Arrived is building a new way to invest in real estate that makes it easier for people to start their investing journey today. With Arrived anyone can buy shares in income producing rental properties starting at just $100. Arrived will take care of all the operational work (finding a renter, dealing with maintenance, etc) so that investors can sit back and collect net rental income and their share of the homes appreciation.
They’ve built their operating strategy around the targeted acquisition and efficient management of properties. First they select the markets and properties across the nation that can offer the highest potential long term returns in terms of both cash on cash returns and long term home appreciation. Second they have built a streamlined operating plan that allows them to minimize costs through economies of scale and efficient processes. Together these two areas of focus allow Arrived to maximize profits per home for their investors.
How you make money
You will start earning income from future rental payments and you can track your total investment balance on the summary page. Arrived will take care of all the operational logistics of managing the homes: including working with tenants, managing any maintenance needs, and keeping track of accounting, insurance, and annual tax returns.
Each property has a unique anticipated hold period, but they typically estimate a timeline of 5-7 years. During the hold period, their intent is to distribute any Free Cash Flow in the form of dividend payments. The determination of when to sell a property is made based on a series of relevant factors which may include: the prevailing and projected economic conditions, whether the property is anticipated to appreciate or decline substantially, and how any existing lease may impact the sales price we may receive.
How Arrived Homes makes money
Arrived makes money in two ways:
1. They buy each home upfront, make home improvements, rent the home on a long-term lease, and then sell the home in the form of shares through their website. Arrived makes money on transaction fees each time a home goes through this process. They can make a commission when they first buy the home (paid by the original seller) and can make money by creating additional home value through their home improvements and placing a long-term renter before they list the home on their website.
2. They also make some management fees for managing the portfolio of homes over time: A 1% management fee on the money people invest and then 8% of rent for property management.
Is it safe?
Arrived has a cash reserve at the individual property level for every home. It will typically average around 2% of the total home value. They also budget for ongoing operating expenses, both planned and unplanned. In the event that expenses or negative cash flow ever exceeded their cash reserve and operating expense budget, they would make a short-term loan from from their corporate entity to the individual home and then repay the loan with future rental payments.
Each home is owned through a limited liability company structure to protect shareholders from personal liability. All Securities related activity is conducted through Dalmore Group LLC, a registered broker-dealer and member of FINRA/SIPC.