It should not come as a surprise that Canadian real estate has been on fire with no end in sight. This has made home ownership a challenge for most, especially first time buyers.
addy
This is where addy comes in. addy is a crowdfunding platform. With addy you can become a real estate investor for a fraction of the cost by buying shares in a property. addy offers the option to own a slice of a property for an amount that fits your budget. You don’t have to worry about down payments or other fees that come with owning a property.
At the moment, addy is only operating in Alberta, British Columbia, Quebec, and Ontario. With the current success of this platform, I won’t be surprised if it spreads across the country in all the provinces.
How does addy work?
addy offers a chance of owning a share in a property for a little as $1 or as much as $1,500. Why limit investment to $1,500? It is by design to allow as many people to be able to take advantage of an opportunity to invest in real estate.
How it works:
- addy identifies a property and does its due diligence with decisions to invest in a property made by the real estate acquisitions team, their investment committee and their Board of Directors.
- Once a decision is made to invest in a property it is divided into $1 units. So if a property investment is $700,000, it is divided into 700,000 units.
- Each investor is limited to 1,500 units in a property. But for those that want to diversify and invest more money, there is no limit to the number of properties you can invest in.
addy membership
In order to start investing in properties through addy you will have to become a member first. There are two types of membership. Charter or Believer.
Properties
addy property investments are divided into four categories: core, core plus, value add, and opportunistic.
Core
This type of property is suited for investors who are looking a stable income with minimal risk but it also means lower return. These properties are acquired to be held for the long-term.
Core Plus
These properties are for investors who are willing to take on low to moderate risk which also means a potential of better returns than Core properties.
This is done through property improvements and management efficiencies.
Value-Add
Value-add properties carry higher risk in return for higher returns. Investors should expect to wait longer before they can expect to see returns on their investment. This is due to physical upgrades, better management, added services, and marketing.
Opportunistic
Opportunistic properties are higher risk with investors not realizing returns on their investments for three or more years. These properties do tend to offer higher returns once value adding activities such as repurposing the building for another use.
Is Addy Invest Legit?
addy is a legitimate real estate company but you should understand the risks of investing through addy. It is not a get rich quick scheme. As an investor be prepared not to see returns on your investments in the short-term.
Make informed decisions by carefully reading the Offering Memorandum of each property. If you are looking for stable income then Core properties may be the route for you. Given that addy lets investors buy shares in a property for $1 you as an investor can start low and move from there as you get more comfortable with the process.
What is the difference between addy and REIT?
While on the surface addy and REIT may look similar, they are not the same.
REIT allows you to invest in a basket of properties that you basically don’t have a say in choosing. addy on the other hand, allows you to choose properties you want to invest in.
With addy you are in control, by going through the Offering Memorandum and deciding if a particular property aligns with your investing goals.
Verdict
With the Canadian real estate market exploding at an exponential rate it is becoming increasingly difficult to get involved in real estate investment. addy is providing an alternative by making it affordable to invest. However, there are some key points to consider when investing through addy.
You need a membership to invest, which will cost you at least $25. If you are paying $25 in membership then you will have to invest more than $1 to be able to at least cover your annual costs.
