Eastview Capital is a relatively new entrant into the investment crowdfunding landscape, though CEO Daniel Drew was previously CEO at now-shuttered First Real Fund. Drew says that his experience at First Real Fund (and before that with iFunding) taught him the importance of working with a broker-dealer, and Eastview has partnered with North Capital Private Securities to provide broker-dealer services for their offerings.
Types of investments Eastview Capital offers
Eastview Capital currently offers multifamily and office investments, though intends to offer other categories of commercial real estate as well, such as industrial and hotel. They offer a range of investment types across the capital stack, from senior debt to full joint-venture equity. Eastview Capital is only open to accredited investors, and the the minimum investment is $5,000.
What do you get when investing with Eastview Capital?
When you invest through Eastview Capital, as with many crowdfunding investment platforms, what you actually receive is a membership interest in an LLC created specifically for the investment. The LLC in turn is what actually holds the equity, preferred equity, or debt interest in the property. For each investment you make with Eastview Capital, you’ll receive a separate K1 at tax time to report your share of the income received by the LLC.
How does Eastview Capital make money?
The fees on Eastview Capital vary slightly depending on the type of deal. For debt investments, Eastview Capital typically charges an origination fee of 1-2% of the amount raised. For equity investments, Eastview’s fee is usually 2-3%.
Eastview may also charge other fees (such as servicing fees or success fees), which are earned as a “spread” between what the sponsor/borrower pays and what investors receive. Details vary by investment, but those additional fees could range from 0-3%, so investors should be sure to review the individual offering documents before investing to be sure they understand the fee details for that offering.
Potential returns and cashflow
The projected return varies based on the type of investment (for example, debt investments offer lower returns but also lower risk as compared with equity or preferred equity), but investors should expect yields in the 8-15% range, with the potential for additional upside on equity deals when the property is sold or refinanced.
As with many real estate investments, investors typically receive some form of regular cashflow, such as from interest payments or rental income. The amount and frequency will vary depending on the particular investment, though are usually quarterly.
Breadth of offerings on Eastview Capital
Eastview Capital takes a more curatorial approach than some other real estate investment crowdfunding platforms, which essentially serve as marketplaces connecting sponsors to investors. While it’s welcome to see Eastview promote the quality of the sponsors they work with, unfortunately in practice that also means a relatively small number of available offerings at any given time.
Eastview also lists their primary selection criteria on their website.
Regulatory framework and due diligence expectations
Eastview Capital has a contractual affiliation with North Capital Private Securities, a Broker-Dealer registered with the SEC (you can see their entry in FINRA’s Broker Check service here). That means that when you invest with Eastview Capital, the security you are technically purchasing is via North Capital. Broker-dealers are subject to specific due-diligence requirements to ensure an investment is “suitable” for their registered customers, or they can face fines and civil action. (That does not of course provide any guarantees about investment return or performance!)
So while a broker-dealer platform (or one that has a contractual affiliation with the one, the way Eastview Capital works with North Capital) will typically disclaim that they do not offer formal financial advice (even though they are entitled to), you can still expect that the investments they offer have been thoroughly screened, including thing like criminal background checks on key executives and a detailed review of financial statements. You should of course do your own due diligence (including research outside of what you find on the platform.) There’s more about broker-dealers and other platform types over on our blog.
Eastview Capital emphasizes their role in curating and selecting investments and the quality of their sponsors. While that should not be a substitute for your own due diligence before making any investment, it is a different approach than some other platforms offering similar investments, and which function more like marketplaces.