Getting Started
First steps to get started
How do I get started?
- Download the Landa app from the Play Store or App Store.
- Create an account and apply to be an investor.
- Connect your bank account.
- Deposit funds into your account. It can take 2-5 business days for the transaction to settle. Any processed orders will remain pending until deposited funds settle in your Landa account.
- Browse properties and start investing.
See also:How do I join the Landa communities
What happens when my order is accepted?
Once your order is accepted, the funds used to purchase the shares are transferred from your Landa account into the bank account of the series LLC of the property. You will be issued your shares electronically.
Look out for an email that confirms the details of your transaction, including the LLC name, the property, the date, the number of shares purchased, and the total purchase price for your shares. You'll be able to access information about your total share ownership at any time in the Landa app.
How It Works
Property labels
Here are some quick descriptions and definitions of the various property labels you will find in the app.
Offering status labels
New
When you see the "New" label, it means that the property has just arrived on the app. The property is in its initial offering stage, where investors can purchase shares from the new series until all of the shares on offer have sold.
Waiting for Trading
Once the initial series of shares have all sold, the property will usually display the "Waiting for Trading" label. At this stage, investors can place buy and sell orders, but they will remain pending until the Landa team finalizes the process to transition the property into the Landa trading mode. For most properties, this stage will take between 48-72 hours.
Trading
The trading label means that the property is currently and actively trading on the Landa platform. Meaning you can buy or sell any available property shares on the Landa marketplace.
Property Type lables
SFR
Single Family Residence. This is typically a stand-alone single-family property that doesn’t share a mutual wall with any other property. Usually, it is fully surrounded by a garden, driveway, or private space.
TH
Townhouse. These properties are also single-family residences but are connected to and share at least one wall with their neighboring unit.
MFR
Multi-Family Residence. This can be a single building or a collection of buildings under common ownership. These are multi-family properties, like apartments or condos, for example.
How is the price per share calculated?
Initial Share Pricing for IPO Properties: The initial price per share for IPO properties (properties in primary) is determined by dividing the maximum offering amount by the total number of shares available in the initial offering. For instance, if there are 10,000 shares in the initial series offering, the price per share is calculated accordingly.
Post-Offering Share Pricing: After the new offering is sold, the share price is set to the lowest sell offer price currently available. This price fluctuates based on the selling orders available and may not accurately represent the true value of the property's shares.
Example of Share Pricing: Consider a scenario where 100 shares of Series 123 Main Street are offered at varying prices:
- 20 shares at $3 per share
- 40 shares at $5 per share
- 30 shares at $8 per share
- 10 shares at $15 per share
In this case, the share price is determined based on the lowest-priced shares, resulting in a displayed price of $3.00 per share.
Understanding Historical Price Per Share: When reviewing the historical price per share of a property in the secondary market, it is important to note that the charts reflect the price per share of the most recent transaction as recorded at the end of the trading day.
How does Landa work?
Experience the Excitement of Revolutionary Property Investment with Landa
Unleash your investment potential with the groundbreaking Landa app. Our platform reshapes the landscape of property investment, making it more accessible, dynamic, and exhilarating than ever before.
Discover Outstanding Properties
Dive into our thrilling collection of superior rental properties on the Landa app. We've redefined property investment, handling all aspects of purchasing, leasing, and managing these assets, inviting you to join this investment revolution.
Own Shares in an LLC
Embrace this game-changing opportunity to diversify your investment portfolio. Each of our LLCs owns a rental property, either directly or indirectly. We've broken down these properties into initial offerings (such as 10,000 shares), paving the way for your revolutionary investment experience.
Reap Rental Income
Enjoy the thrill of monthly distributions from your investment portfolio, aligned with each property's rental income and operating expenses. Experience the benefits of property investment with an exciting, hassle-free approach.
Sell with Freedom
Experience the thrill of trading on your terms. Once all initial shares of a property series are sold, you have the freedom to sell your shares whenever you wish. It's a novel, thrilling way to manage your property investment portfolio.
For a comprehensive understanding of your selling rights, and other important disclosures and legal documents related to trading with Landa, please visit our Legal Page.
Join the Revolution in Property Investment with Landa
Experience a new era of financial opportunities with Landa - the revolutionary property investment platform. Embark on this exhilarating investment journey with us today.
How does buying and selling shares work?
What am I buying, exactly?
When you invest, you are buying a share (or multiple shares) of a limited liability company (“LLC”) that owns a single rental property.Each share gives you the right to your partial (“pro rata”) profit earned by the LLC. For an LLC that is offered at 10,000 shares, each share you buy will provide you the right to earn a fraction (0.01%, to be exact) of the profits of that LLC.
