Anyone who wants to invest in real estate can now do so—in Dallas, Austin, and Miami—through a new investing product from Republic and Nada.
Called Cityfunds, the launch combines the best of both companies.
New York-based Republic is an investment platform that allows early-stage startups to raise up to $1.07 million from anyone—friends, family, fans, etc.—using regulation crowdfunding. It puts the power in the public’s hands, allowing them to invest in the future they believe in.
Nada is a Dallas-based digital real estate startup that offers an alternative solution to the traditional commission structure of selling a home. The vertically integrated platform democratizes real estate wealth, completely transforming a real estate transaction into a full homeowner service relationship.
Cityfunds marries the two. The index-like investment provides targeted exposure to a city’s real estate market through a portfolio of residential real estate assets—meaning investment opportunities are accessible as regulation crowdfund offerings hosted on Republic. Similar to the way public stocks are traded, Republic and Nada aim to enable the trading of interests on a secondary marketplace.
Cityfunds will be managed via a joint venture between Republic Real Estate and Nada.
“Republic’s latest real estate investment opportunity offers investors the chance to invest directly into some of the most dynamic real estate markets across the country,” Jesse Stein, head of real estate at Republic, said in a news release. “While real estate investment has only been an option for accredited investors, we’re confident our new approach—transparent, low cost, and available to anyone—will make the world’s largest asset class accessible to all investors.”
How it works
Think of Cityfunds as a way to own a piece of a city you love.
Each Cityfund will only invest in single-family residential real estate in an individual city. The model takes two approaches: The acquisition of single-family rental homes and fractional investments in owner-occupied homes.
The latter approach will use Nada’s newly introduced Homeshares product, which offers a way to trade in fractions of your home equity for cash.
Like retirement and savings, Nada believes that home equity is earned. Homeshares acts as a way to unlock earned equity—by trading it in for cash without debt—to make homeownership more flexible. It requires no monthly payments, and the unlocked equity funds can be used to pay off debt, renovate, invest, and more.
This gives homeowners liquidity and diversification options, while at the same time unlocking inventory for investors interested in high-demand real estate markets that may have limited housing supply.
All Cityfund investment activity will be accessible through Nada’s portfolio manager app. That includes acquisition tracking, property-level information, and valuation estimate updates.
“Homeowners are massively overexposed to one illiquid asset—their home, while individual investors are unable to gain exposure to real estate due to low inventory and lack of funds required to compete with institutional investors,” John Green, co-founder and CEO of Nada, said. “Nada’s Homeshares product combined with Cityfunds solves both of these problems, bringing liquidity to homeowners and access to real estate for all investors.”
Cityfunds made its debut in Dallas, Austin, and Miami on August 4, but the teams at Republic and Nada already have plans to scale across the country—and eventually, abroad.
The first three funds are already showing activity, according to Nada Co-Founder and CEO John Green. In about 24 hours, “we have $37k in Austin, $25k in Dallas, and $20k in Miami,” he told Dallas Innovates via email. Green invites competitive Dallasites to take a look at the fund.
The companies said Cityfunds was inspired by “the successful transformation seen from actively managed mutual funds to passively managed index-based exchange-traded funds (ETFs).” With ETFs, investors can make more targeted decisions in a specific area, market, or risk profile.
They hope investors who use Cityfunds will get returns generated from rental income and home price appreciation.
Nada and Republic go back
Locally based Nada led a campaign in June 2020 on Republic, raising 100 percent of its fundraising goal in just under a week. By the following year, Nada had raised $1.8 million from 4,000 public equity investors on Republic.
According to Kingscrowd, this makes it the fourth highest public equity capital raise for a real estate company since it began tracking regulation crowdfunding deals in 2017.
As for Nada, it recently closed on a $2.5 million seed round from Global Millennial Capital, bringing its total equity to more than $3 million.
Republic brought its Cities program to Dallas last year as part of its mission to launch in high-growth, up-and-coming cities that are working to level the playing field for entrepreneurs. Republic Cities Dallas aims to connect with the local startup community while highlighting the companies that are raising on Republic.
Quincy Preston contributed to this report.
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Read More:‘Built for the People’: Republic and Dallas‑based Nada Launch Real Estate Index Investing