CityVest is a web-based real estate investment platform that was established to give small-to-medium-sized investors access to real estate investment opportunities that typically require 6-figure minimum investments. CityVest does this by pooling multiple investor contributions into 1 bundle large enough to satisfy the minimum investment requirements of the best institutional private equity real estate investment funds.
- Individual investors seeking access to institutional investments
- Experienced investors looking to diversify their portfolio
- Investors seeking investments with strong due diligence and screening
- Access to high-performance institutional funds
- High returns
- Intense vetting of investment opportunities
- Third-party due diligence on all funds
- No registration needed to review investment opportunities
- Quarterly distributions
- Only available to accredited investors
- Not a lot of investor control of fund options
CityVest Ratings at a Glance
Who Is CityVest?
It’s no secret that real estate investing has helped countless investors build wealth over time. However, even within the framework of real estate investments, categories differ. Buying a single-family home or sole piece of investment real estate and selling it after it appreciates forms basically the first level.
The next level up comprises investment properties that generate revenue or real estate investment trusts (REITs) that use investor money to buy large rental property portfolios. At the top of the food chain are large institutional funds that can provide double-digit returns annually.
Historically, the 6- and 7-figure buy-ins most institutional funds require have kept smaller investors locked out of the club. That’s where CityVest comes into the picture. It has a unique business model that aims to expand investor access to the most highly sought-after institutional funds by taking an innovative approach to crowdfunding real estate investments.
How Does CityVest Work?
CityVest combines the best aspects of real estate crowdfunding, institutional investing and on-line real estate platforms into 1 high-performance investment machine. Much like the old mousetrap, the beauty of the CityVest business model lies in its simplicity. Its founders realized that the only thing keeping thousands of medium-sized investors from buying into high-performing institutional funds was the massive minimum investment requirements.
This situation created a conundrum for both the funds and potential investors. With more money, institutional funds could buy more deals, but their deals are so cashflow intensive that setting a $25,000 or $50,000 buy-in would raise money too slowly for them to ever break ground on new projects. CityVest solves that problem by combining bundles of investor cash until it meets the minimum threshold for institutional investments.
CityVest investors don’t actually invest in the funds themselves but instead buy into a management entity run by CityVest. Then the CityVest management entity puts those funds into carefully vetted real estate development opportunities and real estate offerings. Once those funds generate income, it is distributed to CityVest investors on a quarterly basis.
This plan creates a win-win for both investors and developers. Investors in CityVest can benefit from the double-digit annual returns that can come from well-vetted, high-performing real estate funds. Developers get a new source of funding because CityVest opens its development opportunities to a whole new class of investors.
CityVest investors pay an annual fee that’s usually less than 1% of their total investment. Additionally, CityVest charges a small, yearly administrative fee to cover the cost of running the website, meeting federal reporting requirements and other logistics. Lastly, the accounting and administrative costs associated with individual investments are reimbursed to CityVest before investors receive net dividends. All things considered, it’s a pretty reasonable fee structure.
CityVest is remarkably easy to use. Signing up is as easy as 1,2, 3, and when it’s done, investors are directed to a user-friendly “Investor Dashboard” where they can browse active deals, look for new ones and print out their account information, all with the click of a mouse.
Additionally, contact information for CityVest (both phone and email address) is prominently displayed on the investor dashboard. The top of the dashboard also has quick scroll-down links to educational resources and active deals seeking funding.
The individual investments page outlines the basics (e.g., minimum investment, predicted return rate, type of fund) in a simple-to-read fashion. Once you click on an investment that interests you, you’re directed to a comprehensive investment overview section. Overall, this well-designed website is both user-friendly and easy to navigate.
The key section that sets CityVest apart from all other online investment marketplaces - its Due Diligence section. CityVest engages a third-party due diligence firm named Buttonwood which provides a detailed Due Diligence Report on every investment opportunity so that CityVest’s investors have greater confidence and reduced risk.
The Due Diligence Reports provide a verification of several critical aspects of an investment manager such as confirming that the investment manager has key man life insurance; the manager has invested a certain minimum amount invested in their own fund (skin-in-the-game); checking SEC, FINRA and social media for adverse reports; and of course, background checks for bankruptcies, lawsuits and liens.
