19% Yields in Real Estate?

By Matthew Milner, on Wednesday, November 26, 2014

Imagine owning a luxury hotel, just blocks from the Freedom Tower in downtown New York City.

Or owning high-end luxury condos in Midtown East, right near the United Nations.

Imagine the joy you’d feel in owning a piece of Manhattan…

And the pleasure you’d get by earning double-digit yields.

Nice fantasy, isn’t it?

Well, today we’re going to show you how you can stop imagining…

And start investing.

Why Commercial Real Estate… and Why NYC

Commercial Real Estate (CRE) has long been an investment staple for the largest investors in the country…

Pension plans and university endowments keep a substantial portion of their assets in Commercial Real Estate.

Yale University, for example, keeps more than 20% of its assets in CRE…

And their Chief Investment Officer recommends that all investors, including individuals like you, do the same.

Commercial real estate won’t earn you Google-like returns (the search engine giant’s earliest investors made more than 3,000%)…

But given today’s lackluster bond yields, I don’t think anyone would complain about double-digit annual returns.

Furthermore, real estate in markets like NYC can perform well regardless of market conditions:

Even at the height of the 2008 financial crisis, institutional investors sought out the stability of commercial real estate. This “flight to quality” helps support prices.

Historically, however, it was expensive and difficult to access these types of deals:

Investment minimums were generally in the millions or even tens of millions of dollars.

But now everything’s changed …

Crowdfunded Real Estate

Thanks to a recent innovation called Real Estate Crowdfunding, now you can get access to income-producing CRE at lower investment minimums.

The way it works is that many people like you each contribute a small amount – sometimes as little as $1,000 – to invest in a specific piece of real estate.

These transactions take place on specialized websites known as “real estate crowdfunding platforms.”

By showcasing deals to individual investors, these platforms allow real estate developers to raise money – and allow individuals like you to participate in this attractive asset class.

This new innovation offers advantages over traditional real estate investments…

For example:

  • Actual real estate – It’s expensive to put down payments on multiple properties, and it’s time consuming to manage.
  • Publicly Traded REITs – Real Estate Investment Trusts allow you to buy shares of real estate portfolios through a stock exchange like the NYSE. This lets you own multiple properties with a small amount of capital – but if the market drops, so might the value of your REIT. Furthermore, since you’re getting access to properties through a middleman, yields tend to be lower.
  • Non-Traded REITs – With this option, you can own a portfolio of real estate without committing a large amount of capital, and the investment doesn’t trade with the market. But the fees to access these types of investments are extremely high – in some cases, 12% to 15%.

Given its unique aspects, real estate crowdfunding offers an attractive alternative to each of these.


One of the most successful real estate platforms is called Prodigy Network.

To date, they’ve raised more than $300 million from about 6,200 investors.

Prodigy realized how hotels and “extended stay” apartments in New York offered predictable, attractive cash flow, so that’s where they’re focusing right now.

Here are two of their current projects:

AKA Wall Street

A 19-story luxury “extended-stay” condo in the Financial District.

Currently under construction, it’s raising $40 million.

The estimated hold period 1 to 2 years.

Estimated annualized returns are 16% to 19%.

17 John

An existing 15-story building, one block away from the new World Trade Center.

Prodigy is raising $10 million for this project.

The estimated hold period is 3 to 5 years.

Estimated annual returns are 16% to 19%.

The Fine Print


Here are a few details:

  • The minimum investment is $10,000
  • Prodigy’s fees depend on the project, so review each offering carefully
  • Your investment is secured by the real estate you’re investing in

Please note: Crowdability has no relationship with Prodigy. We’re an independent provider of information and research on the private equity markets.

Best Regards,
Matthew Milner
Matthew Milner


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Tags: Real Estate Crowdfunding REITs Prodigy Network

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