I have been interested in real estate crowdfunding in Canada for a while. Crowdfunding real estate Canada seems to be another great passive income stream in Canada. Enter addy, a platform for real estate crowdfunding in Canada. Here’s my addy review.
In the review you will learn about what addy is and how it works, what real estate crowdfunding in Canada is, how income from properties listed on addy that you invest in is taxed, and a step-by-step guide on how you can start investing with addy with as little as $1.
Last updated: April 2023
Many people in Vancouver have real estate FOMO because they believe it is the path to get rich in Canada. Home owners say things like “I’m glad I bought when I bought” and people who do not own Vancouver property wonder if they will ever be able to get into the market. They may even have trouble deciding whether to sell or rent out their condo.
Many Vancouver home owners are highly leveraged to be able to afford real estate and definitely pay more than the recommended 30-something percent of your gross income for their shelter costs, and some take out seven figure mortgages too.
It is even worse recently as interest rates have decreased substantially, the ‘Fed’ is printing money (brrr brrr goes the machine) and subsequently, Vancouver real estate prices have inflated even more.
Well, now you can really invest in real estate in Canadian cities for as little as $1 (yes you read that right) and everyone has a chance to get into the real estate market.
Yes, you as a millennial investor in Canada can own a piece (or fraction) of real estate and STILL have your lattes!
Here is genymoney.ca’s addy invest review.
Table of Contents
What is addy
addy is an online investment platform based out of Vancouver, BC (arguably the real estate capital of Canada). addy’s mission is to make real estate investing accessible to everyone, without the life altering sacrifices that traditional property ownership may bring.
addy has been so successful with the release of properties recently, that many of them have been ‘selling out’ within hours or days.
addy is a proptech startup (proptech stands for property technology, think the partner to fintech, or financial technology) that wants to lower the barriers to real estate investment by letting their platform users invest with just $1.
addy’s tagline is ‘real estate for everyone’.
addy was co-founded by business partners Michael Stephenson and Stephen Jagger. They are both serial entrepreneurs and even lived in the Philippines and Singapore and created a business called PayrollHero, which focused on time, attendance, scheduling, and payroll for companies.
Stephen Jagger is a great entrepreneurial success story and had started a business even when he was in high school. His mom raised four successful boys and even created the Kids Help Phone for BC and Alberta.
What is Real Estate Crowdfunding?
Real estate crowdfunding is harnessing the power of a crowd of people (like people all grouped together investing through the Internet) to raise a large amount of money.
You could have something like 400 co-owners with you on a piece of property listed on addy.
In a way, it is similar to an IPO (Initial Public Offering) for a new stock. Everyone can have the opportunity to invest and become shareholders of a company if it goes public.
Instead of a private real estate transaction, addy has built technology to enable Issuers to bring their real estate opportunities to the public so you can invest little money and still be a part-owner of the property.
According to Moneysense, only a few years ago, crowdfunding real estate was only limited to those with 7 figure investment assets or only to American investors.
Who Can Invest with addy?
Is addy legit?
Not everyone in Canada can invest with addy right now. Currently, generally speaking, addy is available to residents of:
- British Columbia
- Alberta
- Ontario
- The provinces may vary depending on who the registered dealer of the property is, for example, Saskatchewan was recently enabled to invest
If you’re in a province that isn’t currently open, create an account and you’ll be notified when it does.
You also have to be at minimum, age 18, to be able to invest with addy.
addy has had a number of investments listed on their platform and thousands of Canadians have invested.
How Does Addy Work?
Here is how addy works:
- Issuers submit real estate opportunities to the addy platform
- The Issuer uses the addy platform to divide the investment into $1 increments
- Shares in the investment are available for $1 each. You decide how many you want to own
Investors can decide how much they want to invest ranging from $1 minimum to $2,500 maximum.
Each investment has a set term (this is outlined in the Offering Documents for each property, recent terms have ranged from 5 – 10 years) and your unit ownership can’t be sold once it is deposited, until the exit strategy for the property is completed.
The exit strategy is usually in the form of a sale. When it is sold, the investors will be paid out any appreciation relative to their investment percentage.
Then, the funds from the sale will go into the investor’s addy wallet and then the investor can make the decision to reinvest in another property or withdraw the money to the linked bank account.
Can You Invest in Real Estate for $1?
Yes you really can, though any appreciation or rental income you make will be relative to your $1.
Let’s just say you should have realistic expectations and that $1 won’t turn into $10,000.
How Much Does addy Cost?
You can invest in addy for free, but there are a few perks if you are a paid member.
The paid addy membership option is called addyONE.
You can access addy as a:
- regular addy user and have access to most addy properties
- Invest up to $1500 per addy property
- an addyONE member for $50/year, this gets you
- Ability to invest up to $2500 per property
- Ability to access instant funding
- Access to all addy properties available once they are listed
You don’t have to pay upfront real estate commissions when buying or closing costs when selling the property.
What Are the Risks of Investing with addy?
