Our in-depth review compiles crucial details to help you assess whether Concreit is legit, ensuring you make informed investment decisions.
What is Concreit and how does it work?
Concreit offers a platform for individuals to invest in the real estate market through fractional ownership. This means investors can buy shares in a real estate portfolio rather than having to purchase entire properties themselves. Concreit manages these investments, promising a hassle-free experience for its users, including passive income, an easy investment process, and the potential for both income growth and portfolio appreciation.
The process to start investing with Concreit is straightforward. It begins with downloading the Concreit mobile app or using their web platform to set up an account. New users are prompted to create an Investor Profile by providing some basic personal information. Following account setup, investors can choose their investment strategy. Options include investing in Concreit's flagship fund, which focuses on cash flow, or selecting fractional investments in specific rental homes, known as Home Shares.
After selecting an investment strategy, users link their bank account to fund their investment. The funds from all Concreit investors are pooled together and managed by a professional Fund Manager. This pooled investment approach allows individuals to participate in real estate investments with less capital than would be required to buy properties outright. Investors can then relax as Concreit's team manages the portfolio, with updates and project timelines for each asset shared through an in-app newsfeed.
Investors start receiving dividends once they own shares and can monitor their total investment balance through the Concreit dashboard. This platform aims to make real estate investment accessible and manageable for individuals without requiring a significant upfront investment or extensive real estate knowledge.
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How risky is Concreit?
3/5
— Moderate RiskInvesting with Concreit, like with any investment platform, carries certain risks that potential investors should carefully consider:
1. Speculative Nature: Investments on the Concreit platform are speculative, carrying the potential for the complete loss of capital. This highlights the inherent risk in these investment opportunities, where returns are not guaranteed, and there is a possibility of losing the entirety of the invested amount.
2. Illiquidity: The platform's investments are illiquid, meaning it might be difficult to quickly sell or exit the investment without a significant impact on its value. There is no guarantee that investors will be able to redeem their investments through Concreit's redemption program when they wish to.
3. Limited Operating History: Concreit's relatively limited history of operations may add an element of uncertainty regarding its long-term viability and the sustained management of its investment offerings.
4. Blind Pool Risk: Investing in a blind pool means that investors put money into a fund without specific knowledge of the particular properties or assets that will be acquired. This lack of transparency can add to the risk profile.
5. Conflicts of Interest: Potential conflicts of interest may arise in the management and operation of the investments, which could affect investment outcomes.
6. Real Estate Market Risks: Investments are sensitive to the overall health of the real estate market, which can be influenced by factors such as changes in property values, interest rates, property taxes, and the economic and regulatory environment. These investments are also subject to the risks associated with direct real estate ownership, including the potential for loss of principal.
7. Non-Diversification Risks: Portfolios that are concentrated in real estate assets may face higher volatility and risk due to lack of diversification.
8. Past Performance Not Indicative of Future Results: Historical returns or projections are not reliable indicators of future performance, emphasizing that past success does not guarantee future gains.
9. Risk of Total Loss: All securities involve a high degree of risk, and there is a possibility of both partial and total loss of the investment.
Potential investors are advised to thoroughly read the risk factors detailed in the offering circular and consider their own risk tolerance and investment objectives before committing capital to the platform.
How liquid is Concreit?
1/5
— Minimum LiquidityConcreit's platform offers investments that are inherently illiquid, meaning that once you invest, there is no guaranteed ability to quickly sell or redeem your investment for cash.
This is a common characteristic of real estate investments, where assets cannot be easily converted to cash without potentially affecting the investment's value. Concreit cautions that there is no assurance investors will be able to exit their investments through its redemption program, emphasizing the importance of considering the long-term nature of such investments before committing funds.
How volatile is Concreit?
3/5
— Moderate VolatilityThe volatility of assets on the Concreit platform is influenced by the nature of real estate investments, which are subject to fluctuations based on a variety of factors. Real estate values can change due to market conditions, interest rate movements, changes in property taxes, supply and demand dynamics, and the overall health of the economy.
Additionally, the cash flow from underlying real estate assets, which can affect the returns on investment, is influenced by the management skills of the issuer and the creditworthiness of borrowers.