CityVest has a solid investor education section that provides a wealth of information about real estate investing. The first section is a wonderful letter from the company’s CEO, Alan Donenfield, explaining how he came to be involved in real estate. Also included is a great Frequently Asked Questions section that does an admirable job of answering basic “how to, what, when and why” questions investors may have.
Clicking on the “Real Estate Investing” tab takes users to a CityVest Education and Articles section. Here, investors find numerous articles, graphs and resources designed to walk them through the benefits of real estate investing and why they should invest with CityVest.
Perhaps the best section here is the “Learn Real Estate” tab, which is a primer on investment real estate for newer investors. Topics for investor education also include lessons on great topics, which include:
- How real estate deals are funded
- Real estate investment risks
- Understanding real estate interest rates
- Real estate investment strategy
Overall, CityVest’s customer education section is solid but not spectacular. It’s got all the information an investor may need in article form, but doesn’t use Zoom lessons or webinars, which would definitely be a more user-friendly option.
With that said, it’s not at all lacking in quality information. It even posts a daily investor conference call with the CEO. Additionally, someone who is completely new to real estate investing could peruse CityVest’s customer education section and come away with a solid grasp of the fundamentals of how real estate investing works, how it’s financed and how investors make money.
CityVest definitely has a solid customer support set-up. After sign-up, you receive not only the perfunctory “welcome to CityVest e-mail” but also a personal follow-up call from a CityVest representative to see how they may be able to answer your questions or help you along with the process.
Email inquiries receive a quick response, and it’s clear that CityVest has a strong commitment to customer support. Perhaps the only thing missing here is a live-chat option on the splash page. With that said, it’s obvious that CityVest investors (or potential investors) won’t be left alone in the woods, and that’s what’s important.
When it comes to any online investment platform, the quality of the offerings is the meat and potatoes. Without a doubt, CityVest shines the brightest here. CityVest has high-quality investment offerings that promise the kind of internal rate of return (IRR) and quarterly pay-outs that make investors’ mouths water.
Although many of CityVest’s offerings are closed at the time of this writing, the current open opportunity is a workforce housing fund operating on the California-Nevada border with a targeted IRR of 13% to18% and a $25,000 buy-in. Normally, access to that kind of fund would cost hundreds of thousands, if not millions of dollars.
The only reason more CityVest offerings are not available is that most of them have hit their funding targets, which only underscores the quality and desirability of CityVest offerings. A sampling of closed deals reveals incredibly diverse investment offerings ranging from equity funds that manage commercial or residential real estate to debt-based funds secured by mortgage loans.
All CityVest offerings are vetted by a third-party due diligence firm, and the investment overview includes that report, historical performance data for the fund itself and any other documents related to the fund. CityVest’s high level of transparency says a lot about both the quality of its investment offerings and the confidence CityVest has in presenting them to investors.
The multi-million dollar aggregate size of each Access Fund allows CityVest to negotiate better investment terms than other million dollar investors in these funds. CityVest’s Access Funds are able to obtain a 4% higher preferred return with lower fees.
After the boilerplate language that says all investments carry a risk of loss, the next caveat of investing is that past performance is no guarantee of future results. That’s as true for CityVest offerings as it is for anyone. CityVest states on its website that “your investment involves substantial risk including risks to the value of the property at the time of its liquidation.” With that said, CityVest only targets funds that have the potential to generate an IRR of 20% or more. Before being selected, these funds are put through the paces by CityVest’s management team and then audited by its third-party due diligence firm.
Additionally, investors can check out the past performance of all CityVest offerings by clicking on their preferred individual investment and reviewing the fund’s history. What all this means for investors is they can have confidence that the pro-forma numbers in any CityVest prospectus have a high probability of being met, meaning they can expect a reliable quarterly dividend.
CityVest is a well designed, comprehensive effort to bridge the financial divide between accredited investors and the best high-performance institutional funds. What makes the whole package even better is CityVest’s incredibly stringent due diligence and its commitment to transparency. The entire platform dovetails nicely with an attractive, functional website and added bonuses like daily conference calls with CityVest’s CEO. All things considered, if you’re an accredited investor on the hunt for passive income or an opportunity to diversify your portfolio, CityVest is worth a long, hard look.
Best Access to Instituional Real Estate Private Equity Funds