No addy review is complete without looking at the risks of addy real estate.
In terms of safety of using the addy platform, it is pretty thorough, the account set up is rigorous. You need to verify your email, verify your profile (and send government photo ID), and verify your linked bank account.
In terms of an investment risk perspective, you should seek professional advice if you’re unsure about investing with addy.
If you invest with addy, addy does not guarantee returns and the returns in the Offering Documents are estimated based on current market conditions.
Personally I am throwing some money into my addy wallet that I wouldn’t be worried to lose- it is low barrier to invest, $1 minimum, that really is less than a latte.
After you make your purchase, you do have 2 days to change your mind.
You can also have your addy membership refunded if you’re not satisfied within 60 days.
How is Addy Different from a REIT?
You might be wondering how addy is different from just investing in a REIT.
addy is different from a REIT (Real Estate Investment Trust) in that you can actually see and drive by the properties that it invests in. Everything is transparent with this real estate crowdfunding platform in Canada.
The other thing that is different about addy when compared to a REIT, is that YOU have the decision making power to invest in the particular property or not, and you do your own due diligence reviewing the Offering Memorandum and other documents before investing.
In addition, there is a limit of how much you can invest in a particular property addy offers, a maximum of $2500. However, you can invest up to $2500 with multiple properties, and can see the properties being offered under the ‘properties’ tab. With a REIT there is no limit to the number of shares you can purchase.
How Is Income From Addy Taxed?
You cannot hold addy investments in your RRSP or TFSA, therefore the income you receive from addy will be taxed.
For income producing asset investment properties that have distributions (for example, a multi-unit residential property that collects rent) you will receive a T5 for your tax return.
When the property is sold (this is usually the case for the exit strategy) there will be capital gains (or losses, hopefully not losses). As always, talk to an Accounting Professional for advice.
Related: Tax Efficient Investing in Canada
Step-By-Step to Invest with addy
To invest with addy you will need to create an account.
Then you need to verify your email and set up your profile (like include your legal name, that would appear on your tax documents).
Then you will have to add money to your wallet.
You can do this by connecting your bank account to fund your addy account but it takes 3-5 days.
addy has Instant Funding available for addyONE members, so you won’t have to miss out on the latest addy investment property up for grabs.
Then you can click on Properties for Sale to see what is being crowdfunded.
You can read how often the distributions will be paid out and what the estimated investment return will be.
You should review the Offering Documents carefully, and once you have signed the confidentiality agreement you can see things like the Investor Deck or Inspection Report and Appraisal review document.
The Estimated IRR (Internal Rate of Return) is shared and each property has a different estimated payout. For some, the returns will be annual, quarterly, or paid out upon exit (sale of the property). You’ll have to look at the Offering Documents and read carefully how your investment will be handled.
Then you decide if you want to invest, input how many shares you want to invest (each share is $1), and you click “buy now”.
addy Referral Program
As of June 2021, addy rolled out a referral program at the request of addy members. Initially it was credit or points to earn towards prizes, but as of October 2021 they give you $25 credit to your addy wallet.
If you refer a friend to be an addy member, you will get $25 deposited into your addy wallet (and your friend will get $25 in their addy wallet too). There are additional prizes based on the number of referrals you make, check you account for the most recent list. In the past you could earn things like Starbucks gift cards, Apple AirPods, PS5 or a MacBook..
Also to help you with the referral program you can share details of your addy investments through your smartphone and addy invest portfolio app.
You can share your investment certificate (what a way to crowdfund, share with your friends instantly what property you invested in), and your expected returns from your investment.
Genymoney.ca addy review
What’s the final addy review?
Well, there are people who love to be landlords (e.g. for a laneway house) and there are people who would rather be hands off, and not have to deal with annoying tenants who ask you to change their light bulb. Or have to deal with vacancy and get anxious about not being able to find tenants.
I am in the latter camp. I prefer to be hands off and enjoy true passive income.
Also, it seems kind of ‘cool’ to be able to invest in a piece of big property like a multi-unit residential apartment building that would normally be over $5,000,000 with only $1. It’s almost as if you get to join in on the big kids (Ultra High Net Worth or High Net Worth Individuals) who normally sport Louis Vuitton, Rolexes, and Maseratis, with your loonie (or more if you wish to invest more).
Personally I have put some money in my addy account and will be reviewing which properties to invest in, and they will be increasing the number of properties you can review and invest in on the platform (right now there are two properties).
More and more properties are being listed on addy and some sell out quickly. In fact, one sold out within a week in Kimberly BC, over 500+ investors participated, with the average investment $500.
If you want to invest in Canadian real estate but don’t want the hassle of dealing with realtors, and paying for closing costs, and finding tenants, or renovating, and don’t have the expertise or confidence to be flipping your property, then crowdfunding real estate in Canada may be the answer for you.