Given that portfolios concentrated in real estate assets may not be diversified across other asset classes, they can experience price volatility and other risks associated with non-diversification.
What is the average rate of return for Concreit?
5.5 %
— Low ReturnAt Concreit, investors can anticipate a preferred return rate, which is essentially the minimum annual payout targeted before distributing any other profits. Specifically, Concreit aims to offer a 5.5% preferred return per year or more, depending on the performance of the individual investor's portfolio. This rate reflects both the strategic approach of Concreit and the prevailing market conditions.
For investors in Home Shares, returns can manifest in two primary forms: property value growth (appreciation) and cash from rental income.
1. Property Value Growth: Investors might see an increase in their equity value as the properties in which they've invested appreciate in value. This appreciation can lead to a higher return if the property is sold and the proceeds are distributed among the investors.
2. Cash from Rental Income: Concreit aims to distribute quarterly dividends derived from the rental payments it receives from tenants. The amount received by each investor is proportional to their ownership stake in the property. While future returns cannot be precisely predicted, rental properties on Concreit are estimated to yield cash dividends with annualized returns ranging between 3% to 5%.
When combining potential equity growth with rental income, investors might see an overall annual return of 8% to 14%. However, it's crucial to understand that these figures are based on historical performance, which is not a reliable indicator of future results. Concreit employs a conservative approach in its estimates, considering factors like economic trends, interest rate changes, and local real estate market dynamics, but these estimates can vary due to numerous external influences.
What is the minimum investment amount for Concreit?
$100
Concreit offers two main investment strategies with differing minimum investment requirements.
For the Cash Flow strategy, Concreit provides flexibility in terms of minimum investment amounts. While the platform does not specify an exact figure, it suggests that many investors start with a few thousand dollars. It also offers an auto-invest feature, allowing investors to automatically contribute smaller amounts on a regular basis to meet their financial goals gradually.
In the case of Home Shares, which allows investors to buy fractional shares in specific rental properties, Concreit has set a clearer minimum investment threshold. Each share in the Home Shares investment option requires a minimum investment of $100.
What is the investment time horizon for Concreit?
5-7 years
The time horizon for investments in Home Shares on Concreit is typically estimated at 5-7 years. The decision to sell a property and thus end the investment period depends on multiple factors, including economic conditions, property value appreciation potential, and the impact of any existing leases on the sales price.
Investors should consider their commitment to Concreit as long-term. However, Concreit has implemented a withdrawal program that offers a possibility for investors to have their shares redeemed, subject to certain restrictions and limitations. This means that while the estimated hold period provides a general expectation, Concreit's redemption plan may offer flexibility under specific conditions, allowing for earlier exit opportunities from the investment.
Who can invest in Concreit?
United States
Concreit is available to all US citizens or US residents who are over the age of 18. Importantly, individuals do not need to be accredited investors to participate in Concreit's investment opportunities.
Is Concreit regulated or audited?
SEC Regulated
Concreit operates as a Registered Investment Advisor (RIA), which means it is registered with the U.S. Securities and Exchange Commission (SEC).
As an RIA, Concreit is legally considered a fiduciary, obligating it to act in the best interest of its clients. This registration also subjects Concreit to regulatory oversight, compliance requirements, and periodic audits by the SEC to ensure that it adheres to industry standards and regulatory guidelines, providing an additional layer of trust and security for investors.
Is Concreit insured?
No
Investments made through Concreit are not covered by FDIC (Federal Deposit Insurance Corporation) or SIPC (Securities Investor Protection Corporation) insurance. This means that unlike traditional bank deposits or certain investment accounts, the funds invested in Concreit's real estate opportunities do not have these forms of governmental or organizational protection against loss.
Does Concreit distribute payouts?
Dividends
Dividends on Concreit are derived from the net income generated by rental properties after all applicable expenses—like property management fees, taxes, insurance, repairs, and maintenance—are deducted. These dividends represent the profit earned from the property and are influenced by consistent income, expenses, and the overall market conditions affecting the property's financial performance.
