Compound: Reach is an App-based real estate investment platform. The company is “re-imagining” the way people invest in real estate by enabling everybody to “participate in the growth and prosperity of the cities and neighborhoods they are helping to build.”
The company currently lists several properties available for investment including the hot markets of Miami, New York, and Austin. Several other communities, like Nashville and San Francisco, appear to be in the queue at some point in the future.
Currently, one of the offerings is listed on Republic, a crowdfunding platform that has focused more on early-stage firms. This appears to be the first pure-play real estate investment for Republic. Real estate has been identified as an area of expansion for the crowdfunding platform.
Compound: Reach is raising capital for a single Miami condominium; a one-bedroom. 1.5 bathroom flat located in a building in the city center. The company plans to rent the condo to generate near term income but any significant gain will be generated by selling the real estate at a significant premium to the original purchase price. This means investors are betting that the condo will dramatically appreciate in value over time.
Compound has “sliced” the property into 100,000 individual shares.
According to the offering page, investors are purchasing a “Crowd IPA” or a “simple agreement to acquire membership units of a limited liability company.” As it stands today, $86,873 has been raised from 491 investors or an average of less than $200.
Regardless of the merits of the investment, Compound aims this offering to be the “first of many offerings [they] do with Republic.”
Reg CF, the exemption being utilized for this investment, is not widely utilized in the real estate sector. It will be interesting to see what other types of real estate investments are listed with Republic. Perhaps, we will see some debt-based offerings in the not so distant future.
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