What about selling?
After all the original series shares of a property are sold, you can offer your shares for sale and allow other investors to buy them from you. Keep in mind that while you can place a sell order at any time, you will not be matched until the original series shares have all sold.
When you choose to sell your shares, you can add market orders or limit orders.
It's also important to note that we can’t guarantee that a secondary market will be available. You must be prepared to hold your shares indefinitely.
For more information you can review the legal documents and disclosures on our legal page.
About Landa
What is Landa
Landa is a real estate investing app that allows anyone to become an investor from their phone. We buy homes, rent them out, and provide a way for anyone to invest in these rental properties from our app.
We do all of the hard work, so you can sit back and earn income — on a platform that’s intuitive, accessible, and transparent.
Who can invest?
Anyone who is over the age of 18 and a US resident (with an SSN) can invest with Landa. Please note that the platform is currently unavailable in Puerto Rico.
You can read more about Landa here
Landa’s HQ is located at:
6 W. 18th Street
New York, NY 10011
Who can invest?
Anyone US resident (with an SSN) over the age of 18 can invest with Landa. Note: the app is not currently available to non-US residents or residents of Puerto Rico.
The Landa communities
Now we're talking. If you want to connect with the new age of real estate investors, where people talk the talk and help design the future of Landa, join us here -
Who manages the properties?
Landa has an expert team of industry professionals who manage our properties, from screening and acquiring properties to addressing maintenance requests and collecting rent. Our onsite teams ensure that tenants' needs are met, as well as provide help to those who fall on tough times, and ensure that Landa’s properties stay in tip-top shape.
Their efforts are supported by our tech-first approach to automated leasing through Landa’s own Resident App found on the Play Store and App Store. The app automates the leasing process through effective tenant application processing, contracting, funding (including deposits & payments), notifications & reminders, and maintenance request management. This helps cut costs and streamline our processes, delivering value back to our investors.
What happens if Landa goes out of business?
When you invest in properties on the app, we want to make sure that no matter the state of Landa, your investment remains separate from such a situation. This is a key principle of our operation.
When you purchase shares in the app, the debts and liabilities in your Series will be separate from the debts and liabilities of the series’s parent company. We take several steps to make sure that each Series operates as its entity:
- Each Series holds title to a property and does not share title with another Series or its parent company.
- Each series maintains its books and records.
- Each series maintains its bank account and does not hold money for any other Series.
- Each Series has its mortgage (no cross-collateralization).
- Each Series guarantees zero debts of another Series.
- Each Series has its insurance policy (not part of an umbrella policy).
In our parent company debt agreement, we (Landa Holdings, Inc.) and the lender signed that the Series LLCs are not collateral for the debt that we (Landa Holdings, Inc.) take on, therefore the properties in the app are not collateral for our (Landa Holdings. Inc.) day-to-day business operations.
In the event of a bankruptcy - the bankruptcy is managed by the bankruptcy court and we can’t guarantee the outcome. As with any other investment, there is always a risk of losing your investment. We are not aware of any court case that has tested the limitations of the series structure in federal bankruptcy courts, and it is possible that a bankruptcy court could determine that the assets of one Series should be applied to meet the liabilities of the other Series or the liabilities of our company generally. This concern is very important to us. Furthermore, for the full risk factors list, you can review our SEC filings here .
Who owns the properties?
Landa creates a separate series LLC to own each property. This entity holds the title of the property, and the mortgage is under its name as well. By purchasing shares in the series, you won’t have any direct ownership of the property, and your name will not appear on any of the property’s documents.
However, by purchasing or owning shares in the series, you will receive any associated monthly dividend payments, be updated about the property, and receive annual tax documents summarizing any investment returns for the shares you own.
See also: What tax documents do you provide
Which markets can invest in through Landa?
We currently have properties available in 7 US markets: Georgia, New York, Jacksonville, Orlando, Tampa, Charlotte and Birmingham.
Bank And Transfers
Banking Connections
How do I connect my bank account?
You can connect your bank account one of two ways.
With Bank Login
- Click the bottom right icon to access your profile in the app
- Select Connect with Bank Login
- Locate your bank on the list
- Enter your credentials
If your bank isn’t on the list, you can still connect your bank account with your account and routing numbers.
Below the search bar, you will see, "Don't see your bank?" Click the link and you’ll see these instructions for manual connection
Manual bank connection
- Enter your account info
- Receive two small deposits
- Return to verify amounts once the deposits arrive in your account
The app will then walk you through adding your name, selecting a checking or savings account, and adding your routing and account numbers. The app will then send two small deposits using the information provided. These typically take 1-2 business days to show up in your bank account. Once they do, head back to the app to verify the amounts and finalize connecting your bank.
