Gatsby is a real estate investing platform that relies on syndication and crowdfunding to provide investor capital for a range of small- to medium-sized real estate deals. Real estate investing can be hugely profitable. That’s why it’s such a key component of any diversified investment portfolio. Unfortunately, the price of real estate keeps most investors from joining the club. The Gatsby platform wants to change that.
- Real estate investors looking to make small- or medium-sized investments
- Real estate investors looking for shorter-to-medium-length hold periods
- Newer accredited investors who want access to pre-vetted properties
- Carefully selected deals
- Available offerings with medium-to-low buy-ins
- Variety of offerings across several real estate sectors
- Shorter hold periods on some offerings
- Only open to accredited investors
- Properties centered in one geographic market
Gatsby Investments (Real Estate) Ratings at a Glance
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What is Gatsby?
Gatsby is a real estate syndication platform that focuses on properties in the red-hot Los Angeles real estate market. The platform was founded by businessman Dan Gatsby in 2016, who originally made his fortune in the printing business by innovating an online order process and software that allowed his business to handle complicated, large printing jobs through a single, streamlined online order platform.
After selling his printing company, Dan turned his attention to real estate syndication. His goal was to create a simple, easy-to-use online platform that would allow investors from all over the country to be part of syndicated offerings based in the famously lucrative Los Angeles real estate market.
Dan pulled together a team of real estate veterans and invested a sizable amount of capital in real estate deals of all kinds in and around Los Angeles. After proving his ability to identify and manage profitable investments, he started the Gatsby platform.
Gatsby offers real estate deals to accredited investors where they can buy equity shares for a variety of different price points. Whereas most competing platforms focus solely on institutional investments or multi-family offerings, Gatsby’s offerings are spread across the full spectrum of real estate deals.
The platform offers everything from short-term syndication deals on single-family home flips to long-term investments on multi-family properties. One particular advantage of this business model is that it allows Gatsby to offer shorter-term deals. Some of its single-family home flip offerings have hold periods as short as six months.
Considering that the Gatsby platform is based out of Los Angeles, it makes perfect sense that its offerings would be centered on the LA area. The available syndication offerings are limited to that area. Much like a quality bistro-style restaurant, Gatsby has a small but solid menu for investors to choose from. The LA-exclusive focus means it doesn’t have as many offerings as competing real estate investment platforms that have offerings nationwide.
Gatsby’s customer service is what you would expect from an online real estate syndication platform. It’s easy to find the “Contact Us” link, and account holders can schedule a call that allows investors to speak directly with one of Gatsby’s investment specialists. You get straight to a human representative who is ready to help you.
Unlike some competing platforms, Gatsby doesn’t have a “live chat” option or 24-hour customer service line, but this feature is reflective of the fact that Gatsby is a more intimate platform that offers clients personalized attention when they need it. To be honest, the bells and whistles that some other platforms offer are not always necessary, and Gatsby certainly has a robust customer service set up to address the needs of its clients.
Gatsby has a solid customer knowledge base, which includes videos, articles and a “Questions and Answers” section. Investors or account holders can find great information here and learn everything they need to know about how to set their accounts up and begin investing. Overall, it’s a customer service setup that includes the key necessities to meet and exceed customer needs.
Gatsby may only be available to accredited investors, but it has a nice range of minimum investments. The minimum buy-ins and hold periods vary with investment goals. Some of the single-family home flip offerings have investment minimums as low as $10,000 and hold periods as short as 6 to 8 months.
The larger, more complicated offerings for multi-family or luxury home development offerings have buy-ins ranging from $25,000 to $100,000. As you might expect, the complexity of these deals and the length of time they take to stabilize and generate profits leads to longer hold periods. The multi-family and larger deals have more traditional hold periods.
All things considered, even though there aren’t a lot of offerings, there is something for everyone. It’s clear that Gatsby is going more for quality than quantity, and the pro forma for its offerings is appealing.
The Gatsby platform is easy to use. Sign-up is simple and the platform does a solid job of walking investors through the process of opening an account and investing. Clicking on investment offerings will lead investors to an easy-to-understand breakdown of the investment fundamentals.
It’s particularly nice that each offering includes its own instructional video that breaks down the specifics of the investment and a handy return on investment (ROI) calculator. Enter the amount of your desired investment into the calculator for your chosen offering, and it estimates your investment return based on the offering’s pro forma targets.
Gatsby vs. Competitors
The world of online crowdfunding and real estate syndication platforms seems like it gets bigger every day. Gatsby is a relatively new platform, but it’s making a legitimate play into the market with a unique business model. For some, the Southern California-centric focus of the investments may be limiting, but for anyone looking to invest exclusively in Los Angeles, Gatsby is the perfect solution.
In comparison to competing platforms like Crowdstreet and RealtyMogul, Gatsby has fewer offerings, and investing on these platforms is limited to accredited investors. Crowdstreet and RealtyMogul have set $25,000 investment minimums, whereas Gatsby has lower minimums and also some offerings with six-figure buy-ins. However, Gatsby earns strong marks for having offerings with shorter hold periods.
The comparative lack of offerings in Gatsby is probably from the fact that Gatsby sponsors all its own deals as opposed to its competitors who have offerings from a multitude of different deal sponsors all over the world.
The platform has its own capital invested in all of its offerings. Gatsby offers deal-by-deal investments that provide investors with better control over which property they want to invest in.
Gatsby is a relatively new player to the online real estate syndication platform, but it appears to be here to stay. It has an impressive track record of an average 26.5% annual returns for investors in 2021.
It offers investors a tantalizing combination of low minimums, short hold periods and comparatively low risk because of the platform’s focus on Southern California, a famously robust real estate market. The bottom line is this. If you have been looking to syndicate deals in Southern California and Los Angeles but didn’t know where to begin, Gatsby would be a solid jumping-off point.
Frequently Asked Questions
What is real estate syndication?
Real estate syndication is a method of raising capital to fund a real estate purchase. Specifically, a real estate syndication deal raises funds offering multiple investors the chance to buy equity in a particular property. If you don’t have the capital to buy an investment property on your own, you can invest with a syndication company alongside other investors to own the property together.
Are real estate syndication deals safe?
The short answer to the question “Are real estate syndication deals safe?” is no, they are not. Investing always involves risk. No investment is ever “safe” or “guaranteed” not to lose money. Real estate syndication deals allow investors to minimize risk by raising capital from multiple investors. However, any capital investors committed to a syndication deal is always at risk of loss if the investment doesn’t perform as expected.
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