Republic and Dallas‑based Nada Launch Real Estate Index Investing » Dallas Innovates

August 6, 2021 Beth McCandry

John Green, Co-Founder and CEO of Nada and Jesse Stein, Head of Real Estate at Republic [Photos: Nada, Republic]

Anyone looking to invest in real estate can do so now – in Dallas, Austin and Miami – through a new investment product from Republic and Nada.

Called Cityfunds, the launch combines the best of both companies.

New York-based Republic is an investment platform that enables early stage startups to raise up to $ 1.07 million from everyone – friends, family, fans, etc. – through crowdfunding. It puts power in the hands of the public and allows them to invest in the future they believe in.

Nada is a Dallas-based digital real estate startup offering an alternative solution to the traditional commission structure of home sales. The vertically integrated platform democratizes real estate wealth and completely transforms a real estate transaction into a full homeowner-service relationship.

Cityfunds marries the two. The index-like investment provides targeted exposure to a city’s real estate market through a portfolio of residential real estate assets – meaning investment opportunities are accessible as regulatory crowdfunding offerings hosted on Republic. Similar to trading public stocks, Republic and Nada aim to enable trading of interests on a secondary marketplace.

Cityfunds are managed through a joint venture between Republic Real Estate and Nada.

“The Republic’s latest real estate investment opportunity offers investors the opportunity to invest directly in some of the most dynamic real estate markets in the country,” said Jesse Stein, director of real estate at Republic, in a press release. “Although real estate investments have so far only been an option for accredited investors, we are confident that our new approach – transparent, inexpensive and available to everyone – will bring the world’s largest asset class to all investors.”

How it works

Think of Cityfunds as a way to own a piece of a city you love.

Each city fund only invests in single-family residential properties in a single city. The model pursues two approaches: the acquisition of single-family houses and partial investments in private homes.

The latter approach will use Nada’s newly launched homeshares product, which provides a way to exchange fractions of your home equity for cash.

Like pensions and savings, Nada believes home equity is earned. Home ownership is used to free up earned equity – by exchanging it for cash without debt – to make home ownership more flexible. It doesn’t require monthly payments, and the unlocked equity funds can be used to pay off debts, renovate, invest, and more.

This gives homeowners liquidity and diversification, while at the same time freeing up inventory for investors interested in high-demand property markets with potentially limited housing supply.

All of Cityfund’s investment activities will be accessible through Nada’s portfolio manager app. This includes tracking acquisitions, real estate-level information, and updates to valuation estimates.

“Homeowners are massively exposed to an illiquid asset – their home – while individual investors cannot get exposure to real estate due to low inventory and the lack of funds required to compete with institutional investors,” John Green, Co-Founder and CEO of Nada, said. “The Nada homeshares product in combination with Cityfunds solves both problems and brings liquidity for homeowners and access to real estate for all investors.”

I’m looking forward to

Cityfunds debuted in Dallas, Austin and Miami on Aug. 4, but the Republic and Nada teams already have plans to grow across the country and eventually overseas.

The first three funds are already showing activity, according to Nada co-founder and CEO John Green. In about 24 hours, “We have $ 37,000 in Austin, $ 25,000 in Dallas, and $ 20,000 in Miami,” he told Dallas Innovates via email. Green invites competing Dallasites to take a look at the fund.

The companies said Cityfunds was inspired by “the successful transformation from actively managed mutual funds to passively managed index-based exchange traded funds (ETFs)”. ETFs allow investors to make more targeted decisions in a particular area, market, or risk profile.

They hope that investors using Cityfunds will generate returns from rental income and property price increases.

Nada and republic go back

The locally based Nada ran a campaign for Republic in June 2020 and reached 100 percent of its donation goal in just under a week. The following year, Nada raised $ 1.8 million from 4,000 public equity investors to Republic.

According to Kingscrowd, this is the fourth highest public equity raise for a real estate company since it started pursuing regulatory crowdfunding deals in 2017.

Nada recently completed a $ 2.5 million seed round from Global Millennial Capital, bringing the total capital to more than $ 3 million.

Republic brought its city program to Dallas last year to launch in high-growth, emerging cities that are working to create a level playing field for entrepreneurs. Republic Cities Dallas aims to connect with the local startup community while highlighting the companies that are building on Republic.

Quincy Preston contributed to this report.

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