CREW DC Luncheon: Investing in Real Estate – Bridging the Gap

The W Hotel, 515 15th Street NW, Washington, DC
Wed September 13, 2017 11:30am – 1:30pm
Traditionally an arena ceded to men, real estate investing has the potential to provide a path for women to achieve professional and financial independence. While the gender investing gap is real - it doesn’t have to persist into the future.

Speakers:

  • Jill Homan, Principal, Javelin 19 Investments
  • Latasha Edwards, Senior Vice President, RSE Capital Partners (an affiliate of Fundrise)
  • Scott Homa, Senior Vice President & Director of U.S. Office Research JLL
  • Betsy Karmin, Partner, Morris, Manning & Martin, LLP

Summary:

Betsy Karmin let us know the typical criteria needed to be an accredited investor and that criteria is as follows; Net Worth over $1 million, a salary worth $200,000.00 annually or a combined income of $300,000.00 annually. Also, we learned that “waterfall” in terms of real estate investing means “what’s left after everyone gets a return on their investment and return of investment”. Additionally, to, “invest in deals” means you own a portion of the asset and to “Promote” means a disproportionate share of profits above a certain return. Jill Homan led us through the types of deals (risk-return) and the summary can be seen below:

Types of deals (risk-return):
Core - 6-9% IRR
Cure-plus is 10-14
Value add 15-20
Opportunistic (development) 20%+ IRR

Alternatively, Latasha Edwards taught us that if the above mentioned criteria aren’t met and one does not fall into the “accredited investor” category another vehicle for investing in real estate is “Fund Rise” where a minimum investment is $500 and unaccredited investors are able to invest. In addition to allowing uncredited investors to invest, the fees are fairly low and products such as an Income eREIT or Growth eREIT (JV Partnership) and The New eFunds (For Sale markets in key locations) are some of the various options available to investors. Scott Homa spoke to us about demand, supply and fundamental market. Currently there is a tremendous amount of construction occurring across all property types. Investment sales buyer composition is changing and we are seeing a lot of foreign investors, additionally, tech will continue to outpace traditional offices. Scott also mentioned that vacancy rates are headed up and that a modest softening of most US markets is anticipated. Consumer confidence is at a 16 year high and employment growth is up. The industrial market has been growing consistently and is impacted by e-commerce. We are currently in the 8th year of an economic cycle that typically lasts 7 years and there aren’t any current signs of things changing.