In this review, I’ll cover everything you need to know about RREAF Holdings.
As a matter of fact…
What I’m about to share with you is exactly the same information that has helped more than 73.9% of our readers with their questions about how to make money with real estate.
Now, I do want to say this first…
Even though you might have some pre-conceived notions about RREAF Holdings… when you’re finished with this review, you’ll feel confident that whatever decision you make will be the best one for you.
So, let’s get started…
This review will go over RREAF Holdings to see if it really is the best real estate crowdfunding platform out there.
You’ll learn whether commercial real estate is the right online business for you.
RREAF Holdings is a course that teaches you about real estate investing.
If you’ve read my other articles on real estate investing, you’ll know there are 3 primary ways to invest:
Wholesaling, buy-and-hold, and flipping.
While each has pros and cons, there is a ton of potential for success in investing in real estate.
Real estate has created some of the largest fortunes in world history.
That being said, you should take some time to seriously think about something:
Is now the best time for YOU to get into real estate investing?
Because despite the potential upside, investing in properties or land takes a lot of capital, and is very labor intensive.
That means if you:
- Have less than 3 hours per day, OR
- Aren’t sitting on $20K+ in disposable income
This may not be the best time for you to start investing in physical real estate.
Don’t get me wrong, real estate investing can be an amazing way to protect your assets while generating cash – but there’s a time and a place for it.
But there’s good news!
All you need is a system to generate the cash (& free time) you need to be ready for real estate investing.
My preferred method of getting there is by becoming a Digital Landlord
It takes the benefits of real estate investing, but removes many of the barriers (& annoyances), like:
- Small cash flow on properties
- Having to take out debt
- Dealing with repairs and upkeep
- Dealing with tenants
The cool part is that the income is mostly recurring (AKA semi-passive).
You could make anywhere from $2,000-$10,000+ per month doing it.
You can build it as big (or small) as you feel like, without the annoyances I listed above.
If that sounds interesting, you might want to think about becoming a Digital Landlord.
Then, you can take the profits and start investing in physical real estate a year or two from now.
If you wanna see what RREAF Holdings looks like on the inside, keep reading.
What Is RREAF Holdings?
RREAF Holdings, headquartered in Dallas, TX, is a vertically integrated company with subsidiaries that handle every aspect of buying, developing, operating, and selling a property.
RREAF Holdings is a privately held commercial real estate corporation based in Dallas, Texas, with a track record of success in purchasing, developing, asset management, ownership, repositioning, and financing complex real estate projects around the U.S.
Besides being a commercial real estate developer, RREAF Holdings also serves as a crowdfunding platform for qualified investors.
RREAF is a crowdfunding site that has been around for over a decade but has only recently started offering crowdfunding on its internet platform.
Investing directly with a deal sponsor rather than an intermediary is a crucial differentiator.
About RREAF Holdings LLC
For the past 35 years, RREAF Holdings LLC (“RREAF”) has been a privately held, vertically integrated corporation in the commercial real estate industry.
RREAF focuses its portfolio of commercial real estate projects and development under three platforms aimed primarily at catering to the Middle America workforce community: programmatic value-add multifamily acquisition, opportunistic hospitality, resort redevelopment, and core ground-up development.
RREAF employs over 300 people, primarily in the South and the Southeastern United States.
They handle various commercial real estate investment matters, including in-house underwriting/due diligence, capital markets, acquisition, asset management, property management, construction management, project development, accounting, and legal support.
Over the last five years, RREAF has created a varied portfolio in its key competencies totaling more than $2 billion and more than 12,000 units with the help of debt and equity alliances.
It aims to continue developing these platforms.
RREAF seeks to improve the lives of its investors, partners, property residents, and guests by offering exceptional service, excellence, and expertise while maintaining integrity, vision, values, and purpose. Please visit RREAF.com for additional details.
Is RREAF Holdings A Good Investment?
Investors in RREAF Holdings have benefited from the company’s shrewd acquisitions. Learning a platform’s business model is crucial, seeing if your interests align with it, and evaluating whether its investment strategy benefits you.
RREAF Holdings has better control over each investment as a fully integrated corporation. Unlike other sites, which contain arrangements with third-party advertisers who manage all the details.
However, there are several drawbacks to this partnership.
Because RREAF (directly or through a subsidiary or connected party) manages practically every aspect of development and operation, investors are at greater risk if the company struggles or fails.
While your investment is in a distinct legal entity (and thus not directly vulnerable to RREAF’s bankruptcy), having one business handle every facet of every contract could cause issues keeping your investment intact.
What Are RREAF Holdings’ Pros And Cons?
- Experience: Key leaders have worked in development, finance, and construction for many years. That kind of track record and expertise is invaluable to have on your side.
- Full integration has some advantages, including complete control over every area of each project and experienced executives with a track record for success.
- RREAF puts skin in the game by investing 5-10% of the required money in each contract.
- The deal flow is consistent, with a few deals shown and spanning several real estate categories. Master-planned communities in Texas have given it a head start in developing new properties in the area.
- Investors can choose from various projects in the company’s development pipeline, including multifamily, single-family, and retail properties.
- Investing in a self-directed IRA: RREAF is compatible with most SDIRA custodians.
- Integration: Even when transactions are constituted as bankruptcy-remote businesses, investors rely on RREAF for everything. Failure of the RREAF would have ramifications for every contract, potentially resulting in losses owing to mismanagement.
- Only Accredited investors can participate: Only investors with a net worth of more than $1 million (excepting your primary residence) or $200,000 in annual earnings are eligible to invest in RREAF projects.
- Minimums above average: Some deals need a minimum investment of $25,000, although bigger minimums are more prevalent.
- High-leverage transactions: Many of its properties are funded at an average debt-to-value ratio of 70%. This is an extremely high level of leverage in commercial real estate, which increases the risk of loss for investors.
Is RREAF Holdings Legit?
As a legitimate business, you can put your trust in RREAF Holdings.
Over $750 million is managed by RREAF Residential’s multifamily portfolio, which includes 9,700 units. The crowdfunded real estate investment portfolio managed by IIRR Management Services is among the largest in the world.
In addition, it has two capital partnerships that raise finance and equity from various investors to acquire and develop real estate.
The company’s size allows it to fund massive projects like its most extensive offering in early 2021. The Sun Belt 12 portfolio attracted $120 million in equity and had a $386 million market valuation.
With property management, construction, and asset management subsidiaries, the corporation is involved in every area of commercial real estate, including those that create continuous cash flow regardless of economic conditions.
And even if you’re dead set on becoming a Real Estate Investor, you’ve got way better options than RREAF Holdings.
Keep in mind, I don’t get paid to promote any of the programs I review. I personally think Commercial Real Estate is a great business model, but you could end up leaving way too much money on the table.
RREAF Holdings’ Performance
Although it has been around for a while, RREAF’s online crowdfunding platform is still in its infancy. However, it seems to be functioning properly thus far. As of my review in the first quarter of 2022, it had either completed or committed to selling eight separate multifamily projects.
IRRs ranged from 7.02 to 29.8% for holding periods ranging from one to five years.
RREAF Holdings Management
Kip Sowden, RREAF’s current CEO, is in charge of the organization. He’s been in the business for 30 years, and during that time, he’s acquired, operated, and developed properties worth over $400 million and negotiated transactions worth over $2.5 billion.
Last year, Jeff Holzmann was promoted from President of Asset Management to COO. Real Estate Shares are his domain. We spoke with Holtzmann in 2020.
Former COO Doug McKnight and CFO Mitch Provosty are prominent professionals with extensive experience in real estate finance, operations, and construction.
How Does RREAF Holdings Work?
To differentiate itself from competing platforms, RREAF Holdings only features sponsored deals. Subsidiaries of the parent company will oversee property and construction management.
RREAF developed RREAF Construction Services (RCS) to improve the development and construction process in 2020. The affiliate will help the corporation construct master-planned communities, multifamily complexes, and retail developments.
RREAF says it rarely buys publicly listed assets instead of relying on its executives’ broad experience and relationships. Sowden, for example, has been a licensed Texas real estate broker for over 20 years.
It also has a large internal development pipeline. It contains a 3,000-acre master-planned community near Midlothian, Texas, with multiple development opportunities over the next five to 10 years.
It also offers a master-planned community in Salado, TX, with multifamily, single-family, and mixed-use options.
Who Can Invest With RREAF Holdings? What Is The Minimum Investment?
The minimum net worth required to invest in RREAF Holdings is $1 million (single or joint), or an annual income of $200,000 (single) or $300,000 (joint) with a reasonable expectation of maintaining or increasing that level of income in the future.
Investing minimums vary, with the lowest indicated at $25,000 and the highest at $100,000. Most transactions demand a minimum investment of $25,000 to $50,000. However, some require significantly more.
What Are RREAF Holdings’ Fees?
RREAF Holdings is a vertically integrated real estate company, which means that the fees it could earn are more varied than those of other platforms that rely solely on sponsor listing fees or investor asset management costs to generate revenue.
Asset Management Fees
RREAF earns 2% purchase, 1% financing, and 2% annualized asset management fees.
Depending on the transaction arrangement, the sponsor can earn various fees. I’ve seen structures give investors cash distributions of between 7% and 8% (sometimes more or less), with the remaining distributable operating flow split 80/20 between investors and sponsors. Investors are paid last.
A similar split is usually in place when you sell or refinance a property, paying investors up to a certain amount first. Usually, 10% or more, with the incremental net proceeds split between investors and the sponsor.
Reading the placement memorandum for each trade is critical, as the split can vary substantially. For example, one of the analyzed acquisitions paid out 70% of the net transaction proceeds to investors. In comparison, the other paid out only 50%.
You must read the fine print to learn how you and RREAF generate money.
Property Management Fees
It also receives variable property management fees paid from operating cash flows as the project operator (more precisely, a subsidiary or related party). The benefit of having RREAF as a property manager is greater control; the disadvantage is that the rates it receives may be above market rates.
RREAF Holdings Returns: What Should You Expect?
This team has built real estate over numerous cycles and a fully integrated approach. So there’s something to like about its crowdfunded services. While it hasn’t completed many acquisitions, the early returns have been great.
By early 2021, the company’s multifamily platform had closed five deals. These deals generated IRRs between 7.02 and 29.8% and equity multiples between 1.25 and 2.09 times. It had many more contracts with buyers or listings with brokers. These deals would give investors IRRs of 18.3% to 23.93% and equity multiples of 1.76 to 2.02.
Nonetheless, investors should examine the businesses’ greater risk profile, as they are generally development projects that require more debt than is prudent.
Leverage increases risk, especially if a property is under construction, not entirely occupied, or cyclically susceptible.
Put it all together, read the placement memorandum for each offer you’re contemplating to learn about the cost structure, potential gains, and hazards.
How Can You Sell RREAF Investments?
Investments in commercial real estate are not like stock market investments.
In addition, none of the placement memorandums we analyzed included an early redemption scheme.
That is, once you invest, your funds are locked up for the duration of the investment.
Depending on the deal’s structure and market conditions, this might be a few months or several years. From the data it gave, the shortest holding duration was less than a year, while most others were over five years.
More extended holding periods often benefit investors. But that means their cash is locked up for years.
Put only money you can afford to lose on the line, and never store cash you might need in an emergency.
Going Mobile: Is There An RREAF Holdings App?
RREAF doesn’t have a mobile app. However, using the web browser on an iPhone was quite similar to using the platform on a PC.
RREAF Residential is a full-service property management company focused on worker housing. RREAF Residential now manages 9,000 multifamily units, mainly in the South, Southeast, and Southern Atlantic regions of the United States.
RREAF Residential takes pride in its ability to manage assets effectively and professionally. Thanks to a skilled corporate and on-site workforce, RREAF Residential focuses on increasing sales and profits while providing secure and affordable homes to middle America. The manager advises on finances. Several others work for investment banks.
RREAF Risks: Is RREAF Holdings Safe To Invest With?
RREAF has a strong management team with extensive experience in private real estate investment and a proven track record of success.
Management’s broad connections can help find the greatest bargains.
The corporation has a lot of control over other platforms because it manages the development, property management, construction, and other areas.
This can aid with execution and potential returns.
On the other hand, because RREAF also caters to institutional and other private investors, not every trade it participates in appears on the web platform.
Because RREAF handles so many aspects of each project, it risks losing money if it fails (RealtyShares is a cautionary tale).
Given its size and scope, this risk seems remote. Investors should also examine the benefits and costs of complete integration since the sponsor leverages internal assets, subsidiaries, or affiliated companies rather than external bidders.
Finally, increasing debt leverage used to fund real estate acquisitions increases risk.
When all is said and done, investors must evaluate if the benefits of the management team and integrated model offset the increased risks associated with integration and higher debt leverage.
Overall, the platform’s seasoned management team and early results are appealing. Those features make it appealing to accredited investors.
Are There Alternatives To RREAF Holdings?
Yes, there are plenty of other business models to choose from if you want to pursue this making money online. Here are just a few:
Is RREAF Holdings A Scam?
So, time for the $1,000,000 question – is RREAF Holdings a scam?
No, not technically. You can 100% make money with this program, though it’s not nearly as simple as they make it seem.
As with most businesses, there is A LOT of work to be done upfront & no guarantee of you being successful.
Not to mention the profit margins are typically pretty small.
Don’t get me wrong, I’m a big proponent of front-loading work now, so you can reap the rewards later.
But if I’m gonna do that, I want the rewards to be HIGH and virtually guaranteed.
I’d rather put in that same 3 months of work (in my spare time) & build a handful of Digital Rental Properties that each produce $500-$2,000 checks every single month afterward (AKA recurring income).
And the cool part is that you can do it in a lot less time than 3-months (I personally did it in my first 2 weeks of being a Digital Landlord).
Unlike physical real estate, you can do it from anywhere in the world, so it’s a genuine “laptop-lifestyle” business.
All you need is an internet connection.
Some of my friends are Digital Landlords that run their 6-figure businesses from:
- Camping trips at national parks
- Beachfront in Hawaii
- On the road in a camper van (with a pet pig!)
They focus on living an enjoyable life first, and focus on income second. All thanks to this program.
They can take weeks or months off, and money keeps rolling in.
Living happily is the top priority.
If the thought of living perpetually at your dream vacation spot interests you, being a Digital Landlord might be for you!
What Is My #1 Recommendation For Making Money Online In 2022?
I’ve personally tried all of the major online business models:
- I’ve sold fidget spinners through Amazon FBA
- I’ve drop-shipped a toilet bowl putting green on Shopify
- I’ve sold women’s health supplements via Clickbank affiliate marketing
And I made money with all of them, so trust me when I say: there is no “perfect” business model.
It’s worth noting that I FULLY endorse real estate investing as a way to grow wealth, and that’s why I invest my own money in commercial and residential real estate.
That being said, my #1 recommendation for making real money online as a beginner is, hands-down: being a Digital Landlord.
Whether you’re a complete newbie, or you’ve been around the block before but have never had that “big win” to propel you forward, becoming a Digital Landlord is for you.
Time: If you’ve got a spare hour or two each day, you can do this. If you want to drop everything and go all-in, you can do this. More time obviously means faster results, but even putting in a few hours per day is enough to see real success.
And because of that flexibility, you don’t need to trade your time for money. Once the income starts, it’s recurring.
That means you can take a month off, travel the country, pursue a passion project, chill on the beach, or charter a boat across the world.
But you can only do that once you’ve created an income stream that doesn’t require YOU to be there all day, every day.
Real estate investing is a FULL-TIME JOB. If you stop finding deals, your money dries up.
Ownership & Control: Unless you’re buying your properties in cash, you don’t technically own the properties – the lender does.
If you miss a single payment, the property can be taken from you.
Why pour your soul into a business that could be taken away from you at the drop of a dime?
When you’re a Digital Landlord, you literally own all of the assets, which means you have ultimate control.
Ongoing costs: With real estate, profit margins are actually pretty slim. Real wealth is made in owning the assets, and owning A LOT of them.
Being a Digital Landlord, your profit margin is nearly 100%. Watch here to learn how.
Just a reminder: these Digital Rental Properties are worth (at a minimum) $500/mo in semi-passive income. And each time you create another one, your income increases, and the effort put into creating the next property decreases.
Best-case scenario, you have properties bringing in over $3,000+/mo on auto-pilot.
It’s Effectively Copy-Paste: Here’s my favorite part: once you have your first Digital Rental Property up, you can literally copy-paste another version of it and find another willing “renter” in a few days. DOUBLING your income doesn’t get much easier than that…
If you wanted to double your income with real estate investing, you would need twice as many properties, or double your profit margins on each property. And I can guarantee you, that’s a lot harder than a few clicks & a phone call.
Make Money Helping Real People: When you’re a Digital Landlord, you’re helping solve REAL problems that people are ASKING for help with:
Small local businesses around the world need one thing: customers. Without them, their business would fall apart. If we can provide those customers, they’re going to be really happy – and they’re going to pay you for it.
You’re helping a struggling mother or father put food on the table for their families, put their kids through college, or simply live life a little bit more comfortably.
Having this type of impact on the world is what will help you sleep soundly at night.
So, the rest is up to you. You could keep looking at other opportunities like RREAF Holdings, which might make you money.
You could keep researching and researching for the next few months (or few years), never making a concrete decision.
OR, you can look deep inside, think about those dreams, hopes, & desires, and make the decision to ACTUALLY make it happen, just like it has for thousands of other students before you.
Making a fortune while actually helping real people that need it.
If this sounds like you, click here to see how it all works.