Also, since the minimum to invest is only $1, I think it would be kind of fun to throw $100 (or money that you don’t need for at least five years) in on a piece of real estate and drive by and check out your co-owned property. Of course, this would be after doing your due diligence before throwing in your $100.
Click here to invest your money with addy.
You might also be interested in:
Have you tried real estate crowdfunding in Canada?
What is your addy review?
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.
Nice read. Thanks for sharing, Gen Y. You said they only sold 5 properties so far. What is the future plan? Do they know how many properties they are going to buy in 2021 or 2022? How if they raise money for a property but it gets sold to another buyer. Will they just refund people their money?
The only issue here is the decision to sell the property. How do they decide to sell and how the investors know when they will get their money back? Unless all these details are posted on their site. I am not eligible “QC Country” anyway.
@Mr. Dreamer- There are already 2 properties being listed now and another one coming up. I am not sure how many properties are going to be crowdfunded. Yes the money is refunded back into the addy wallet- until the agreement is done, there is no issuance of shares and it is a pending investment.
Selling the property information is found in the Offering Memorandum- For some of the recent ones looks like the plan is to sell 5 years after the crowdfunding is complete.
This is very interesting. While reading, I kept wondering “but what about taxes?” and you answered that question. Thanks for sharing, GYM.
@DreamdingOfDividends- That was my main question too! Hah 🙂
Does investing in Addy properties make the investor ineligible for first time home owner grants and incentives(eg 1st time RRSP Home Buyer Plan) from the government ?
@InvestinginDreams- That’s a good question, I don’t think so because it is structured that you as the investor are purchasing ‘Shares’. I’ll ask though, confirm and find out.
Also you can’t hold it in an RRSP or TFSA or RESP or anything like that. It has to be non-registered.
@Investing in Dreams- My thoughts are confirmed. Here’s what addy says:
“it does not affect their first time home buyers. With addy they are investing in shares of a company that owns the property.”
Wow, interesting, thanks for sharing. I have read lots of blogs, like yourself, about how well these work in the US but this seems to be different. It is specifically for smaller investors which is good but also makes me wonder why. I say this as it is literally invest for as little as a dollar and a maximum of $1,500 on a specific property. I get there are other opportunities for people with more money but interesting I guess.
@Financial Fred- Yes I’m not sure why. They don’t limit you to the number of properties you can invest with though (e.g. $1500 for one, $1500 for another etc.).
A combination of addy policy and provincial securities regulations cap how much you can invest in crowd funded deals. I’m in 26 addy’s now (31 launched so far) and happy. I’ve also sponsored the Colton Fox in Vernon deal (shown above in the images) and I’m sponsoring a deal in Oliver BC available for investment right now.
@Cameron Rogers- Great to hear, thanks for sharing. Oliver BC is beautiful, was just there picking cherries.
do you get pay yet or do you have any payment proof?
@Aun- The property that I put money into was one that would pay out when it is finalized/ sold (which means no distributions). It would depend on the contract of the property that you invest in, some are monthly, some are quarterly, etc.
if the property is to be retained for a possible five years, how are repairs and maintenance handled?
@alan- For the one that I purchased, the details were in the Offering Memorandum.
@alan- I checked with addy and they said the General Partner handles the maintenance of the building but specific details are outlined in the Offering Memorandum.
The General Partner runs the property including taking care of repairs, maintenance or construction during the course of the investment. It is truly a hands off way to directly invest in real estate without having to deal with tenants and repairs.
@Cameron Rogers- Thanks for elaborating.
Fantastic article. As part of the Addy Investment Committee, I’m pleased to see the interest in our mission to unlock real estate investing for everyone. I’m also happy to see just how thoroughly you grasped the entire process.
@Tri- Thanks, I appreciate the visit and comment 🙂
Great read.
How are members notified when shares become available to buy?
A scheduled time?, an alert on a device? etc.
I ask, because I see that the shares for the last property, in Hamilton Ontario, were all snapped in just 63 minutes.
?
@Steven- I know, things are getting snapped up quickly, addy is very popular. I follow the addy CEO on Twitter @sjagger and also their company twitter account @addyinvest too and they post updates.
Hi GYM. This is very interesting. Tried being a landlord before and realized that I’ prefer the hands off approach just like yourself. We already invested heavily in REITs in our registered accounts. Are the properties mainly in the lower mainland in BC?
More research and more reading to do. Excellent article.
@Rommel- Initially they were mainly in BC, but there are properties I’ve seen in Ontario and Alberta too. They are doing very well, selling out properties within hours.
as of July 2023 addy has launched 31 properties in BC, AB, ON and QC. We expect to see the first US deal launched soon which will be interesting.
@Cameron- Great to hear.
Thanks for sharing! Excellent article.
@Edwin- Thanks for visiting.
Thanks quite an interesting way to invest in real estate! I would love to see how you did in a few months!
@Florian- The property I invested in is ‘locked in’ meaning I won’t see ROI in a few years, there are other offerings that have distributions though.
With three properties currently on sale – now’s a great time to get in if interested IMO.