Your bank account is now connected!
How do I change my bank account
As a heads up, you will need to verify that it's you who is doing this. The app should take you through this and you should be able to Please note the bank change will not be instant and can take up to several days to process. If you need to make the change, please follow these steps:
- Open the My Profile section in the app
- Under your profile in the app, select Manage Bank Account
- Select "Remove this bank"
Your current bank or financial institution will now be disconnected.
You can add your new account by selecting "Add Bank" Account under your profile in the app.
Can I have more than one bank account connected?
For now, we only allow one bank account connected to the app at a time.
Deposits and withdrawals
How do I deposit money?
- Click the bottom right icon (this is your profile)
- Click Transfer Funds
- Select the Deposit Funds button
- Enter the amount you want to deposit
- Click Confirm
After 2-5 business days, your funds will settle into your Landa account.How do I withdraw money?
- Click the bottom right icon (this is your profile)
- Click Transfer Funds
- Select the Withdraw Funds button
- Enter the amount you want to withdraw
- Click Confirm
After 2-5 business days, your funds will appear in your bank account.I can’t deposit or withdraw moneyIf you’re having trouble withdrawing funds, you may be missing a verification document or important banking information. Please contact us at hi@landa.app or through the in-app chat.How long does it take for deposits and withdrawals to settle?It can take up to 2-5 business days for your funds to settle into your Landa balance or bank account.Instant DepositsLanda offers standard deposits/withdrawals to your account, in addition to instant deposits- same-day bank transfers (ACH) for deposit/withdrawals.Standard deposits are free and arrive within 2-5 business days.Instant deposits are subject to a $1.99 processing fee. Instant deposits/withdrawals submitted before 12 pm EST are settled the same day; transactions submitted after 12 pm EST will settle on the following day.What does “insufficient funds” mean?If you’re getting a message saying you have insufficient funds, it means you are attempting to spend more than what is available in your Landa account. This could mean a recent deposit has not settled yet, or you need to deposit more funds into your account before making the purchase.Recurring DepositsOur Recurring Deposits feature allows you to schedule automatic payments from your bank account into your Landa account.You can customize the payments by choosing your preferred deposit amount, frequency, and deposit day.You can only have one deposit plan at a time. If you want to make changes to your Recurring Deposits, simply cancel the existing plan and create a new one.After activating Recurring Deposits, you can still make additional regular deposits with the same payment method.
Limitations on Transactions
Is there a maximum amount that I can invest?
The maximum number of shares you can buy through a personal account in an individual property (Series) is limited to 10% of the greater of your annual income or net worth.
There is no limit of on the number of shares an Entity (corporate, LLC, trust) account may buy in an individual property (Series).
What is the minimum deposit/withdrawal amount?
The minimum transfer amount is $1.00.
What is the deposit limit?
The maximum amount you can deposit into your Landa account is $100,000.00 weekly.* The minimum amount you can deposit per deposit is $1.00.
What is the withdrawal limit?
You can withdraw up to $100,000.00 per week.* The minimum withdrawal amount you can make is $1.00.
*There is a total limit of $100,000.00 in transactions per week. This amount includes both deposits and withdrawals cumulatively. So, if you deposit 100,000 this week, you will have to wait until next week before you can withdraw anything.
When can I withdraw my funds?
If you are a new user, you will need to wait 60 days before you can withdraw any deposits made. After that time, you will be able to withdraw as you please.
My Account
Security
How You're Protected
There are several ways we work to keep your Landa account safe.
Cash held in your Landa Account, which is a custodian account in Evolve Bank, maintained by Synapse.
Landa’s Security Measures
The Landa Security Team uses many high-level measures to protect your account, ensuring your experience with us is safe and secure.
Sensitive, personal, and otherwise identifying details, such as your social security number, are secured using military-grade AES SHA256 HMAC encryption during transit and at rest.
Our applications securely communicate with our servers using the Transport Layer Security (TLS 1.2) protocol with best-practice configurations and ciphers.
We never have access to your bank login credentials, and we will never have ask for them.
Identifying Scams
Beyond the protections we apply to every Landa account, here are some tips for identifying scams.Phishing
Scammers may target you to obtain sensitive information, such as your account information or Social Security number. This is commonly referred to as phishing. Phishing attacks often start with an email, phone call, or text message by someone pretending to be a credible person or organization. In these messages, you could be directed to enter your personal information on a fake site that looks like a legitimate website, disclose personal information over the phone, or click through an email or text message that may contain a bad link. These tactics can result in your personal information being compromised.
Once a scammer has this information, they can use it to access accounts such as your email, social media accounts, or bank accounts. For you, this can result in identity theft and financial loss.
Identifying Phishing
Keep in mind that phishing websites and links can look very similar to legitimate websites. Someone may pretend to be from Landa or a company you know, and trust and call, email, or text you. Scammers may trick you by claiming they can fix your account problems if you download software, or if you give them your Landa username and associated email, personal information, or information that you use for other platforms. Scammers may even go as far as creating a false sense of urgency so you'll share information that you typically wouldn't.
If you do receive text messages and emails with links, always be cautious about clicking on those links — especially if you don't expect it or recognize the sender. You may receive texts with attractive offers for free money or similar enticing deals. If it sounds too good to be true, it very well may be.
Learn more about how to spot phishing
We recommend looking over this guidance from the FTC to learn how to recognize and avoid phishing scams.
The Landa Team will never do the following:
- - Send you links within text messages
- - Direct you to download remote desktop access software
- - Ask you for your bank login information or any Two-Factor Authentication (2FA) codes you were sent
- - requires you to provide information or credentials regarding your accounts on other trading platforms or services.
- - Requests you to send money through different apps such as CashApp or WhatsApp or via text messages.
Identifying Scams
If you ever suspect your account security has been compromised, contact Landa Support immediately at hi@landa.app.
Deactivate my account
How to Deactivate Your Investor Account in Our App/Web
We deeply value every member of our community. If you're contemplating deactivating your account, please adhere to the guidelines below for a seamless experience.
Key Points to Remember Before Deactivating:
- For those holding shares in IPO properties,you must await their transition to the secondary market. Only once properties are in secondary, can you sell your shares, and proceed wih the deactivation process.
- Investors with shares in Lend must maintain a hold of at least 12 months before redemption is possible. After this duration, you'll need to redeem your shares to initiate the deactivation.
Steps to Deactivate Your Account:
- Sell any and all shares you have within the app.
- Complete the withdrawal of all funds from your Landa account.
- Visit your profile page in the app and proceed with the deactivation process.
Note: Your privacy and the security of your data are of utmost importance to us. While certain data is mandatorily retained for legal compliance, it will be permanently deleted after a span of 6 years.
Beneficiaries
Transfer on Death (TOD) Beneficiaries allow you to specify who will inherit your Landa account assets in the event of your death. These assets will be transferred to your beneficiaries without the need for probate court involvement.
How do I designate TOD beneficiaries?
You can designate TOD beneficiaries in your account settings by visiting the Beneficiaries section. It is recommended to consult with estate, tax, financial, and/or legal advisors when naming beneficiaries. Please note that Landa customers in Louisiana are currently unable to register TOD beneficiaries.
In the event of my death, what should my beneficiaries do?
In the event of your death, your TOD beneficiaries should contact estates@landa.app to transfer your brokerage assets. They may need to provide a government-issued ID and other documents to receive the assets. You can change your beneficiaries at any time by accessing the Beneficiaries section in your Landa app settings.
Can I change my beneficiary designations?
Yes, you can change your beneficiaries at any time. Go to settings in your Landa app and tap Beneficiaries, then “Edit” to add a new beneficiary, change their information, or delete an existing one.
Landa will never contact a beneficiary except in the event of a transfer on death, so your beneficiaries need to be made aware that they have been named and may need to contact Landa if necessary.
Furthermore, if you are married and live or have lived in a community property state, your spouse or domestic partner as your default beneficiary may need to provide permission before naming another individual as your beneficiary.
Who qualifies as a TOD beneficiary?
All TOD beneficiaries must be natural persons who are at least 18 years old and either U.S. Citizens or legally permitted to open a Landa account.
Is it currently possible to adjust the allocation of assets among my beneficiaries?
No, currently your assets will be split evenly among your named beneficiaries to the extent possible. If you have several beneficiaries that cannot be evenly divided by 100%, Landa will round the allocations to whole percentages (e.g. 34%, 33%, 33%).
What assets can a beneficiary receive?
Upon transfer, your Landa account assets are split evenly among your beneficiaries. Beneficiaries can generally receive all assets currently in your account and can transfer assets to their own Landa account. From there, they may hold the assets or sell the shares in the marketplace.
Who can add a beneficiary to their account?
Any account owner who is currently active and not living in Louisiana can add a beneficiary to their account. Transfer on Death (TOD) registrations are not currently available for Landa customers in Louisiana.
What happens to assets in my account if I don't designate a beneficiary?
If you pass away without designating a beneficiary, assets in your account may be subject to probate court or a probate alternative, depending on the value of the account. The probate process will be governed by the laws of your state of residence.
The app can't find my address
Having trouble finding your work or home address while you are setting up your account?Some addresses are so unique that the system cannot find them. Here are some steps to problem solve:
1. Start typing in your address in the search bar. When you see it pop up, select your address from the list.
2. Review your address, and if all looks good, select "Next" to continue to set up your account.
3. If your address seems to be missing your street number, click "Edit Address," and you will be able to type in your address or add in any missing info.
4. When you’re ready, click "Next" and you’ll be asked to review your address once more to make sure everything is good to go.
Dividends
How do I make money through Landa?
Earning with Landa: How It Works
When you invest through Landa, there are two primary avenues for potential earnings:
- Monthly Dividends: Earn passive income from property dividends.
- Selling/Trading Shares: Trade shares in the secondary marketplace.
1. Monthly Dividends
Investing in real estate with Landa isn't just about property ownership. It's about potential earnings through monthly dividend distributions. The dividends you earn depend on the shares you own and are affected by various factors, from unexpected vacancies to changes in rental prices and unplanned expenses.
How do we determine the dividend? It's all about the property's financial dynamics:
- Total Rent Collected: $1,000
- Operating Expenses: $500
- Cash Reserve: $100
- Dividend Amount: $400
For more information about how dividends are calculated read
.
It's important to remember that as more property shares get purchased, dividends get adjusted. This ensures they truly reflect ownership changes.
2. Trading Shares
After the initial shares of a property are sold (10,000 for single-family or 100,000 for multi-family properties), you can trade your shares in our marketplace. The share prices fluctuate based on supply and demand. If you sell your shares at a higher price than you purchased them, you will earn a profit through appreciation. However, it is also possible to sell at a lower price, resulting in a loss. Remember that these aren't listed stocks and that trading and liquidity aren't guaranteed.
Does Landa Ever Sell Properties?
Our primary strategy is long-term property holding, giving investors the freedom to sell shares via the app. In the rare instance a property gets sold, the sale proceeds (after clearing any mortgages and expenses) are distributed among the property's investors. Importantly, Landa doesn't charge fees or take profits from such sales.
Want More Insights?
How Landa calculates dividends
Understanding Landa's Dividend Calculation
Investing in real estate through Landa offers the unique benefit of earning monthly dividend payments. But how do we determine these dividends? Let's break it down.
Property Dividend Calculation
We derive the dividend from the property's net income: the total rent we collect minus any loans, reserves, and other expenses. It's a similar concept to the dividends you'd get from public company stocks.
Dividend Terms and Definitions:
- Fixed Expenses: These are the consistent costs associated with a property and include mortgage interest payment, HOA fees, insurance, management fees...
- Monthly Reserve Balance: Set at 7% of the expected rent, this reserve is a safety net to cover unforeseen expenses or rent collection shortfalls.
- Variable Expenses: These are expenses that aren't consistent month-to-month, essentially any cost that doesn't fall under 'Fixed Expenses'.
- Minimum Property Account Balance: This balance is equivalent to one month's rent, ensuring a buffer for the property's financial health.
Property dividends are capped at 30% of the expected monthly rent. Why? We want to ensure that our properties stay financially robust, covering their expenses without any risk of default. By doing this, we aim to provide investors with steadier monthly dividends over time. However, if a property has a balance significantly above the minimum account balance and meets other criteria (like a strong collection rate and low variable expenses), we reserve the right to increase this cap. This is all in an effort to ensure dividends are calculated in a way that truly represent the property's full potential.
Property Dividend Per Share
The Dividend Per Share is determined by dividing the total property dividend by the number of shares existing for that property at the start of the month. This rate can be dynamic, especially for properties in their IPO phase. As shares are acquired, the Dividend Per Share may change.
Dividend Distribution: The How and Why
Dividend Distribution Mechanism
Dividends paid to investors are based on the settlement date of each transaction. This ensures that the dividends you see in the app accurately mirror the number of shares outstanding in each property, providing a true representation of ownership.
Importance of the Settlement Date
Using the settlement date offers a transparent and precise count of shares because it showcases finalized purchases for each property. This ensures fair treatment for all investors, aligning dividends with ownership stakes.
For instance, if your dividends-per-share are $0.2364 for 15 shares, you'd get a dividend of $3.54. Any fractional cents, like $0.006 in this case, roll over to your next dividend payment. This ensures that no value is lost over time.
Implications for Investors
Remember, if you invest in a property, the displayed dividends in the app are linked to the settlement date of your transaction. This can influence the dividends you get from a property.
