There are countless ways to invest earned money to set yourself up for some passive income, whether you’re looking for some funds in the short term or arranging long term cash flow. Many opportunities to make money, however, require already having a substantial amount of money. To paraphrase an old age: you need to have money to make money. What’s more though, investing requires accurately assessing your risk appetite and often learning about complex and arcane topics.
addy believes in accessible and simple real estate investment for everyone, but Canadians also have the option of investing with LendingLoop. Let’s see how they differ?
How LendingLoop works
LendingLoop aims to allow average Canadians to loan funds to companies. There are groups in need of some financing, and LendingLoop, as a P2P or peer-to-peer lender, connects them to individuals who may want to diversify their portfolio and hopefully earn some money in the future.
LendingLoop does all the heavy lifting in terms of approving business, servicing loans and getting money from and hopefully back to your account.
With LendingLoop, Canadians can invest alongside small- to medium-sized Canadian businesses, a sector that has traditionally been inaccessible to most investors. The appeal is that not only does this allow for increased diversification in one’s portfolio, it can also help to support these businesses to get off the ground or make their way through growing pains or expansion.
However, there is no guarantee that any investors will make money. Because the investment is a loan, there’s a chance it is never repaid. If a loan is defaulted, lenders should expect to wait a substantial time for a chance to get some of their loan back. The loan cannot be sold on a secondary market. Depending on the investment, it could take anywhere from 3 months to five years to be paid back.
If a company does not attract enough investors to fully fund their goal, LendingLoop may decide to cancel the investment, at which point money would be returned to the investor.
Who can invest?
Any Canadian citizen or permanent resident over the age of majority residing in Canada, save for Quebec, can enrol to be a lender. There are three different tiers of lending. The highest tier is an Accredited Investor with assets over $1 million; an Eligible Investor has assets over $400,000; a Non-eligible Investor is one who doesn’t meet either of those thresholds.
A minimum of $200 is required to fund your account when you first open it, and from there you can invest in $25 increments.
How addy works
There are some similarities between addy and LendingLoop, in theory. addy seeks to make accessible investments that historically could not be accessed by average Canadian. What’s more, these investments allow for diversification of one’s portfolio.
Investments are done through crowdfunding in order to take part in ownership of property that would be far too expensive to invest in on one’s own. Crowdfunding spreads out the investment amount as well as the risk so more people can become involved. Unlike LendingLoop, however, there is no risk for a property not being fully funded. Every dollar you invest towards a property goes to that property.
addy acts as a Limited Partner, working with General Partner to invest in what’s called institutional grade commercial real estate. These are typically properties that are only accessible to the ultra-rich, with price tags ranging anywhere from $3 million up to $75 million. Each opportunity comes with a detailed plan for the property as well as timetable for potential return on investment. addy also invests alongside members and conducts thorough research before deciding on new properties. addy believes in a win-win deal for all those involved.
Some examples of opportunities include an apartment complex in Toronto, a purpose-built rental in Mission, and a smart hotel in Montreal with its very own addy Suite.
Who can invest?
Those of age in British Columbia, Ontario, Alberta and recently unlocked Quebec can invest with addy! In order to start investing, you need to sign up and become a member; you can fund your wallet and get started right away.
addy believes in real estate for all, which is why we’ve set our minimum investment to $1 and our maximum to $1,500. The minimum allows more people to invest while the maximum prevents a property from being snatched up by a few well-funded opportunities investors.