Invest in fractionalized rental properties
Invest in farmland
Investments
$15,000
The minimum investment on AcreTrader varies by listing, generally starting at $15,000, with some past deals ranging from $3,000 to $100,000. This range is determined by factors such as the size of the offering and the price per acre.
Moderate Risk
3/5
Investing with Lofty carries typical real estate investment risks, including market volatility, economic changes, and property management challenges. Additionally, the use of cryptocurrency and tokenization presents legal and regulatory uncertainties.
Moderate Risk
3/5
Investing in AcreTrader involves risks like casualty, condemnation, and eminent domain, common to real estate investments.
Moderate Liquidity
2/5
Lofty provides liquidity by allowing investors to list their property tokens for sale on the marketplace at any time, with a 2.5% transaction fee. Orders are held in escrow and have a 30-day expiration.
Minimum Liquidity
1/5
AcreTrader investments are considered illiquid, meaning investors should be prepared to hold their investments for the specified duration. While it may be possible to sell shares in a private transaction after this period, there is no established market for them, making resale uncertain.
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Low Return
5 %
Lofty offers a 5% cash on cash return, with token values updating monthly based on HouseCanary's Automated Valuation Model (AVM).
High Return
9.4-30.3 %
The returns from investing in AcreTrader vary, with historical examples showing realized internal rates of return (IRR) ranging from 9.4% to 30.3% over holding periods between 1.7 and 4.2 years. These variations highlight the potential for both moderate and significant returns, depending on the specific investment and market conditions.
Short-term Investment
1 year
Investment time horizon on Lofty is not fixed and is determined by property owners' collective decision on when to sell through the governance system.
Long-term Investment
3-10 years
AcreTrader investments target hold periods of 3 to 10 years, though this can vary based on market conditions and sale opportunities. Properties may sell earlier or extend beyond the target period, depending on whether favorable buying offers arise or if market conditions dictate a longer hold.
Who can invest
International
Investors from the US and abroad can invest with Lofty, excluding those from OFAC-sanctioned countries.
Who can invest
United States
Investing on the AcreTrader platform is limited to accredited investors, as defined by SEC regulations. Non-U.S. citizens can invest if they are legal residents of the United States.
Moderate Volatility
3/5
The value of assets on Lofty's platform can be volatile, influenced by economic trends, interest rates, and real estate market conditions, potentially leading to variable financial outcomes for investors.
Moderate Volatility
3/5
Farmland assets on AcreTrader typically exhibit lower volatility compared to stocks and bonds, offering a more stable investment option due to the steady demand for agricultural products and the land's intrinsic value.
Regulation and audits
Audited
Lofty's marketplace transactions are executed using a smart contract on the Algorand blockchain, which has been audited by CertiK for security.
Regulation and audits
SEC Regulated
AcreTrader is regulated by the Securities Exchange Act of 1934, SEC rules, FINRA rules, and state laws, reflecting its commitment to transparency and investor protection. As a registered Broker-Dealer, it must adhere to strict financial standards, undergo regular audits, and comply with ethical practices to maintain its standing and ensure the security of its investors' assets.
Insurance
No
Lofty's specific insurance details are not provided, but properties on investment platforms are usually insured against physical damage.
Insurance
Yes
AcreTrader does not explicitly mention specific insurance coverage for investments on its platform. Generally, real estate investments, including farmland, are insured against risks like natural disasters and fire to protect investment value.
Payouts
Rental Income
Lofty provides daily rental income to investors, which can be withdrawn at any time through various methods including ACH, PayPal, and cryptocurrency options.
Payouts
Dividends
AcreTrader may distribute net cash from annual income to investors after operating expenses, typically once a year in December. These distributions, based on pro rata ownership, are not guaranteed. If distributed, funds go to the investor's AcreTrader wallet or, for SDIRA or IRA accounts, to the custodian.
Withdrawals
Investors on Lofty can sell tokens anytime on the marketplace and withdraw proceeds using methods like bank transfer, PayPal, or cryptocurrency.
Withdrawals
Investors can typically get their money back when the property they've invested in is sold at the end of its expected hold period, which may range from 3 to 10 years.
Extra Fees
Yes
AcreTrader charges investors initial closing costs around 2% of the offering value and an annual 0.75% servicing fee of the land's value for management. The primary revenue comes from a 5% commission on the farm's sale, charged to the seller. There are no “carried interest fees.” Fee structures vary by deal, so reviewing offering documents is recommended for specifics.
Taxes
Tax Form
Lofty provides US residents with pre-filled 1099 tax forms for income and capital gains reporting. Non-US residents may reduce withholding taxes with forms W-8BEN or W-8BEN-E if they have a US SSN or ITIN.
Taxes
Tax Form
AcreTrader aims to provide K-1 tax forms electronically by early March, although delays can occur due to external reporting needs. Tax treatment varies: gains on land sold within a year are taxed at ordinary income rates, while longer holdings are taxed at capital gains rates. Depreciation on buildings or equipment may affect taxes.