- Minimum investment required per project is $2,000.
- Sub-$1M equity raises can be hard for developers.
- Developer is concentrating on market-rate multifamily projects in Little Havana and Coconut Grove.
A Coral Gables-based developer has launched a private crowdfunding platform focused on sub-$1 million equity raises for its market-rate multifamily projects.
The developer, Metronomic, is attempting to raise $650,000 to $900,000 for both a smaller rental project in Little Havana and a mixed-use building in Coconut Grove. The projects are slated for first quarter 2016 groundbreakings.
Smaller equity raise challenges
According to Ricky Trinidad, president of Metronomic, launching the private funding platform was a reaction to the difficulties associated with smaller equity raises.
“Getting the sub-$1 million piece is hard,” Trinidad said, explaining that private equity firms typically have a minimum investment threshold of $2 million to $5 million.
Metronomic previously qualified a project with Fundrise; however, the amount the developer wanted to raise was below the platform’s required minimum raise of $1 million.
The developer’s recently launched platform can be accessed via its website and is registered with the SEC. Investors interested in Metronomic’s market rate projects must contribute a minimum of $2,000, with an investment term of 16 months.
So far 12 investors have “subscribed” to the platform according to Trinidad, who’s also been approached by private equity groups looking to take down the whole equity chunk.
Investors in either project are forecasted to receive a 20 percent return on investment in 16 months, the time it will take to build and lease each market-rate project.
“Focusing on market-rate infill projects that are efficiently developed and rapidly sold allows for Metronomic to provide investors a low-risk venture,” the firm stated in a release.
Metronomic develops with a merchant build mindset. In short, they build a project, lease it and sell. Trinidad said the firm is currently in talks with several REITs that want to purchase what they build. EWM Realty International will serve as the developer’s leasing and sales agent for all upcoming projects.
The developer has four additional multifamily projects in its pipeline. Similar to the projects available for investment, the upcoming deals will be market rate and located in Little Havana and Coconut Grove.