New crowdfunding app lets you invest in real-estate projects for as little as $100 with the chance for big returns
- Real-estate crowdfunding company NYCE Companies just unveiled an app for investors.
- The firm, which develops apartment buildings, sells shares in them for as little as $100.
- CEO Phillip Michael’s goal is to support the creation of 100,000 millionaires of color by 2030.
- See more stories on Insider’s business page.
The retail investors who propelled Gamestop’s wild romp through the stock market have been busy throughout the pandemic as app-based entities and commission-free brokerages “democratize” investing for all.
While retail investors are primarily active in public markets, real estate crowdfunding companies and other firms that trade alternative assets have also seen a boost.
Take NYCE Companies, a holding company for real-estate projects like residential apartment buildings that are developed by the operators and then sold in small fractions to investors. Last year, it rode the wave of retail-investor interest to become the fastest real-estate company to sell $1 million in stock via the US Securities and Exchange Commission’s crowdfunding offering.
On Wednesday, NYCE further expanded access to small-time investors by launching its own app, REIFY by NYCE, which allows users to buy $100 shares of any of the company’s real-estate projects. The platform also allows investors to buy a stake in an instrument — akin to an exchange-traded fund — that contains a portion of the real-estate company’s holdings.
Phillip Michael, 36, and his soccer star nephew, 29-year-old FC Barcelona forward Martin Braithwaite, founded NYCE Companies in 2016 after the Danish-born pair began investing in real estate. The company — which Yahoo! Finance called “the Robinhood of real estate” — was officially formed in 2020 with the goal of raising funds from smaller investors looking for access to commercial investments but without the huge sums of money typically required to jump in.
Michael has become a social-media influencer, with 123,000 followers on Instagram who tune in for his posts with investing advice, financial literacy explanations, and how-people-get-rich success stories.
He told Insider that one of NYCE’s goals is to mint 100,000 millionaires of color by 2030 by selling them shares of the company’s real-estate projects, which include buildings in New York, Philadelphia, and San Antonio, Texas.
How NYCE’s crowdfunding model works
What sets NYCE apart from investing apps like Robinhood or real estate fractional share companies like Crowdstreet is that it first purchases and develops properties with its own funds, then transfers ownership of the property — in $100 bite-sized increments — to investors.
Michael said that this approach — versus using private equity or venture capital money to bankroll the projects — means that their interests are fully aligned with their investors’.
“Our projects are vetted by us with our own wallets,” Michaels told Insider.
The company’s next offering will be its second Philadelphia project, a smart-tech co-living building near Temple University. Its first Philly project, fully funded via crowdfunding platform Republic, contains 17 co-living units for both students and tech entrepreneurs.
A post shared by Philip Michael | #TribalChief (@yfwtb)
NYCE’s millionaires of color mission is part of a plan to bring the returns from commercial real estate investing to people who have historically been shut out of that avenue of wealth creation. A large portion of the racial wealth gap can be attributed to racist redlining and homeownership laws across the country.
Braithwaite and Michaels, who are both Black, set up their business as a way to give underrepresented communities the opportunity to gain financial success through real-estate investments.
“We’re always looking for ways to give back,” Braithwaite, who is NYCE’s chief vision officer, said in a press release. “This is one of those ways we can do that.”
Michael contrasted his approach with that of some of the financial giants who, after the Black Lives Matters protests in 2020, pledged money to advance racial equity. In October, for example, JPMorgan Chase announced it would spend $30 billion to promote racial equity in the US.
If NYCE is able to maintain high engagement from small-time investors, Michael hopes to initiate partnerships with some of these major financial institutions that would direct their funds towards wealth-building in underserved communities.
“Every app download gives us leverage to say, ‘You can’t overlook this segment of the population. Don’t just utilize them for overdraft fees and your credit card business,’ ” Michaels told Insider. “Let’s mobilize and activate this very willing segment of the population together.”
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