Your First Dividend: What to Expect
For your initial dividend, it's prorated based on when you share/s settled. So, if your shares settled mid-month, you'd get half of that month's dividend per share. This proration begins from the order's settlement date.
Understanding Property Tax Payments
In the past, we reserved a specific monthly amount in the dividend breakdown, anticipating future tax payments. But, we've updated our approach. Now, we accumulate these funds in the property account over the year. When it's time, we make a one-time annual payment to the county for the property's annual taxes. So, within the app, you'll now notice these tax payments being made once a year, straight from the property account balance.
When are distributions made?
Dividends (or distributions), when paid, will hit your account on or around the first day of each month and are based on the rent received from the prior month.
For example, in September, we collect the rent and handle the expenses. September dividends will then be distributed around October 1st.
Note: We can’t guarantee that the property you invested in will have enough revenue in a given month to distribute dividends.
What if the property isn't profitable?
In certain cases, properties will not pay dividends since dividends depend on property revenue, expenses, and cash reserves. In the event of a vacancy or a disaster that requires expensive repairs, dividends may not go out. However, occasionally, in cases when the property isn't receiving rent, dividends will be distributed due to high cash reserve. Usually, we will do this if the cash reserve is more than 5X times the expected dividend. For example - if the expected dividend (revenue - income) is $250 for the property and the cash reserve is above $1,250, we may distribute dividends.Major expenses
To cover any unexpected expenses to the property, Landa retains a percentage of the rental income earned on a property each month as cash reserves. If the cash reserves aren’t enough to cover the unexpected expense, we may lower or withhold dividends to cover the expense.
What happens if there is a vacancy?
Vacancies are a part of the real estate market cycle- they happen from time to time. When a rental property becomes vacant, Landa investors might not earn monthly dividends until the property is rented. Landa works hard to shorten any vacancy rate times. Once a property is leased out once more and rent is being paid, dividends resume.
What would happen if one of the properties I invested in had a catastrophic event?
Like traditional real estate investments, Landa will try to rebuild or repair the property, either using reserve funds (mentioned later) or through a loan. If we cannot rebuild or it seems too costly, we will try to liquidate what we can and dissolve the LLC. Investors will be paid out of whatever process is applicable, however, there is no guarantee.
What happens if I buy all the shares of a property?
This is not something we support. We limit the number of shares you can own to 9.99% to ensure everyone has the opportunity to buy shares.
Taxes
Tax Documents for Investors
As an investor, it's important to understand what tax documents you may be eligible to receive and when you can expect to receive them. At the beginning of each calendar year, we provide certain tax documents to our investors, including the 1099-B, 1099-Div, and 1099-Misc. These documents are typically sent out no later than January 31st.
You may be eligible to receive these tax documents if you meet one or both of the following requirements in the previous calendar year:
- Made more than $10 in dividends for any one property
- Sold shares
It's important to note that each investor's tax situation is unique, so it's a good idea to consult with a tax advisor for personalized advice. They can help you understand your tax obligations and ensure that you are in compliance with all relevant laws and regulations.
Is the income I receive from Landa taxable?
Yes, you may need to pay taxes on the income you receive from your investments. This is applicable for individual and entity accounts (LLCs, corporations, and trusts).
Each Landa series LLC is filed as a corporation. As such, if you’re eligible, you will receive a 1099-B, 1099-Div, and 1099-Misc that will hold the tax information for any properties in which you:
1. Earned more than $10 in dividends for any one property in the previous calendar year
2. Bought or sold shares in the previous calendar year
As each investor’s tax situation is different, we always recommend that you consult a tax professional.
What is a 1099
A 1099 form delivers tax information; the amount of money you received throughout the year from selling shares, and the amount of realized losses that violate the IRS wash sale rule. Learn more about 1099 forms here.
When will my 1099 be available?
All 1099 forms are available by January 31st each calendar year.
Trading
Selling my shares
Selling your Shares
Listing Your Shares for Sale:
You can list your shares for sale to other investors on the platform. To do so, navigate to the desired property page in the app (easiest way to do this is through your Portfolio page) and look for the "Trade" button.
You can see any offers to purchase shares for any property in trading, with their various price points and volumes. This information is listed in the order books for each trading property.
How to Price Your Shares
You may set your share price according to your preferences. However, bear in mind:
- Setting a specific price doesn't guarantee a buyer at your price.
- To quicker sales, consider pricing your shares with the current range of available offers.
- If you do not set a price, the system will default to the market price, submitting the highest available buy order price.
Because trading shares are based on investor supply and demand, we can't guarantee that someone will always buy your shares or that trading will always be available.
Viewing Offers
The app provides real-time insights into active offers. You can view:
- Current price points.
- Volume of shares.
