The world of crowdfunded real estate is getting, well, crowded, and addy isn’t the only player on the block. Here’s a look at Toronto-based property investment newcomer Willow and how they stack up against addy.
How it works
Property for the People vs. Real Estate for Everyone
Willow uses a mechanism they call PropSharing to allow entry into the real estate market. Willow says that they divide up investments into single units that can be purchased by investors. Willow divides properties into 100,000 units, with investors allowed a maximum 10% investment into a single property.
addy’s number of available units varies depending on the property; with each unit costing $1. The most a member can invest is $1,500 in a property. This is to ensure diversification and also to allow equal opportunity for all members to invest. After all, we’re all about real estate for everyone.
Buy & Sell Real Estate Online
Willow says they will allow investors to buy shares of property and then sell if and when they desire via their marketplace. Willow investors may feel compelled to regularly check in on their investment, watching as a share moves and wondering when and if to sell or buy more, similar to buying and selling stocks. But how does one buy real estate today and sell tomorrow for a profit? Given real estate is a get rich slow game…we’re not sure.
On the other hand, once addy members invest in a property, the hard work is over. You don’t need to do anything further. addy provides regular updates on properties over time so members can kick back and wait for the estimated return as outlined in the Offering Memorandum.
Crowdfunding Real Estate
Willow makes a point that they are not crowdfunding real estate, but addy takes pride in this process. We love the idea that a community can pool their money and own a piece of a property together. With addy, members can purchase a unit of a property for as little as $1, which allows those who would otherwise be shut out of the red-hot real estate market to take part. addy aims to eliminate ownership barriers, such as high down payments, with crowdfunded real estate.
addy does not provide financial or investment advice. Instead, addy encourages members to seek out professionals in order to set and obtain any financial goals. Willow offers some guidance based on investor profiles.
Who can join?
A key difference between addy and Willow is the membership process. addy believes in real estate for everyone, regardless of their personal background or financial history. Signup is quick and easy, requiring members to provide government I.D. to prove they are of age in their province. While there is a nominal cost to membership, investments can be made for as little as $1.
Willow, however, wants a bit more information about your background. Willow asks about your current and past work experience, your investment experience and your financial goals for the short and long term. Knowing your net worth, risk appetite and investment knowledge helps them “determine the threshold of purchases investors are authorized to make on Willow.”
addy makes the process simple and easy, requiring no previous experience in finance or a specific net worth threshold. Those interested in addy can become members in a matter of minutes; once their wallet is funded, members can use the Instant Funds tool to start investing right away. Willow can take up to a few business days to make a determination.
Cost of entry
addy offers three membership options. A Charter membership costs $25 for one year, while a Believer membership costs $500 for five years. addy has a third option available for accredited investors.
There is a significant difference between addy and Willow when it comes to fees. With addy, once you’re a member there are no other fees. This means that every penny of your investment goes towards the property. Willow, however, subtracts fees. Willow says they will instill $4.99 transaction fees, a 0.75% management fee and a 2.5% property acquisition fees.
addy focuses on institutional grade commercial real estate (aka. real estate opportunities reserved for the uber-wealthy – the average Canadian generally has no access these investments exist), which can include apartment complexes, mixed-use buildings and even RV Resorts. Willow, meanwhile, seeks out properties including retail, residential and industrial properties.
Willow, like addy, currently only operates in Canada.
addy believes in real estate for everyone with a process that is transparent and accessible. Sign up today to start investing with your community.
|Over the age of the majority in the province of residence||Conditional on financial and employment history|
|$25/year membership||$4.99 transaction fees, 0.75% management fee, 2.5% one-time property acquisition fee|
|Institutional-grade commercial real estate||Residential, office, retail, and industrial properties.|
|$1||Varies depending on the investment|