Real estate investing isn’t always open to all investors, but Collab offers the opportunity to almost anyone with its low barrier to entry.
Collab offers a unique aspect of real estate investing, focusing on student housing. Here are my thoughts on this unique real estate crowdfunding platform.
Collab Overview
Collab offers real estate crowdfunding in a unique niche — student housing. Like most crowdfunding platforms, you purchase property shares with other real estate investors.
Collab currently has three properties available for investing but is constantly adding to its lineup.
What sets Collab apart from other real estate investment opportunities is they open it to anyone, not just institutional investors.
With a minimum investment of $20, more people can invest in real estate in the busy college market.
The population of students entering post-secondary education is predicted to hit 20.3 million by 2028, opening up more possibilities for investors to enter this lucrative market.
How Collab Works
Collab obtains rental properties for student housing, owning them in an LLC. They sell shares to investors while managing the day-to-day operations of the student housing.
Investors aren’t responsible for finding tenants, managing the property, or selling it.
If you choose, the investment can be 100% passive, or you can become a part of the decentralized property management system and contribute to the property management tasks while earning more money.
Collab pays out 100% of its profits to shareholders monthly and owns at least 5% of each property to have ‘skin in the game.’
Who Can Invest Through Collab?
Collab is open to accredited and non-accredited investors over 18 years old and U.S. citizens and residents. This is unlike many other real estate investment websites open only to wealthy institutional investors.
As long as you meet the minimum investment requirements, you are on your way to becoming a real estate investor.
How Much Money Do You Need to Investment with Collab?
One of the best things about Collab is the low minimum investment requirement. You need only $20 to start investing, much less than most crowdfunding platforms that require $1,000 to $5,000 to invest in real estate.
Collab Features & Services
Real estate crowdfunding can have many features, as each platform works slightly differently. Collab is no exception; here are the top features offered by the platform.
Partial Owner of an LLC
As a real estate investor on Collab, you are a partial owner of an LLC. This makes you a co-owner of the property, along with many other investors.
You can monitor the progress on your dashboard to stay up-to-date on your property’s progress.
Property Management Opportunities
Collab doesn’t offer property management but allows any investor, community pro, or tenant to collaborate.
If you want to help manage the property, whether you’ve invested in it or not, Collab will compensate you for your time, providing another income stream.
You don’t have to commit long-term to property management. Collab posts the available tasks online, and if you qualify, you can accept and perform the task.
After completing the task, submit the results on your ‘My Tasks’ page, and Collab will deposit the funds in your ‘Collab wallet,’ which you can withdraw to your linked bank account.
Cash Distributions
Collab pays its profits monthly to investors from rent and other income streams.
You’ll receive the distributions via direct deposit to your linked bank account monthly. You’re also eligible for a portion of the capital gains when the property is sold.
Types of Properties Offered by Collab
Collab only invests in student housing properties.
They review hundreds of housing possibilities, but their distinct selection process only allows them to select the top 2% of properties viewed.
Collab’s screening process includes:
- On-site property visits
- Financial analysis by a team of professionals
- Renovation analysis to determine the property’s potential
- Analysis of the current and future markets
- Sales and refinance stress tests
Pros & Cons
Real estate investing presents risks and rewards. Here are the pros and cons to consider when investing with Collab
Pros
- A unique way to invest in real estate
- Low investment requirement
- Option to increase income streams with property management tasks
- Transparent information on all aspects of real estate investing with Collab
Cons
- Limited property type options
- Limited liquidity
How To Start Investing With Collab
Collab attracts real estate investors looking to invest in income-generating student housing. They offer fractional shares of the properties and require only a $20 minimum investment.
Here’s how to start.
1. View Available Properties
Collab’s website contains all the necessary information about the available properties. This includes all property information, such as year built, square footage, and number of bedrooms/bathrooms.
The website contains a property description, pictures, and a 3D property tour. It also includes:
- Market information: Including average household income, age of college students, and the area’s amenities
- Previous month’s property financials: View last month’s rental revenue, operating expenses, NOI, and the total dividend paid to investors
- Property documents: View documents like the property deed, use of proceeds, and risk factors
- Number of shares and loan to value: See how many shares are available and funded, as well as the LTV, to assess the investment risk
You don't have to create an account to view properties. You can browse available properties at any time.
2. Create an Account
Create an account when you’re ready to invest. You’ll provide personal information to prove who you are and link your bank or credit card to the account to begin investing.
3. Buy Shares
When you find a property you want to invest in and it’s live, click ‘purchase’ in your account to start the investment.
Follow the steps to complete your purchase. If you are interested in a property that isn’t live yet, click ‘Notify Me,’ and you’ll receive an email notification when it is available.
4. Track Your Investment
After investing, you can track your property’s progress on your dashboard 24/7. You’ll see up-to-date details about the property and financials, allowing you to stay up-to-date on its performance.
User Experience
Collab is 100% transparent with its investors, providing as much information as possible to help you make the right investment decision.
Users have a dashboard they can access 24/7 that provides all the necessary information to choose investments or track current investments.
Customer Service
Collab offers several options for customer service, including live chat, an online community, or an email option. You can also connect with Collab via social media on Facebook, Twitter, and Instagram.
Fees
Collab charges a 2% asset management fee on each property. The 2% is based on the property’s value. They also keep 20% of the equity growth, or the difference between the original and final sales price.
Collab Competitors & Alternatives
Real estate crowdfunding platforms are a popular way to invest in real estate. Here are some alternatives if you want to focus on something other than student housing.
Fundrise
Fundrise allows minimum investments of only $10, making real estate investing possible for everyone. They purchase undervalued properties, upgrade them, and share the profits with their investors.
You can invest in residential and commercial properties and offers investments as eREITs or long-term eFunds.
Arrived
Arrived allows investors to purchase fractional shares of real estate investment properties (rental properties), earning money monthly from rental income and long-term capital gains.
You need $100 to start investing in this platform that invests in residential real estate investment properties.
Frequently Asked Questions
Collab has a niche market that suits many investors looking for a new way to invest in real estate.
Is Collab Suitable for Both Experienced and Novice Investors?
Collab is great for anyone interested in diversifying their portfolio with real estate. It offers a passive real estate investment option with the opportunity to get involved in the management of the properties and add another income stream. You don’t need real estate knowledge and can capitalize on a strong real estate niche.
Can I Invest if I’m Not a Student or Alumni?
Yes, anyone over 18 who is a United States citizen and has $500 to invest can use Collab.
You don’t need to be a student or have attended the university the properties are on. However, you can live in the properties you invest in, giving you even more value from your investment.
Can I Invest in Multiple Collab Properties?
You can invest in multiple Collab properties if they are available. However, remember, each property has a different minimum investment amount, listed on the property details page. It can range from $20 to $500.
Is Collab Suitable for Mid to Long-Term Investors?
The average Collab investment is 3 to 5 years, so it’s important to only commit funds you can let sit for at least that long.
Collab does reserve the right to sell properties early, but they can also hold onto the properties long-term, keeping your money invested.
Is Investing in Collab the Best for You?
If you’re looking for a way to invest in real estate that doesn’t require thousands of dollars or a lot of involvement, check out Collab.
You can invest in the growing student housing market and earn monthly dividends and capital gains as the property appreciates.
Like any real estate investment, risks exist, so be sure to diversify and do your due diligence.
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