So, you’re considering dipping your toes into real estate investing, right?
Well, there are plenty of options to choose from. Some folks buy a rental property as their entry point, while others prefer REITs or crowdfunding platforms.
But remember, strategies like owning a rental property need a hefty initial investment. And being a landlord? That’s far from passive since you’ve got tenants to manage.
This is where a platform like Ark7 could come into the picture. It’s a fresh fractional real estate company that’s shaking things up.
Accredited investors can buy shares in income-producing rental properties, and it’s completely hands-off. But is it the best choice compared to other crowdfunding alternatives?
Well, that’s why we’ve taken the time to put together this comprehensive Ark7 review so you can decide whether it’s worth your time and money.
What is Ark7?
Ark7 is a fractional real estate investing platform based in San Francisco-based. It was founded by Yizhen Zhao, a former Google engineer, along with Jim Holt, Yujian Weng, and Ling Yang.
They offer fractional shares, like owning a piece of property. With Ark7, you get access to rental real estate, and the company claims that it has over 20,000 investors who have invested in properties worth over $15 million.
One thing that makes Ark7 unique is that its rental properties are located in different cities and real estate markets across the country. Each property is owned by an LLC company that Ark7 creates.
So, as an investor, you can buy shares of each LLC while Ark7 manages and administers each property.
How Does Ark7 Work?
Curious about how Ark7 works? Let’s break it down for you.
Ark7 purchases rental properties either through cash deals or financing. Then, they list these properties on their platform, offering them a set number of shares.
And here’s the thing: Ark7 typically holds a small percentage of the shares (1-10%).
Like other fractional real estate investment platforms, Ark7 provides investors monthly dividends and the possibility of share appreciation.
So not only do you get a steady stream of income, but there’s also a chance for your shares to increase in value over time.
Ark7 has homes in about a dozen markets, including Texas, California, Washington, Arizona, and Georgia.
Features of Ark7
Let’s discuss the features that make Ark7 stand out from other fractional real estate investment platforms.
1. IRA option
Did you know that Ark7 offers an IRA option? Not all platforms offer this, meaning you can hold your shares in an IRA (Roth or traditional) without being taxed on rental income. However, there is a custodial fee unless your balance is over $100k.
2. Diverse properties
Another great thing about Ark7 is that they offer a diverse portfolio of properties. This includes different markets, multi-family properties, short-term rentals, and more. So you have plenty of options when investing in real estate.
3. Income and appreciation
Investing through Ark7 can also provide passive income (dividends from rental income) and the potential for share appreciation. So not only do you get a steady stream of income, but your shares could also increase in value over time.
4. Ark7 secondary market
The Ark7 secondary market is a pretty nifty feature. It allows you to sell your shares, making them potentially more liquid than some other fractional real estate investment platforms.
However, remember that the secondary market may not always be active, so finding a buyer could be tricky.
When it comes to investing, fees are a big deal. They can eat into your returns, so you need to know which ones are necessary and which might be too steep.
Now, Ark7’s fees are on the higher end, and there are three main ones you should be aware of.
Property Management Fee: This fee varies based on the property but is generally between 8% and 15% of the monthly rental income. Not too shabby, considering they’re handling all the management stuff for you.
IRA Custodial Fee: If you keep your Ark7 properties in an IRA, there’s a $100 custodial fee per property each year, capped at $400. But if your IRA has over $100,000, they’ll waive the fee.
Sourcing Fee: This one-time fee is 3% of the property’s market value. Just remember, you only pay it once.
So, while these fees might seem a bit high, it’s essential to weigh the convenience and passive nature of the investment against the costs. Just make sure to factor these fees in when considering Ark7 as an investment option.
Pros of Ark7
- A user-friendly website makes it easy to navigate and use
- Multiple payment methods available for convenience
- Offers a wide selection of products to choose from
- Free 30-minute call for investors putting in $10,000 or more
Cons of Ark7
- There’s no going back once you make a purchase
- Fees for storage can be expensive
Is Ark7 Worth it?
Fractional real estate investment platforms like Ark7 have changed the game.
Investing in real estate has never been hassle-free. You won’t have to deal with the hassle of finding a property, tenants, and managing everything.
But the burning question is: Is Ark7 the right choice for you? Well, that depends on your specific needs and what you’re after. Remember, there are some strong competitors like Fundrise to consider too.
One thing’s for sure, though – Ark7 has a solid 4.4/5 rating on Trustpilot, so it’s a reputable and reliable platform to invest with.
Click here to sign up for Ark7, and it might be the missing piece in your real estate strategy.