All this data is systematically organized in the order books
Trading Constraints and Fees
Be mindful of trading hours and fees:
- Market Hours: Matches are made during specified market hours only.
- Fees: Each trade incurs a 2% fee, affecting both buyers and sellers. The trading fee is charged by our third-party broker-dealer to process trading transactions. We do not retain any portion of the trading fee, and all trading fees will be passed directly to our broker-dealer.
Please review the applicable offering circular for more information. You may obtain a copy of the offering circular here.
What are the trading hours?
Trading shares on the Landa platform is limited to trading hours of operation. While orders may be placed at any time, their execution will only take place during market hours.Landa’s trading hours are Monday through Friday, 09:30 am to 5:00 pm EST.
How do I change my order price?
Make a mistake when pricing your shares?Just cancel the order and re-submit at the right share price.
Currently, there is no way to edit a submitted order to purchase or sell shares. Furthermore, there is no way to reverse the transaction should it go through at the incorrect price. You are required to confirm your order price before the order goes live.
How liquid are my shares in properties?
Unlike owning a property and waiting years to sell and acquire the proceeds, we aim to create liquidity as soon as possible for our investors.Once all the initial shares of a series offering are sold, we open the shares up for trading so that investors can actively buy and sell shares with each other.
However, all investments have risk, and we can’t guarantee that an active marketplace for any of the series shares will be available for trading at any specific time. Investors must be prepared to hold their shares indefinitely, in a worst-case scenario. The upside is that you will continue to collect any dividends accrued through your owned shares while you wait.
Understanding the order book
Order Book Explained
The order book is a dynamic, real-time ledger of all pending buy and sell orders in the market for a particular property. It provides investors with a visual representation of market demand and supply at various price levels. The order book is structured as follows:
- Bids: These are buy orders, listed in descending order with the highest price (i.e., the price a buyer is willing to pay) at the top. This represents the maximum price buyers are currently willing to pay for the property shares.
- Asks: These are sell orders, listed in ascending order with the lowest price at the top. This is the minimum price sellers are currently willing to accept for a property share.
The order book lists all buy and sell orders, providing real-time market data. It's divided into bids (buy orders) and asks (sell orders) by amount and price.
How Orders are Matched
Orders on Landa are matched based on price and time priorities. The best-priced orders take precedence (orders with matches), and among those, earlier orders have priority over later ones. This system ensures fairness and efficiency in the market.
Recent Trades
You can also view Recent Trades under the Order Book. Recent Trades represent the most recent trades in terms of price and volume for a particular property.
Property Financing
How does the interest rate impact real estate investing?
Interest rates play a pivotal role in real estate markets. Fluctuations in these rates can affect the ease of buying or selling properties.
Lower interest rates generally make purchasing homes more affordable, stimulating market activity.
Conversely, higher interest rates can increase the cost of borrowing, potentially slowing down sales. However, it's important to consider other factors like housing supply, credit standards, and economic conditions, as they also influence real estate prices.
Why two year loans?
Landa's two-year, interest-only loan structure is designed to optimize investment returns. This period allows for the appreciation of property value and growth in cash flow, which can be crucial for maximizing returns.
Additionally, the two-year term provides an opportunity to refinance under potentially more favorable conditions. In the state of Georgia, shorter-term loans (under three years) offer tax efficiencies, further enhancing the overall return on investment. By understanding these strategic benefits, investors on Landa can better appreciate the rationale behind the platform's loan structuring.
Why use debt financing?
Utilizing debt can significantly boost your return on investment. Through debt, investors on Landa can deploy less capital per property, enabling the purchase of a larger or more diverse property portfolio. Landa's strategic use of debt, ranging from 0% to 80% leverage, depends on the current interest rate environment and available market terms. This approach ensures that each property listed on Landa is leveraged in a way that balances risk and return, keeping investment opportunities accessible and attractive.
Different types of loans we use
Understanding the variety of loan types available on Landa properties is crucial for making informed investment decisions. Below, we explain the different loan types you may encounter on our property pages.
Long-Term Mortgage (Refinance Note)
The long-term mortgage, also known as a refinance note, is a lasting financial commitment, typically extending beyond a year. This type of loan is often structured as interest-only, meaning the series LLC pays only the interest monthly to the lender, with the principal amount due at the end of the term.
Acquisition Note
Upon acquiring a property, the series may take an acquisition note from Landa Holdings to cover initial expenses, including the purchase price, improvement costs, acquisition fees, and a cash reserve. This loan carries a 4.5% interest rate and is paid back to Landa Holdings by the series. Once the long-term mortgage is in place and all IPO shares are sold, the acquisition note is fully repaid.
