how does a radicle deal work?
When lenders work with real estate investors they want them to have “skin in the game” to ensure they care about the project. They’ll usually ask for a down payment ranging from 5% to 20%.
Let’s say you find an investment property that you know you can renovate to be valued at $100,000. If you purchase the property for $60,000 and it cost $20,000 to renovate, your total investment will be $80,000, and you will stand to profit $20,000.
If you have to put 20% down on your purchase, that’s a $16,000 down payment. That may seem like a lot, but here’s the magic of leverage: You will have invested $16,000 to a receive a return of $20,000 a few months later. That’s a 25% return on your money after all expenses!
If you had gone in on the property above with a Radicle group of investors and only put up $1,000, a 25% increase would be an additional $250 in your pocket in a matter of months!
Why group investing?
Leverage gives you the ability to use a small amount of money to control larger sums. With group investing you can pool your resources with others to participate in investment opportunities you would otherwise be priced out of.
Investing with others spreads the risk around, allowing you to test the waters with small amounts of money while still being exposed to the same return on investment as those investing much more.
Real estate is a crucial and often over-looked component to achieving your financial goals. Group investing allows you to add physical real estate to your investment portfolio at a contribution level that’s comfortable for you.
WHAT IS A REAL ESTATE INVESTOR PARTNER?
There are two types of partners, Equity and Debt.
Equity partners will receive 15% of the profits after the home is renovated and sold.
Debt partners will receive 12% on the amount of money they lend over a pre-determined amount of time.
By comparison, the stock market on average produces 9% in returns per year. Partnering generates larger returns more quickly and with less risk.
IS MY INVESTMENT SAFE?
Disclaimer: No investment is risk free. Although highly unlikely, there is the chance of losing all your capital. Keep reading to see how we safeguard your investment.
Our partnership agreement ensures what you contribute is yours and no one else’s. This binding agreement specifies your ownership percentage for a particular project. You’re legally entitled to profits in proportion to what you contribute.
Your contribution is considered an asset-based loan. That means your investment is secured against the property via a 2nd mortgage. Any proceeds remaining after the lender receives their portion is divided amongst the partners associated with that particular deal based on their percentage of ownership in the deal. If things turn south, the lender has first rights to the property.
Analyze, evaluate, calculate, repeat, then buy. We analyze risk, market conditions and potential profits, so you don't have to. We never enter a deal where we don’t see a minimum of a 25% net profit. We look at everything from crime rates to how far a property is from railroad tracks and major roads when determining if a property is worth purchasing. The sheer amount of due-diligence that goes into analyzing a property increases the chances of success.
HOW DO I START?
Receive new investment opportunities in your inbox as they arise.
Create a partnership account associated with the project, fund the account, and sign paperwork.
Follow property renovation every step of the way on our current projects page.
Profit! After the property is flipped, and the deal is closed, profits are distributed to all debt and equity partners.