Warren Buffett doesn't invest in residential real estate.
But loves investing in commercial real estate!
The shocking part? Such amazing high return and safe commercial real estate options were only limited to the US.
Here's how an Indian startup is changing this:
But loves investing in commercial real estate!
The shocking part? Such amazing high return and safe commercial real estate options were only limited to the US.
Here's how an Indian startup is changing this:
Commercial real estate (CRE) refers to properties that are primarily used for business purposes rather than residential purposes.
It encompasses a wide range of property types, including office buildings, retail stores, industrial units, data centers, warehouses, etc.
It encompasses a wide range of property types, including office buildings, retail stores, industrial units, data centers, warehouses, etc.
People purchase CREs as an investment since it’s a great investment option.
But it has problems and the major one is — the barrier to entry.
These are high-yield, low-risk properties which are not that easy for normal people to invest in.
But it has problems and the major one is — the barrier to entry.
These are high-yield, low-risk properties which are not that easy for normal people to invest in.
Why so?
Suppose there’s a prime property worth 8 crores that you know will grow to be a fruitful investment for sure,
but your only option till now was to buy the whole property.
Suppose there’s a prime property worth 8 crores that you know will grow to be a fruitful investment for sure,
but your only option till now was to buy the whole property.
And since you don’t have 8 crores, or even if you do it won’t make sense for you to give commercial real estate so much allocation in your portfolio, you’re left with no option.
What if we tell you there’s a new option to invest in commercial properties fractionally?
What if we tell you there’s a new option to invest in commercial properties fractionally?
Strata — an Indian PropTech startup — is enabling people to do just that.
As in, you can buy a part of it instead of the whole property. For as low as ₹25 lakhs!
For women, they have reduced the entry level to ₹15 lakhs so that more women can participate.
As in, you can buy a part of it instead of the whole property. For as low as ₹25 lakhs!
For women, they have reduced the entry level to ₹15 lakhs so that more women can participate.
Getting all the appreciation in the price of the property, while investing whatever suits your pocket and portfolio allocation.
If you see, the reason why any form of investments becomes mainstream is:
👉 Simply because they are fractional.
If you see, the reason why any form of investments becomes mainstream is:
👉 Simply because they are fractional.
👉 There is no high capital requirement.
👉 Liquidable: You can sell them easily to get a return.
👉 Dividends are paid into your account. You don’t need to go knocking on someone’s door.
👉And most importantly, they are easily accessible.
👉 Liquidable: You can sell them easily to get a return.
👉 Dividends are paid into your account. You don’t need to go knocking on someone’s door.
👉And most importantly, they are easily accessible.
That’s exactly what Strata is trying to do with commercial real estate.
Another great thing about CRE investing through Strata is that you don't even need to visit the location to check whether it is a good investment or not.
Another great thing about CRE investing through Strata is that you don't even need to visit the location to check whether it is a good investment or not.
It is not uncommon for local brokers to sell you properties that are ridden by hidden legal issues for a good discount.
There’s a lack of transparency and you only get to know about them once you've bought the property and become stuck with it for years.
There’s a lack of transparency and you only get to know about them once you've bought the property and become stuck with it for years.
Strata simply cuts the middleman and makes it all digital.
You don’t need to be there locally to manage your properties, you can literally be anywhere in the world and have control over your real estate.
You don’t need to be there locally to manage your properties, you can literally be anywhere in the world and have control over your real estate.
But Strata has a due diligence team who verify the property to check for any kind of legal problems.
Only 1 out of 100 properties only gets listed on the platform.
Now, you must be wondering — why choose to invest in commercial over residential properties?
Only 1 out of 100 properties only gets listed on the platform.
Now, you must be wondering — why choose to invest in commercial over residential properties?
Simply because CRE gives 3x more returns!
Then there’s rent collection. One of the biggest hassles of owning any kind of real estate is the collection of rent from the tenant.
In Strata, not only is the property commercial so it has its advantages like higher rent yield,
Then there’s rent collection. One of the biggest hassles of owning any kind of real estate is the collection of rent from the tenant.
In Strata, not only is the property commercial so it has its advantages like higher rent yield,
but they also keep a financial check of the tenants — a tab on their cash flow so that they are capable of paying regular rent.
Moreover, in CRE, the tenants are usually very professional companies who don't default.
Moreover, in CRE, the tenants are usually very professional companies who don't default.
Commercial real estate brings with it a steady income flow through rents
+ you don't have to look for tenants yourself since Strata handles everything.
+ you don't have to look for tenants yourself since Strata handles everything.
Moreover, Strata's property rates are ingrained in ground reality and have no room for collective perception, unlike the stock market.
Now, what if you want to exit your investment?
You can exit your investment once the initial 1 year lock-in period is complete.
Now, what if you want to exit your investment?
You can exit your investment once the initial 1 year lock-in period is complete.
So, basically what Strata does is — they make you shareholders of a private limited company that owns the property.
And as your asset manager, Strata manages the property on behalf of this SPV.
And as your asset manager, Strata manages the property on behalf of this SPV.
If they get an offer for the property which they feel is great, they present that opportunity to all the investors.
But this is for the collective.
You can also sell it directly to your friends or family without any hassle or let Strata handle that for you!
But this is for the collective.
You can also sell it directly to your friends or family without any hassle or let Strata handle that for you!
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