENTATION ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS. THESE FACTORS ARE NOT INTENDED TO REPRESENT A COMPLETE LIST OF THE FACTORS THAT COULD AFFECT THE COMPANY. THE COMPANY DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE LAW OR REGULATION. THE READER IS CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS.