Gatsby Investments (Real Estate) Valuations at a Glance
What is Gatsby?
Gatsby is a real estate syndication platform that focuses on properties in the hot Los Angeles real estate market. The platform was founded by businessman Dan Gatsby in 2016, who initially made his fortune in the printing industry by innovating an online ordering process and software for his business to manage jobs. large and complex print orders via a single, simplified online ordering platform.
After selling his printing business, Dan turned to real estate syndication. His goal was to create a simple, easy-to-use online platform that would allow investors across the country to be part of syndicated deals based on the famously lucrative Los Angeles real estate market.
Dan has assembled a team of real estate veterans and invested considerable capital in real estate transactions of all kinds in and around Los Angeles. After proving his ability to identify and manage profitable investments, he launched the Gatsby platform.
Gatsby offers real estate deals to accredited investors where they can buy shares at different prices. While most competing platforms only focus on institutional investments or multi-family deals, Gatsby’s offerings are spread across the spectrum of real estate transactions.
The platform offers everything from short-term syndication deals on single-family home flips to long-term investments in multi-family properties. A particular advantage of this business model is that it allows Gatsby to provide shorter term deals. Some of its single-family home flip offers have holding periods as short as six months.
Since the Gatsby platform is based in Los Angeles, it makes perfect sense that its offerings are centered around the Los Angeles area. The syndication offers available are limited to this area. Much like a quality bistro-style restaurant, Gatsby has a small but solid menu for investors to choose from. The LA-exclusive focus means it doesn’t have as many offerings as competing real estate investment platforms that have nationwide offerings.
Gatsby’s customer service is what you would expect from an online real estate syndication platform. The “Contact Us” link is easy to find, and account holders can schedule a call that allows investors to speak directly with one of Gatsby’s investment specialists. You go directly to a human representative who is ready to help you.
Unlike some competing platforms, Gatsby does not have a “live chat” option or a 24-hour customer service line, but this feature reflects the fact that Gatsby is a more intimate platform that offers customers personalized attention when they need it. To be fair, the bells and whistles offered by some other platforms aren’t always necessary, and Gatsby certainly has a robust customer service department in place to meet their customers’ needs.
Gatsby has a solid customer knowledge base, which includes videos, articles, and a “Questions and Answers” section. Investors or account holders can find great information here and learn everything they need to know about how to set up their accounts and start investing. Overall, this is a customer service setup that includes the essentials to meet and exceed customer needs.
Gatsby may only be available to accredited investors, but it offers a nice range of minimum investments. Minimum redemptions and holding periods vary depending on investment objectives. Some of the single family home flip offers have minimum investments as low as $10,000 and holding periods as short as 6-8 months.
Larger and more complicated deals for multi-family or luxury home development offers have buy-ins ranging from $25,000 to $100,000. As you might expect, the complexity of these trades and the time it takes for them to stabilize and generate profits result in longer holding periods. Multifamily and larger transactions have more traditional holding periods.
All in all, even if there are not many offers, there is something for everyone. It’s clear that Gatsby is more about quality than quantity, and the pro forma of its offerings is appealing.
The Gatsby platform is easy to use. Signing up is simple and the platform does a solid job of guiding investors through the account opening and investing process. By clicking on investment offers, investors will access an easy-to-understand breakdown of investment fundamentals.
It’s especially nice that each offer includes its own instructional video that details the specifics of the investment and a handy return on investment (ROI) calculator. Enter your desired investment amount into the chosen offer calculator, and it estimates your return on investment based on the offer’s pro forma goals.
Gatsby vs Competitors
The world of online crowdfunding and real estate syndication platforms seems to be getting bigger every day. Gatsby is a relatively new platform, but it makes a legit game in the market with a unique business model. For some, the Southern California investment focus can be limiting, but for anyone looking to invest exclusively in Los Angeles, Gatsby is the perfect fit.
Compared to competing platforms like Crowdstreet and RealtyMogul, Gatsby has fewer offerings, and investing on these platforms is limited to accredited investors. Crowdstreet and RealtyMogul have set investment minimums of $25,000, while Gatsby has lower minimums and also some offers with six-figure buy-ins. However, Gatsby gets good marks for having deals with shorter holding periods.
The relative lack of offers at Gatsby is likely due to the fact that Gatsby sponsors all of its own offers as opposed to its competitors who have offers from a multitude of different sponsors all over the world.
The platform has its own capital invested in all its offers. Gatsby offers deal-by-deal investing that gives investors greater control over the property they want to invest in.
New Accredited Investors
Gatsby is a relatively new player on the online real estate syndication platform, but he seems to be here to stay. It has an impressive track record of averaging 26.5% annual returns for investors in 2021.
It offers investors an enticing combination of low minimums, short holding periods, and relatively low risk due to the platform’s focus on Southern California, a reputedly robust real estate market. The main thing is the following. If you were looking to syndicate deals in Southern California and Los Angeles but didn’t know where to start, Gatsby would be a good place to start.
Frequently Asked Questions
What is real estate syndication?
Real estate syndication is a method of raising capital to finance a real estate purchase. Specifically, a real estate syndication deal raises funds offering multiple investors the opportunity to purchase shares in a particular property. If you don’t have the capital to buy an investment property on your own, you can invest with a syndication company alongside other investors to own the property together.
Are real estate syndication offers safe?
The short answer to the question “Are real estate syndication offers safe?” is no, they are not. Investing always involves risk. No investment is ever “safe” or “guaranteed” not to lose money. Real estate syndication deals allow investors to minimize risk by raising capital from multiple investors. However, any equity investor engaged in a syndication deal always runs the risk of loss if the investment does not perform as expected.