- Jilliene Helman is the CEO of real estate investing and crowdfunding platform RealtyMogul.
- Helman outlines five high-growth markets and two contrarian picks to watch in a high inflation environment.
- She also explains why investors shouldn’t gamble with table money when it comes to real estate.
As US inflation hits a nearly 40-year high, real estate, which has always been touted as a hedge against high inflation, is again front and center for investors.
But it’s always been on Jilliene Helman’s mind. As the child of parents and grandparents working in various subsectors of the real estate industry, she grew up talking about property values ββat the dinner table. Later, as Helman went to work in the wealth management industry, she couldn’t help but notice the general theme that all of her wealthiest clients were real estate investors.
“Either they made their money in real estate or they kept their money and avoided things like inflation with real estate,” Helman, RealtyMogul’s chief executive, said in an interview. “And it was really that idea that led me to quit my day job and become an entrepreneur.”
Today, RealtyMogul, a real estate investment and crowdfunding platform, has been used by investors to invest more than $800 million in capital in more than $4 billion in real estate transactions, according to the company.
Why and how to start with $5,000
The digital platform offers investors two main ways to access real estate transactions: (1) invest in specific properties, including apartments, office buildings, shopping centers, industrial warehouses or even development offers of basis; (2) gain exposure to the company’s diversified portfolio of properties through its two unlisted real estate investment trusts.
Due to their legal structure, the firm’s individual real estate investment opportunities are restricted to qualified investors who contribute a minimum between $25,000 and $35,000. Her apartment growth
REITs
and income REITs are open to all investors, with a minimum requirement of $5,000.
The $5,000 minimum for REITs is at the higher end of the spectrum among similar real estate investment platforms. For example, Fundrise allows investors to acquire shares of properties with as little as $10 with the aim of attracting young, entry-level investors interested in stable, long-term investments.
In Helman’s view, the highest requirement is to illustrate his investment philosophy that real estate investments are long-term games that can often be illiquid and risky in the short term.
“We don’t want people investing with table money,” she said. “For investors who don’t have $5,000 to invest, they probably aren’t the right investors to invest in a completely illiquid asset class.”
5 Markets That Could See Double-Digit Growth in 2022
Ultra-low interest rates and the departure of overcrowded cities due to the pandemic fueled a scorching housing market where prices rose sharply amid low inventory.
With the
Federal Reserve
After three rate hikes this year to contain inflation, US mortgage rates hit their highest level since March 2020. The average rate for a 30-year loan was 3.45%, down from 3.22% it a week ago.
Housing experts, including Ivy Zelman who called the housing bubble in the 2000s, have warned that the market is vulnerable and prices could fall sooner than expected.
While there are risks and uncertainties, Helman believes that “not all markets are created equal” and “nor are supply and demand in all markets created equal.” For the year ahead, it sees high-growth markets where the combination of strong demand, weak supply and rapid job gains could lead to double-digit growth.
Take Austin, TX, for example. Companies from Tesla to Google are on a hiring spree there for high earners who earn between $200,000 and $1 million a year. With a limited supply of homes and strong demand, significant price increases for single-family, multi-family and commercial properties are inevitable, Helman said.
San Diego is another market on its list. The city, which is experiencing a tight vacancy rate of 3%, has seen a surge in venture capital investment in the life sciences. It is building a life sciences center through the IQHQ development project, which aims to build the largest urban commercial waterfront along the California coast.
Helman also likes Miami and Tampa, Florida, both of which have seen a growing number of jobs in technology and finance. She is keeping a close eye on Water Street Tampa, a $3.5 billion development jointly funded by billionaire Bill Gates and Tampa Bay Lightning owner Jeff Vinik.
Nashville is also on its radar for its $84 billion-a-year healthcare economy and relatively affordable price, Helman said.
“When we think about new work-from-home trends, I think there’s a big appeal for tech marketplaces that are affordable for tech workers who aren’t limited by geography,” she said. declared. “So we’re excited about Nashville.”
In addition to high-growth markets, Helman is betting on the return of New York City and the San Francisco Bay Area. Despite the exodus of workers from both cities in the age of the pandemic, the impact of the existing technological and financial footprint in these two geographies should not be underestimated, she said.
For example, Google said in September it planned to buy a New York office building for $2.1 billion even as many of its employees still work remotely. Meanwhile, the biggest tech companies from Meta and Twitter to Apple and Airbnb remain in Silicon Valley.
“New York is so established and it’s a similar story in the Bay Area,” she said. “We expect that over time they will bounce back to pre-pandemic levels and beyond. It’s going to take a while, but we don’t think these are markets to delist.”
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