The billionaire founder of Amazon.com, Inc. (NASDAQ:AMZN) Jeff Bezos just made his second investment in the real estate investment platform Arrived Homes during the company's $25 million Series A round.
Bezos' personal investment company, Bezos Expeditions, first invested in Arrived Homes during the company's $37 million seed round in June 2021.
About Arrived Homes: Arrived is the first SEC-qualified real estate investing platform that allows virtually anyone to buy shares in single-family rental properties with a minimum investment of only $100.
The company acquires rental homes and allows individual investors to become owners in the properties by purchasing shares through the platform. Arrived Homes manages the assets, while investors collect passive income through quarterly dividends in addition to earning a return through appreciation.
To date, Arrived Homes has fully funded 102 properties with a total value of over $40 million.
What's Next for Arrived Homes: The company plans to use the $25 million in funds to further build out its team, secure properties in new markets and provide the option to invest in short-term rental properties on the platform.
Expanded Opportunities for Non-Accredited Investors: Real estate investment platforms, that allow individuals to invest directly in specific assets typically follow Rule 506(c) of Regulation D, which requires investors to be accredited.
Arrived Homes, however, utilizes the more stringent Regulation A in order to provide access to non-accredited investors. This requires qualification by the Securities and Exchange Commission (SEC), which is a much more costly and time-consuming process than offering securities through Regulation D.
Another option for non-accredited investors that's gaining traction in the real estate industry is Regulation CF, which allows companies to raise up to $5 million annually from non-accredited investors. Regulation CF is widely used by startups to raise capital through funding portals like Wefunder, StartEngine and Republic.
One of the newest FINRA regulated Regulation CF funding portals, Invown, has created a marketplace for non-accredited individuals to invest in various types of properties.
Single-Family Rental Market: Investors have a growing appetite for single-family homes, which is no surprise considering that the average rent in the U.S. has increased nearly 15% in the past 12 months and as high as 38% in cities like Miami over the same period.
While the housing market is beginning to cool down in certain areas, homeownership is becoming even less affordable as higher interest rates are adding to the overall cost of buying a home. This is likely to continue adding strain to the supply of rental units, resulting in further rental rate increases.
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