A Letter From the CEO, Harold Hofer
Our CEO's remarks on Elevate Money's progress to date.
Our CEO's remarks on Elevate Money's progress to date.
Thank you for checking out Elevate Money.
A demographic line in the sand has been drawn.
Above this line, say for folks north of age 50, you likely invest your money with the guidance and advice of a “human” financial advisor.
Below this line, if you are south of 50, you likely access financial products through a digital interface. These financial products include trading apps like Robinhood and investing apps like Acorns. The access is easy, it’s quick, and the online tools are numerous to help you make informed investment decisions.
One thing is clear: This demographic line is moving upwards each year. And the number of people above the line, and their investable dollars, are declining each year. Conversely, the number of people and investable dollars below the line are growing each year.
It’s with this demographic certainty in mind that we created Elevate Money.
Many investors include an allocation to real estate in their investment portfolios. Real estate is a $16 trillion asset class in the U.S. and most businesses elect to rent, rather than own, the properties they occupy. Trillions of dollars of real estate are thus owned by somebody else besides the businesses actually operating in the properties. Historically, the “somebody else’s” were large institutions or wealthy individual investors.
Thanks to the internet and new SEC laws, “somebody else” can now be you.
We fractionalize real estate into $100 bite-sized increments and make it easy for users to complete the investment process. We focus on small commercial buildings leased to well-known businesses. These businesses are required to pay rent every month, and we in turn strive to pay our shareholders cash dividends every month. It’s a simple formula that millionaires have been taking advantage of for many, many years. Now it’s our turn.
We recently concluded a public beta test of our Elevate.Money platform. We have sold over $1.2 million in REIT shares to hundreds of investors. Many investors have taken advantage of our built-in investment compounding features including dividend reinvestment (over 70% investor participation) and monthly auto-invest (over 25% participation).
We elected to go the extra mile and create an investment platform that requires us to file audited financial information with the SEC. This adds an additional layer of protection for our REIT investors. Elevate.Money REIT I’s annual report including audited financial statements can be accessed here.
You may have noticed that we recently released version 2.0 of our website, which includes significant improvements in the speed and efficiency of the client onboarding process. Several educational features were added such as our dividend calculator which helps investors visualize possible financial outcomes over various time horizons and our new blog page. If you haven't had a chance to read “My Mom’s 100x Return on Real Estate”, I encourage you to do so. Even though this was my personal story, I was shocked by the findings.
We also are in the testing phase of our iOS app which will publicly launch in the coming weeks. Our Android app will follow soon after.
Real estate investing provides two components of investment return: Current cash flow (dividends) and capital appreciation. In our view, current cash flow is more predictable, tangible and immediate. We therefore focus on properties that provide strong current cash flow, in addition to longer-term capital appreciation.
Case in point is our Family Dollar property in Fort Worth, TX. Family Dollar is a public company and has an “Investment Grade” credit rating. With this credit rating, it is statistically unlikely that Family Dollar will fail to pay rent every month. Our business model is to collect the monthly rent, pay expenses including mortgage payments, and then distribute the remaining cash flow to our shareholders.
Chief Investment Officer David Perduk leads our real estate team.
We think it’s a good idea to buy properties using both cash (from the sale of our REIT shares) and a mortgage. Mortgage financing allows us to spread our cash out over more properties, helping us achieve investment diversification. However, we also think it’s a good idea to err on the side of being conservative when we consider the ratio of cash and mortgage. In this regard, we like to put at least 40% cash down when we buy properties.
Case in point again, our Fort Worth Family Dollar property has a mortgage that equals 60% of our purchase price. The interest rate on the mortgage is fixed at a very attractive 3.95%. The monthly Family Dollar rent check that we receive very comfortably covers our mortgage payment.
We have consistently paid out monthly dividends with an annualized yield of 6.5%.
With so much happening in such a short time, it’s no wonder the press has started to notice. Quite the buzz was created when word got out that NFL superstar Todd Gurley joined the Elevate team as an investor and brand advisor. I’ll leave you with a quote from Todd that truly exemplifies our mission…
"I'm partnering with Elevate.Money because of their commitment to financial literacy and my confidence in the team they have built around the company," said Gurley. "When I heard the vision from Harold (Hofer) and Sachin (Jhangiani), it resonated with me at a point in my life when I did not know where, what or how to start investing in my future self. I've been in many young investors' shoes today. I'm excited to use my platform for the better of the world and show that you don't have to have a tremendous amount of money to invest in real estate thanks to a solid platform like Elevate."
Thank you for your continued support, it’s much appreciated.
Co-Founder and CEO
P.S. I look forward to sharing more good news with you next quarter and until then if you have any questions please reach out to our investor relations team, or setup a call with them.
How the Ultra Wealthy Invest - CNBC
5 Ways Millennials Can Creatively Budget To Fight Inflation - Go Banking Rates
The Best Retirement Investment Strategy Generation Z Can Learn From Boomers - Market Watch