There’s a reason the rich get richer, including the fact that they have access to some of the most lucrative investments in the world.
Take luxury properties and other types of real estate.
As I’ve written in the past, these are exactly the kind of assets that are now skyrocketing in price due to the Federal Reserve’s unprecedented money-printing and the inflation that follows.
Yet most people without a lot of money have been unable to participate in all the upside.
After all, how is someone of modest means supposed to buy a house in Malibu or an apartment building in Sydney?
Well, today I’ll tell you how…
And no, this isn’t about Real Estate Investment Trusts (REITs).
While they continue to be a great way to invest in large property portfolios, this is something completely different…
It’s called “fractional ownership.” And it’s a game-changer.
The JOBS Act of 2012 originally paved the way for this opportunity because it allows small businesses to raise up to $50 million online from the public.
Then, in 2015, the Securities and Exchange Commission (SEC) pushed this into action by allowing small businesses to raise funds outside of wealthy, “accredited” investors and institutions.
Previously, if they wanted to raise public funds, they went through a lengthy and expensive IPO (initial public offering) process.
But now, small businesses can raise funds from Main Street investors via fractional investments.
And one of the most lucrative areas for this new trend is real estate.
The Trophy Asset of the Wealthy
From John Rockefeller to former football legend Roger Staubach… the rich have always made money from real estate.
In fact, Staubach’s real estate dealings made him $613 million – over 200 times more than he ever made as a Dallas Cowboys quarterback.
Unfortunately, the three traditional ways of accessing private real estate markets cost big bucks…
Direct purchase: If you’re a DIY investor, minimum deposits for a mortgage range from 10–20%. The median home price in the U.S. is around $200,000. And most people don’t have a spare $20,000 or $40,000 sitting around.
Real estate investment groups: This method involves pooling your money with other like-minded investors to invest in rental real estate. Most local clubs require minimums of $5,000 and up.
Private equity real estate funds: These funds are reserved for accredited investors and typically require a $100,000 minimum.
That’s why fractional investing is such an incredible opportunity for the everyday investor.
With fractional investment, the owner of an asset can list that asset on a platform… and offer shares (fractions of the asset) to investors.
For example, you could list a $100,000 rare baseball card on the Rally platform and offer investors fractions of it at $100. If the baseball card’s value rises to $1 million, a $100 fraction would increase to $1,000.
Platforms like Rally allow you to invest in collectibles while other platforms allow you to invest in private real estate, just like the wealthy. And you can access these markets from the comfort of your PC, laptop, or smartphone.
Think of fractional investing as a type of crowdfunding.
Crowdfunding is a way to raise funds online for a specific cause from hundreds, thousands, or even millions of people.
Thanks to the JOBS Act that I mentioned earlier, crowdfunding allows ordinary people to pool their money and invest in real estate projects – just as the heavy hitters have been doing for years.
How to Become a Real Estate Mogul
In some ways, crowdfunding real estate is similar to investing in a REIT.
Let’s say you buy 100 shares in a REIT. That means you own a piece of that company and the real estate it holds.
With crowdfunding, high-value assets are divvied up in much the same way.
The difference is these “shares” (and the perks of owning them) could be for anything – even a single property as opposed to a whole portfolio of buildings.
They can also come with less volatility and expense than stocks or other traditional investments.
For example, the minimum management fee for REITs is 3–4% of what you invest.
But many crowdfunding platforms don’t charge fees to their investors at all, only to borrowers.
It doesn’t take much to get started, either.
While private real estate equity funds charge a minimum of $250,000, on some crowdfunding platforms, you can buy fractions of properties for as low as a $10. And you can open and fund an account online. You just need a smart phone, laptop, or PC.
One example is a platform called Groundfloor. It offers short-term, high-yield returns that are backed by residential real estate.
The company makes loans to cover the new construction, buying, renovating, renting, and refinancing of residential properties. (Although we recommend passing on refinanced loans due to their tendency to end up in delay or default.)
When you sign up, you can pick individual loans to invest in. And a year later, you’ll receive your principal back, plus interest (a fixed rate of return).
Thousands of Groundfloor investors have portfolios with dozens, and even hundreds, of real estate loans across 30 states. So if you want to invest in real estate like the wealthy – but at a fraction of the cost – consider using the Groundfloor platform to get started.
And if you want to diversify even more, there are fractional investing opportunities in other trophy assets like art, classic cars, watches, and fine wine.
But the overall point is simple, and it’s one that Daily editor Teeka Tiwari drives home all the time…
For every reason, it pays to have some part of your wealth in alternative assets right now. They can help you stay ahead of the massive money-printing happening around the world. They can move independently of other asset classes like stocks and bonds. They can provide levels of privacy and portability far beyond most traditional vehicles. And even a relatively small amount of money can end up producing outsized gains.
If you’re looking for new ways to grow and protect your nest egg, completely outside of the ups and downs of the stock market, you will love fractional investments.
Analyst, Palm Beach Daily
P.S. Investing in real estate (or other assets like watches and fine wine) can definitely kick off serious profits… especially in the current money-printing bacchanalia.
But if you’re looking for truly life-changing gains, then there’s only one trophy asset to consider right now – cryptocurrencies.
And just like they pour money into expensive real estate and other trophy assets, billionaires like Mark Cuban and Silicon Valley venture capital firm Andreessen Horowitz are buying up this crypto, too.
That’s why last night, Teeka held Crypto’s Next Trillion-Dollar Coin to share all the details. Over 60,000 readers signed up for this free event… and those who showed up received the name and ticker of this future trillion-dollar crypto just for attending.
Now, if you missed last night’s event, don’t worry. For a limited time, you can watch a replay of this event for free. Click here.