
Show HN: Buy Partial Real Estate with Credit Card - soheil
Founder of AlphaCap [1] here, we built a simple tool that allows anyone to buy real estate and immediately start receiving monthly rental income. We encountered a problem in the form of an endless wall of paperwork when trying to buy real estate for investment purposes. Real estate industry is still pretty outdated, there are still real estate agents who charge 3% to represent the seller and another 3% to represent the buyer, there are technology platforms like Redfin that are trying to tackle that particular challenge by charging 1% and hiring a salaried employee to represent the buyer&#x2F;seller. However, buying a percentage ownership in a property still remains a difficult problem. We strive to build a platform to connect interested buyers&#x2F;investors with each other to raise enough capital to purchase a property together. This way if a property is a great investment, but you don&#x27;t have enough money to cover the full purchase price you can use our platform to buy a percentage of that property and allow others to invest in the remaining equity. You will then receive your share of the rental income + appreciation on your equity ownership over time.
I want to thank everyone in advance for providing feedback and looking forward to hearing your thoughts and any concerns.<p>[1] https:&#x2F;&#x2F;alphacap.ai
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al2o3cr
Some questions on a quick read:

* your T&C omits the name of the jurisdiction it's claiming the prevailing law in:
    
    
        ...in accordance with and subject to, prevailing law of . Any use...
    

* what ownership structure do you use for holding these properties? Who specifically holds the deed? Your FAQ mentions "we don't necessarily own the properties" in response to a question about Landa

* what are the requirements for investors? Generally you either have to do a LOT of SEC disclosure, or only allow "accredited investors" with specific net worth.

* what credit card processor are you using? In my experience, "investments" are on a lot of processors' Prohibited Product Lists due to the above disclosure issue

* the answer to the last question in your FAQ about "what happens if the place doesn't rent" is non-responsive; sure you're going to TRY to rent the property, but what happens if you can't?

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jetti
I would suggest re-working your website. There are sections that are hidden
due to color choices. It took me awhile to realize that there was even a login
button on the page. Also, I'm confused on what the map of the US with various
colors is for, it is just there.

I think it is irresponsible of you not to disclose the risk involved in this
to potential users. You even make comments such as:

"How likely is it for the property to appreciate over time?

While appreciation it is not guaranteed but there is a high likelihood that
real estate appreciates over time assuming a minimum investment duration of 5
years."

There are a lot of factors that go into whether or not a property will
appreciate over time and you don't list any of those or give any sort of
details. You are letting people pick their own property in areas that you,
presumably, have no knowledge of market conditions but yet you are saying that
it is highly likely that people will gain appreciation in their property.

In the FAQ you also state:

"Would you say this is similar to Landa?

The difference is we allow individual users to invest together in a property,
we don't necessarily own the properties instead we facilitate the investment
process."

What conditions do you own the properties? What part of the investment process
do you facilitate? On your landing page you state:

" Invest With Others

AlphaCap allows anyone to buy equity in any real estate property that is on
sale, once 100% of the purchase price is funded we purchase the property on
your behalf and manage the property and start sending you monthly rental
income. "

It says you purchase the property on the customer's behalf but who is the
property registered to? Is it your company until all the money is repaid? Is
it all of the people investing in the property?

You also state in your FAQ as one of the benefits:

" Best part is you can use other people's money as leverage to buy much more
property, and if the deal makes sense at the time of purchase/deal analysis,
you won't be over-leveraged and will stand to make money, with multiple exits
as options."

First off, I find this irresponsible by suggesting people take on large amount
of risk while not even mentioning the amount of risk that they could be taking
on. And what does it mean: "if the deal makes sense at the time of purchase"?
Make sense to who? Speaking of risk, there is not a single spot on your
landing page or your FAQ that even has the word "risk".

Lower in your FAQ you state:

"What happens in case of a massive destruction by the tenant?

There is insurance on the property and there is deposit required for tenants.
As part of the management process we also vet tenants before they move in. For
any damages we will deduct the cost from the tenant's deposit."

So are you also a property management company? If so, are people who buy
partial real estate through your site bound to use you as the property
management company or could they go and pick another management company if
they want.

"What happens is a property is bought, but you can't rent it? Who pays the
bill of the empty place?

Typically we have a vacancy rate of less 10%, we do our best to rent the
property as quickly as possible to the most qualified tenant."

You don't even answer the question. Who is responsible? What does "as quickly
as possible" mean in this situation? To me, it sounds like you would drop
below market rates to fill a vacancy.

Something that isn't covered in your FAQ is maintenance. Who is in charge of
that? If a plumber is needed do I have to pay for that?

I realize I may be coming off as harsh or abrasive and for that I'm truly
sorry but as your site stands it seems to be made to take advantage of those
with minimal real estate knowledge hoping to invest their money. You don't
have mention how you make money, you don't mention that there is risk and it
seems like you contradict yourself in many areas on the site.

