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Real estate is a favorite asset for many seasoned investors because of the significant income it can generate, the potential for investment appreciation, and the tax incentives that come along with it. But there are some sizable barriers to entry in real estate investing. It’s often too expensive to take on as an individual investor, plus finding a property you want to invest in and brokering the deal takes a lot of time and effort—and that’s not to mention the work of owning and maintaining properties.
Thankfully, a number of fintech platforms have come onto the scene to make real estate investment significantly easier and more manageable for individual investors. One such example is Cadre. How does this platform work, and is it the one for you? Read on for a full Cadre review that will cover everything you need to know before you jump in.
What is Cadre?
Founded in 2014 by Ryan Williams, Jared Kushner, and Joshua Kushner, Cadre is a crowdfunding platform that was designed to identify markets with the potential for outsized growth, then allow investors to pool resources to fund a property’s purchase. Using artificial intelligence, this platform finds these investment opportunities by analyzing upwards of 40,000 variables and over 3 million data points. Using Cadre, accredited investors have the chance to expand their investment portfolios with office buildings, hotels, multi-family properties, and individual real estate in markets including Los Angeles, Denver, Seattle, Atlanta, and Washington, D.C.
With advisors on staff vetting properties to ensure they meet the company’s standards, investors can rest easy knowing they’re seeing high-quality investment opportunities as they peruse Cadre’s listings. When you sign up to invest with this platform, you complete an initial questionnaire. Based on your answers, Cadre provides tailored recommendations for properties that best suit your investment needs and goals.
By choosing to invest in real estate with Cadre, you reap the benefits of their experienced team’s institutional expertise. If you haven’t invested in equities before, accessing that knowledge independently would cost you considerably.
How does Cadre work?
So, how does a crowdfunded real estate investment platform like this one actually work? Let’s do a complete review of Cadre’s onboarding process so you understand what it looks like to sign up and begin investing as a new member.
First, you’ll need to sign up with the platform. You’ll complete the questionnaire, including things about your investment history, confirmation that you have accreditation status, risk-return profile, and ideal investment timeline. This will help them tailor your investment plan to your situation and goals.
Once your account is approved, you’ll be able to access resources like investment strategies—you can even interact with an investor relations representative who can provide advice or assistance, should you need it. Then you can start investing with deal-by-deal offerings, Cadre Funds, or their secondary market.
As this is a crowdfunding investment platform, investors have the opportunity to pool resources with others in order to profit off the property they’re interested in, without having to foot the whole bill upfront. Investors share the returns—historically, an annual rate of 18.6% for users of this platform—while Cadre covers the logistics of property management.
Review of Cadre’s features
No Cadre review would be complete without an overview of the platform’s most popular features. Based on user reviews, here are some of Cadre’s key pros:
- Expert vetting: Cadre has a stringent vetting process for investments being considered for inclusion on their platform. Investors should feel confident that every investment on the site has been closely evaluated and deemed potentially lucrative by Cadre reviewers.
- Multiple investment options: While the most popular investment option, the Cadre Direct Access Fund, is no longer available, there are two new Cadre funds set to release soon, as well as the deal-by-deal and secondary market investment options. Having options is always positive on an app like this.
- Returns: Investing always comes with risks, but the returns of investment made through Cadre are pretty good. Since 2014, the platform has closed on more than $3.3 million in deals, distributed $168 million back into the pockets of investors, and generated a historic 18.6% rate of return.
Drawbacks to consider
To provide a complete picture of the platform, our Cadre review must of course include the platform’s cons, as well. Here are some important drawbacks to consider in your evaluation of Cadre:
- Accredited investors only: Cadre is only open to accredited investors, meaning that anyone who wants to invest through the platform must have a net worth exceeding $1 million and proof of income exceeding $200,000 ($300,000 if income is shared with a spouse).
- Investment liquidity: Cadre offers a secondary market, which means you would be theoretically able to sell your investment should you need to for any reason. But while Cadre does offer a window of liquidity on investments, the net asset value is not guaranteed—nor is there a guarantee that another investor will buy your investment. This means you may get far less than expected, or be unable to sell the investment altogether.
- High minimum investments: Most investments come with a steep minimum investment of $50,000. While no one goes into real estate expecting low minimums, numbers that high could be a barrier to entry for some investors.
Reasons to try Cadre
If you’re an accredited investor who meets the rather stringent requirements of Cadre, you’re able to invest—investors are vetted as thoroughly as investments. Since the platform has rather high minimum investments, you’ll need to be relatively well off, hopefully with a nest egg tucked away, and in a position to invest large sums in a somewhat risky industry. The payoff in real estate can be great, but the market isn’t always predictable.
Bottom line
If you’re looking to invest in real estate, Cadre is a good option—it has one of the highest historical returns in its industry, but it’s also a relatively new company in an industry full of seasoned competitors. If you’re more of a novice investor, Fundrise might be a better option to consider investing with. If you’re a well-established, accredited investor, but you’re not sold on Cadre, take a look at CrowdStreet.
No matter which platform you decide to go with, remember that conducting careful research and ensuring you understand the fine print of a platform before you invest is essential. Visit Cadre online to learn more. Good luck, and happy investing.