Bridge Loan
Bridge loans are short-term solutions used during the title transfer to the series LLC. These one-year loans, provided by third-party lenders, bridge the gap until a long-term mortgage is obtained. Typically, the interest on these loans is covered by Landa Holdings Inc., the manager.
Operational Loan
Operational loans address immediate operational needs, such as property improvements or vendor payments. For instance, if a property requires a $10,000 improvement but only has $6,000 available, a $4,000 operational loan can be taken to cover the shortfall. These loans are paid back over time, including principal and interest.
Lend
What am I investing in?
Investing with Lend
When you buy shares in Lend, you're investing in Landa Financing LLC. This entity provides first mortgage loans to rental properties. As these properties make their adjustable, interest-only monthly loan payments, you, as an investor, earn dividends from these payments. Think of it as getting a share of the returns from the mortgage payments made.
How can I liquidate my shares?
Lend's Investment Structure
Lend is designed as a longer-term investment opportunity. For investors seeking flexibility, there's a redemption plan in place. After holding your shares for at least 12 months, you have the option to sell them back to Landa. The rate at which you can sell back your shares varies, depending on how long you've held them.
Redemption Rate Breakdown
- Less than 12 months: Not applicable
- 12 months - 3 years: 97% of the current share price
- 3 - 4 years: 98% of the current share price
- 4 - 5 years: 99% of the current share price
- 5 years or more: 100% of the current share price
How is Lend taxed?
Taxation Structure of Lend
Lend operates as a mortgage REIT, which is designed to optimize tax benefits for investors. Here's what this means for you:
- The fund itself isn't taxed, ensuring more returns are passed on to investors.
- You, as an investor, are responsible for individual taxation on your returns.
- Every year, investors receive a 1099-DIV form which helps in reporting dividends. Expect this form by January 31st of each year.
Note: While Lend is set up as a REIT, there's always a risk of non-compliance. If, for some reason, Lend fails to qualify as a REIT, investors would be required to pay income tax on their dividends.
What does the interest rate mean?
Interest Rates
The interest rate is the percentage at which loan payments are made to Lend. Lend offers adjustable interest-only loans at SOFR + 3.5% and is subject to change in accordance with the SOFR and base rate (3.5%).
What is SOFR?
SOFR, or Secured Overnight Financing Rate, is a benchmark interest rate that represents the cost of short-term borrowing with U.S. Treasury securities as collateral, essentially an overnight rate.
This rate is significant in the financial world as it's used to determine prices for various financial instruments, including derivatives, loans, and mortgages.
Let's break down the different interest rates we feature in the app:
- Current Rate: This is today's combined rate. It's derived from the 30-day SOFR (Secured Overnight Financing Rate) added to Landa's base rate.
- Interest Rate: The average rate from all the loan payments this month. This combined rate represents the blended rate used to calculate this month's dividends.
- Property Loan Rate: This rate combines the base rate and the 30-day SOFR by individual property. The base rate has historically been 2%, but is currently 3.5%. The property loan rate varies based on the origination date of the property loan.
Please note the interest rate does not reflect performance or the return of Lend.
How are dividends calculated?
Understanding Lend Dividends
At Landa, we have a straightforward formula to determine dividends for Lend:
Dividend = Operating Income - Expenses
For Lend, 'Operating Income' refers to the property loan payments made to Lend. On the other hand, 'Expenses' cover costs Lend incurs, such as technology or legal fees related to property financing and filings.
While Lend continues to grow and finance more properties, net expenses come from the raised funds rather than affecting the dividend calculation.
For instance, if Lend collected $10,000 from loan payments, the dividend would be $10,000. Any necessary expenses would be paid directly by the funds Lend has raised.
How Loan Payments are Calculated
Properties under Lend are financed through interest-only mortgages. An interest-only mortgage means that payments are made only on the interest of the loan, not the original amount borrowed (commonly called the principal) plus the interest.
Here's how loan payments are calculated for properties financed by Lend:
Interest Amount = P × (T/360) × D
Breaking it down:
- P: The principal balance or the amount of debt on the property.
- T: The total interest rate. This rate includes the rate set when the mortgage began (currently 3.5%, but historically 2%) and a commonly used rate called the 30-day average SOFR.
- D: This counts the days in a month the property accrues interest on its loan. If a loan starts mid-month, interest is charged only from that start date. In following months, interest is charged for the entire month.
The number 360 stands for the days in a "financial" year, a standard way of calculating interest in the finance world.
For example, if a property has a debt of $100,000 (P) with an 8% interest rate (T) and is making a payment in a month with 30 days (D), the interest payment for that month would be about $416.67.