Dividends are distributed differently based on the type of investment:
- Cash Flow: Concreit aims to distribute dividends on a weekly basis when there is profit. For investors enrolled in the dividend reinvestment plan, these dividends are automatically converted into additional investments in the fund.
- Home Shares: For investments in specific properties, Concreit distributes dividends quarterly, based on the rental income generated. The dividends are directly sent to investors' bank accounts. Additionally, if a property is sold, Concreit aims to distribute any profits from the property's appreciation to investors.
How do I get my money back from Concreit?
Investors looking to withdraw their money from Concreit must navigate a few key rules and timelines:
1. Settlement Period: After investing, there's a mandatory "settlement" period before withdrawal requests can be processed. Specifically, if it's been less than 60 days since the investment was made, there's a 60-day hold before a withdrawal can be approved.
2. Withdrawal Process Time: Once a withdrawal request is submitted, the overall process to receive funds in a linked bank account can take up to 2-3 weeks. Concreit aims to distribute funds 3 to 5 business days after approval, with withdrawal requests reviewed weekly.
3. Short-term Withdrawal Fee: To discourage short-term withdrawals and to protect other investors' returns, Concreit assesses a fee for withdrawals of money invested for less than 12 months. This fee is applied to the profit portion of the withdrawal, not the initial investment. Investors will receive 100% of their principal back but will only receive 4/5 of their short-term gains. This fee is designed to minimize impact on the investor's returns by automatically selecting the oldest dividends available for withdrawal, ensuring the principal amount remains unaffected.
What are the annual fees for Concreit?
Concreit implements a straightforward fee structure for its investors based on their account balance:
1. For accounts with less than $5,000: Investors are charged a flat fee of $5 per month. This fee is directly charged to the investor's default bank account. The rationale behind this fee structure is to cover the share of underlying asset management fees, facilitating the growth and compounding of the investment balance.
2. For accounts with $5,000 or more: Investors are subject to a 1.0% annual fee. This fee is assessed at the underlying investment level and charged to the fund itself. To incur this fee structure, an account balance of $5,000 or more must be consistently maintained.
Fee Assessment Timing. Fees are assessed monthly, based on the account's ending balance on the day before the assessment. For instance, if fees are assessed on January 15th, they are calculated based on the account balance as of January 14th.
How do I handle my investments in Concreit?
On the Concreit platform, investors primarily engage in passive asset management. Once you invest in Home Shares or the flagship fund, the professional team at Concreit takes over the management of these assets. This includes making decisions on property purchases, maintenance, tenant management, and when to sell properties.
However, investors have the ability to manage their investment in terms of how much they choose to invest and in deciding whether to reinvest dividends or withdraw them. Through the Concreit app, investors can monitor their investment performance, adjust their investment strategy (for example, by changing their contribution amounts or selecting different investment options within the platform), and request redemptions according to the platform's policies.
In summary, while the actual asset management is performed by Concreit's team, investors still maintain control over their investment levels and can make strategic decisions regarding their portfolio within the framework provided by Concreit.
How does Concreit get taxed?
Concreit aims to simplify tax reporting for its investors by providing a Form 1099-DIV for each holding that generates aggregate distributions of $10 or more during the tax year. This form is crucial for investors as it details the dividends and distributions received, making the tax filing process more straightforward.
Concreit strives to have these forms prepared and available by February 1st each year.
How many investors are on Concreit?
The website received an average of 71,000 visits in the last 3 months.
Concreit has attracted 40,000 members. Additionally, these members have collectively made over 100,000 investments through the Concreit platform.
Who is the CEO of Concreit?
Sean Hsieh is the founder and CEO of Concreit.
Prior to founding Concreit, he co-founded Flowroute, where he served as the Chief Product Officer. Flowroute is recognized for its innovation in business communications, offering API-driven solutions like SMS, SIP trunking, and telecommunication resources.
Sean's career is marked by a lifelong passion for entrepreneurship, technology, culture, design, and hip hop. This passion has not only driven him to pursue ambitious projects but also enabled him to make significant contributions to Fortune 100 companies such as Apple, Linksys (Cisco), and Motorola. In these roles, he focused on introducing new marketing ventures and driving rapid growth.
