Hotel Innvestor is crowdfunding for commercial real estate – specifically Hotel projects. We have created a marketplace for accredited investors to pool money online and buy shares of comprehensively underwritten hospitality real estate investments. Hotel Innvestor allows accredited investors to invest in real estate opportunities online through a private, SEC-compliant website. Once you become an Innvestor, you can browse investments, review legal documents, due diligence and sign legal documents on an SEC-compliant platform.
Hotel Innvestor’s primary focus is select service, extended stay and premium limited service franchised hotels in the top 25 MSA (Metropolitan Statistical Area). In general, we will look to raise equity capital for hotels with a minimum $75 RevPar (revenue per available room) and focus on debt for properties with at least a minimum $50 RevPar.
Real estate companies request permission or are directly solicited to partner with our Hotel Innvestor investment banking platform. For equity investments, Hotel Innvestor uses existing hotel industry relationships, market and brand-specific knowledge, and methodically sound underwriting utilizing our proprietary model to provide accredited investors with opportunities to invest with the brightest minds in some the highest quality hotel projects nationwide. Hotel Innvestor, along with our broker-dealer partner WealthForge, reviews all their materials to determine if the company and/or the investment is a good fit for our Innvestors.
Joining Hotel Innvestor and browsing the marketplace is free. Should you choose to invest, there is a fee associated with each investment. The fees depend on the type of investment (loan purchase or equity purchase) and the nature of the transaction. In addition to administrative and legal expenses, the fees will cover the ongoing reporting and communications for the investments.
Hotel Innvestor will work with the real estate company to ensure timely updates are shared with all investors at least quarterly. Updates will be provided via email and via your investor dashboard.
In addition, you will receive tax documents (K-1) every year that you have a distribution from a real estate investment on Hotel Innvestor.
The real estate investments you find on Hotel Innvestor are private transactions in physical properties around the United States. The investments are not traded on public stock exchanges and cannot be easily sold or traded.
Different properties have different expected “hold periods.” A hold period is the anticipated time investors will be involved with the investment until it is re-sold or the loan is paid off, and range from less than 6 months to greater than 5 years. It is important to read the investor documents for a deeper understanding of the hold period for each investment.
As an investor, you will receive a return on your investment when the company distributes money. Money is typically distributed on two occasions: 1) investors receive their share of the profits (as an equity investor) or their agreed upon interest (as a loan investor) and/or 2) when the property is sold.
Yes. Similar to investing in the stock market, there is no guarantee when you are investing in real estate. The real estate market has economic cycles and it is difficult to know how and when the economy will change.
To ensure that there is adequate liquidity by the investors of illiquid, private securities, the SEC was tasked with defining who is eligible to invest in these securities. The end result is the SEC definition of an “Accredited Investor.”
Federal securities law requires that securities issued by private companies to their investors must be registered with the Securities and Exchange Commission (SEC) unless the offering qualifies for an exemption from registration.
One exemption from registration is available if the company offers securities only to accredited investors in a private offering. Accredited Investors are defined by the SEC as having $200,000 of annual income per individual ($300,000 per couple) for two consecutive years with the expectation of that continuing, or a net worth of at least $1 million, excluding the value of the primary residence.
Investors in a project will become a member of a Delaware limited liability company (the “LLC”). Generally, an LLC is taxed as a partnership for income tax purposes and therefore, each investor will be issued a K-1 with respect to his participation in the LLC.
When investing in a fund or a REIT, you have no discretion over how your money is allocated over a portfolio of real estate. Furthermore, the fees charged to investors are typically onerous on the investor. Investing through Hotel Innvestor allows you to choose from pre-vetted hotel opportunities to create your own custom portfolio. The investor chooses exactly the property in which he wants to invest.