In an industry often criticized for its exclusivity and opacity, the recent moves by New York-based start-up FundRebel bring a refreshing change. The CEO Mark Drachman, is a Miami Beach native with over two decades of experience in real estate. FundRebel offers everyday investors access to high-quality real estate investments in South Florida. Using the opportunities provided by Regulation A+, the company has broken the traditional barriers that confined lucrative property investments to high-net-worth individuals.
As FundRebel gears up to finalize its acquisition of Nine Hollywood, a 12-story apartment building with 204 units and 7,000 square feet of ground-floor retail, the local buzz indicates that South Floridians are keen to be a part of this new, inclusive investment landscape.
FundRebel's Entry into Hollywood, Florida
FundRebel is making an impact in the local scene with the acquisition of Nine Hollywood, the 204-unit multifamily project located at 1809 Jackson Street. The complex, currently under construction, is anticipated to complete later this year and offers a mix of studios, one- and two-bedroom apartments. The asking rents range between $1,880 to $3,600 a month.
According to Mark Drachman, Nine Hollywood was chosen due to its alignment with the city’s favorable demographics and its potential for immediate cash flow once the construction is complete. "We see Hollywood as an ideal entry point for our investment strategy," Drachman explained. "The area’s demographics, coupled with the property's potential for steady income, make it a win-win situation for our investors and us."
Small Investors Have New Opportunities with Regulation A+
The cornerstone of FundRebel’s strategy lies in its utilization of Regulation A+. This regulation allows the company to market high-quality real estate investments to non-accredited investors, breaking down barriers that previously kept small investors out of the loop.
In addition, FundRebel’s business model focuses on transparency, technological sophistication, and unprecedented liquidity. The firm is raising capital through a real estate investment trust (REIT) fund with a minimum investment requirement of $1,000. The company has set a goal to raise $75 million in capital for this purpose.
A unique aspect is the liquidity of the investment. Unlike traditional real estate investment structures where limited partners often find themselves tethered until a capital event occurs, FundRebel has designed its funds to be freely tradable after 12 months. This liquidity enables any shareholder above 18 to sell or transfer their shares at their discretion.
FundRebel's REIT operates without management or advisory fees, aligning the company’s interests directly with those of its investors. Instead, they make their profits through a 30% management fee, commonly known as a "promote."
A Shift in Real Estate Investing in South Florida
For South Floridians, the arrival of FundRebel represents the democratization of investment opportunities that were previously restricted to an elite few. By using Regulation A+ and offering freely tradable shares, the company invites local investors to share in the financial benefits that real estate can offer, such as quarterly distributions, regardless of their investment size.
Drachman states, "We want our shareholders to feel like genuine stakeholders in the properties, benefiting from the same investment structures that have been available to wealthy individuals, family offices, and institutional investors for years."
A Look at the Real Estate Market from New York to South Florida
Mark Drachman, the dynamic force behind FundRebel, has a career that spans more than 20 years. Focusing primarily on hospitality, multifamily properties, and ground-up condominium development, Mark moved from his native Miami Beach to New York in 2001. While attending Touro College and majoring in Finance, he commenced his career as a commercial real estate broker.
In 2005, Mark founded Delmark Realty LLC, further honing his skills by brokering transactions and managing salespeople across all realms of residential and commercial real estate in the Big Apple. In 2012, he took another entrepreneurial leap by founding Kings Highway Development LLC, focusing on purchasing distressed small to mid-size assets, strategically renovating them, and repositioning them in the market for better value.