To own properties through Coral, you must be a U.S. resident (or foreign resident with a U.S. tax ID), over the age of 18, who qualifies as an accredited investor.
You generally qualify as an accredited investor if any of the following are true:
- Annual income greater than $200k (for the last 2 years)
- Joint household income greater than $300k (for the last 2 years)
- Net worth greater than $1M (excluding your primary residence)
For a complete definition of "accredited investor" and related criteria, click here.
It’s as simple as:
1. In the Coral app, go to Listings and find a Coral property that you like
2. Click on Invest and choose how much you want to invest
3. Our team will contact you to sign investment documents
Wire in your fundsOnce you’ve signed the documents, you will see your investment and their returns under Portfolio.
Each Coral property is structured as an individual LLC. When you choose to invest in a property, you acquire equity in the property and a pro rata share of its returns. Unlike a REIT or other real estate funds, you get to see exactly what you are investing in and also receive live updates on our Twitter feed.
To learn more about investing in rentals, see How do rental property investments work?. To learn more about investing in renovations, see Renovation Project Questions.
Owning rental real estate can be a smart approach to diversifying your investment portfolio and generating a steady income. With many investments (stocks, art, jewelry, bitcoin, etc.), you hope its value will increase so it can be sold for a profit later.
With rental homes, you have an additional source of profit from the positive cash flow generated by rental income. Because people will always need a place to live, rental properties are one of the most stable types of real estate investments.
- Economies of Scale: Multi-family housing generally has a lower "cost per door" than single-family, which ultimately increases profitability. The renovation, repair and maintenance cost per unit is lower for multi-family homes since these costs are distributed across the full property. Furthermore, management is typically more effective and profitable, and improvements can lift the value of all or multiple units (not just one).
- Control and Stability: The income and value of a multi-family property is more controllable than that of a single family property. It is valued on its net income, not comparable sales (as is the case with single family). As landlords, we have the freedom to adjust rents, increase operational efficiency and augment income with services such as laundry or internet. Conversely, the valuation of a single family house is largely based on supply and demand factors (as viewed through comparable sales), which tend to be much more volatile.
- Leverage: In what other investment (outside of real estate) can you borrow money from the bank, pay that loan back with money from someone else (the tenant), and keep the difference for yourself? Leverage can allow you to generate an outsized return without outsized risk.
- Inflation works with you, not against you: The majority of big expenses in multifamily ownership (mortgage, property taxes) stay fixed for the majority of the time you own the property. Meanwhile, as the value of money decreases due to inflation, the price of goods and services (including rents and home values) increase.Multifamily investment has traditionally been reserved for institutional investors or ultra high net worth individuals due to its larger capital requirements, financing realities, tenant screening and property management needs. Coral divided the traditional multifamily investment opportunities into smaller chunks, so that accredited investors can easily access institutional-level service.
To learn how all Coral investments work, see How do Coral investments work?
For rental properties, Coral typically obtains a bank mortgage on behalf of the LLC in order to provide leverage, typically targeting 65% of the property’s value.
Once your investment is signed and the property is acquired, you will receive monthly cash distributions from the LLC distributed to your bank account. Although you should consult your own legal and tax professionals for advice, our LLCs are generally structured and manage to achieve tax efficiency by utilizing depreciation and expense write-offs.
Coral handles operational responsibilities of the property, and keeps you in the loop every step of the way, including live updates on our Twitter feed. Coral helps owners "realize appreciation" when the property rises in value. When you want to sell your allocation, we help with that too.
Through Coral, you will have direct fractional ownership of a property. As a result, your returns consist of recurring rental income and potential capital appreciation of the properties themselves.
Income – As a fractional owner, you are entitled to your pro-rata portion of any operating income. In addition, every month, you will receive a cash distribution that is periodically adjusted to reflect the financial performance of your property.
Capital Appreciation – If and when Coral refinances or sells the property, you can expect to receive the return of your initial capital (the value of your initial investment paid back) as well as any pro-rata capital gains.
We aim to make the cost of co-ownership comparable to the cost of DIY. We charge three fees to acquire, operate, and sell the property (transparent pricing, no hidden fees).
1. Acquisition Fee (Upfront) – Equals 2% of the purchase price; each investor pays their pro rata share.Coral finds and analyzes the property, prepares a business plan, sets up the legal infrastructure, secures financing, finds your co-owners, and closes the deal.
2. Property Management Fee (Annual) – Equals 8% of annual gross rent; each investor pays their pro rata share.Coral finds and vets tenants, collects rent, manages maintenance and repairs, finds and manages vendors, sets rental rates, manages budget.
3. Sale Fee (Sale) – Equal to 3% the property sale price; each investor pays their pro rata share.Coral serves as your broker to find great buyers and sell the property (or your allocation of the property).
We do not charge any investment fees, which typically include an asset management fee (~ 0.5-2% of investment, paid annually) or "carry"/"carried interest" profit share (a percentage of profits paid to the sponsor, generally after meeting a certain return threshold). We do not charge a separate financing fee or leasing fee. We do not have any hidden or layered fees.
Why don't we charge other fees? We reduce our own costs through vertical integration, enabling us to reduce costs for our investors and keep our fees simple, straightforward, and aligned with our investors interests.
While owning real estate is often a great investment decision, renovation projects are also a major source of high-margin real estate income. Every year, millions of homes in the US are in dire need of improvements in order to continue serving the next generation of tenants and owners.
When executed well, renovations often yield high returns—experienced construction professionals are in short supply! For each property, Coral structures your renovation investment as preferred equity, yielding a high fixed yield which is distributed monthly back to you. Your initial principal is returned by the LLC at the end of each project, which typically takes 9-24 months. We developed this unique structure in order to give you predictable returns with a high yield.
We also co-invest alongside you: Coral and our construction professionals own a common equity stake in each project. Your preferred equity gets paid back first, so we make money when you do. We believe this is only fair, and gives us the right incentives to find and execute great projects for you.
Finally, you have full transparency on every project at twitter on our app. Come see our team at work, while you relax and reap the rewards!
Through Coral, you own a percentage of preferred equity in the project, which is structured as an LLC that owns that individual property. The preferred equity offers a high yield, typically between 8-15% per annum, and this rate is distributed to you monthly. Your principal is returned at the end of the renovation when the property is sold.
Like all investments, there is the possibility of loss of principal, which would happen if the LLC is unable to recoup initial investment upon sale. However, each project has a significant margin of safety built in:
- We have structured our renovation projects so that loss to preferred equity would occur only in rare scenarios, such as a severe drop in the market or failure to execute
- Coral and our construction professionals invest a significant amount of cash as common equity into each project, which is recouped only after your principal is returned. This gives us a strong incentive to ensure your investment’s profitability—we profit when you profit
- Our project plans including projected sale price and the inherent “margin of safety” built in for you