Getaway Blog - Real Estate Investing Tips & Trends

All your questions answered

What is Getaway?

Getaway is a real estate technology company. At Getaway, our mission is to help real estate investors like yourself grow and expand their portfolios. We do this by providing you with the tools and resources you need to scale. We co-invest alongside you in what's called preferred equity to reduce the down payment needed for the deal. When it comes to our platform, we curate pre-vetted deals and connect you with local partners who can help manage them.

How do I get started?

Please click here to answer a few questions about your prefereces and set up a call to speak with our team. From there, we'll delve into the details of our process, addressing any further questions you may have followed by next steps.

How does the process work end-to-end?

The first step is to browse our curated deals or source your own
Once you’ve found a property, share details about yourself and the property you’re interested in purchasing and we’ll determine its eligibility and Getaway’s contribution
After that, we connect you with a local partner agent who will guide you through every step of the transaction process, helping you make an offer and successfully acquire the property
Once you’ve won the offer, partner with one of Getaway's preferred lenders to secure the necessary financing for your property, ensuring a smooth and efficient close
We establish an entity together in which you hold a the majority ownership. We adopt this approach because we don't place a lien on the property. Our leverage is embedded within the LLC's operating agreement. We'll open a business bank account, and both parties will contribute their portion of the down payment. Following that, we'll wire the funds to the title company at closing.
After closing, Getaway connects you with a local property manager to unlock the full potential of your property
While it's an active rental, the property's revenue is designed to cover operating expenses, mortgage payments, and the preferred equity investment rate. Any surplus cash flow beyond these obligations will be disbursed to you. In the event that the property's revenue falls short of meeting these obligations, you will be responsible for covering the difference.
By year 5, you’ll buy out the preferred equity portion by using a cash out refinance strategy or out-of-pocket

What are the benefits of working with Getaway?

1. Scale Faster with More Buying Power: Utilizing commercial real estate financing strategies such as DSCR loans and preferred equity partners can provide aspiring real estate investors with more financing options, increasing your buying power.

‍

2. Portfolio Diversification: Real estate investments offer a hedge against inflation and market volatility, and by using financing strategies, investors can diversify their investment portfolio and potentially reduce their overall risk.

3. Ongoing Support : Getaway stays on as your investment partner for as long as we are invested into the property. This means we help source and secure on-the-ground property management partners, we oversee property performance, provide professional grade reporting, and we handle the accounting and tax prep. This can free up the investor's time and make the investment process much more convenient and stress-free.

Can I choose any property?

At Getaway, we believe in giving our investors the freedom to choose the properties they want to invest in. Once you've identified a property you're interested in, our team will underwrite it to ensure that it meets our criteria for projected returns. The co-investment amount varies by property, location and deal characteristics, as no two deals are the same. We take into account factors such as the property's cost, revenue potential, and local regulations to determine whether it has strong potential. Our team is always available to provide guidance and support throughout the process to help you.

Does Getaway put a lien on the property?

As part of our closing process, we ensure that a lien is not placed on the property. Instead, we facilitate the formation of a Limited Liability Company (LLC) in collaboration with you as the majority owner. The property acquisition is then conducted under the name of the LLC.

What type of properties are eligible?

We currently support the following residential properties:
- Single-family
- Townhouse
- 2-4 units
- 5+ units

‍

We do not currently support:
- Condos
- Condo-hotels
- Commercial (retail, industrial, office)
- Mixed-use

What lender should I use to secure the DSCR loan?

We have relationships with a select group of preferred lenders who specialize in assisting investors in securing DSCR loans. These lenders have been vetted by Getaway and are fully on board with underwriting loans using our strategic financing product. Rest assured that our preferred lenders are experienced and committed to providing competitive financing options that align with our unique investment approach. We have taken the time to establish these partnerships to ensure a seamless and reliable financing process.

Do you work with multi-family properties?

Yes! We do support multi-family properties.

Do you work with short-term rentals?

At the moment, we only support long-term rental properties. We plan to add short-term rentals in the future, so please check back.

Which markets do you work with?

We currently focus on the Mid-West & South Eastern regions of the USA

Please reach out if you are interested in other geographies as we can accommodate on a case by case basis

Are there credit and income requirements?

We partner with investors who have:
‍

- 700+ credit score
- Annual income of $100,000+
- Proof of liquidity of 6 months of PITI (Principal, Interest, Taxes, and Insurance

What is the min and max purchase price?

We target properties with a purchase price between $100,000 to $1,500,000.

Can I invest with my LLC?

Yes! We can support LLC investments. Please note you will still be required to sign a personal guarantee if you invest through an LLC.

Can I use my own real estate agent for the deal?

Getaway has a network of partner agents that help our investors. Please speak with a team member if you would like to use your own agent.

Is there a prepayment penalty if pay early?

There is no pre-payment penalty after 24 months. For example, if you were to repay principal at month 20, you would owe 4 months of interest payments.

Can I make renovations to the property?

Our product is not suitable for a fix and flip or large rehab projects. We require that all properties are in service (i.e. listed for rent) within 30 days of closing. Light weight improvements (ex. paint, carpet) are acceptable.

Who manages the property?

Getaway connects you with local property manager partners that take care of the day-to-day operations of the property. The management must have a minimum of 2 years of operating history. If the Getaway team doesn't have property management partners in the investment area, we will help source and place a property manager. Getaway requires a professional property manager to be put in place. This estimated expense is included in the annual cash flow summary table. However, the final fees are subject to change depending on the characteristics of the property and the market.

Can I self manage the property?

Getaway requires a professional property manager to be put in place. The management company must have a minimum of 2 years of operating history. If you meet this requirement, your management company can property manage the unit(s).

When can I sell the property?

At Getaway, we offer our investors flexibility when it comes to selling . Investors can choose to sell the property at any time, subject to market conditions and any restrictions set out in the investment agreement. If the property has been financed using preferred equity, the investor can also choose to repay the preferred equity portion early, subject to any early repayment fees or penalties if applicable.

‍

It's important to remember that real estate appreciation is typically most effective over a long-term horizon when the property is held. Real estate values can fluctuate in the short term, and it may take time for the property to appreciate in value. Additionally, selling a property before it has been held for a significant period may result in capital gains taxes and other transaction costs that can impact the profitability of the investment. As such, we generally recommend that investors hold their properties for at least a few years to allow for potential appreciation and to maximize the returns on their investment. Ultimately, the decision to sell a property should be based on the individual investor's goals, financial situation, and market conditions at the time.

Is there guaranteed rent every month?

We aim to work with properties that have a projected cash flow that will cover the debt service and operating costs of the property, ensuring that the investment is sustainable in the long term. Our team conducts extensive market research, including analyzing local rental rates, vacancy rates, and comparable sales data to make informed decisions about which properties will be the most profitable for our investors.

However, it is important to note that investing in real estate, like any investment, carries inherent risks and we cannot guarantee rent or profits. Factors such as changes in the local real estate market, unexpected maintenance or repair costs, and fluctuations in interest rates can all impact the profitability of an investment. While we cannot guarantee profits, we work closely with our investors to keep them informed about the performance of their investments and to provide guidance and support throughout the investment process.

‍

What are the fees that I should be expecting?

An investment from Getaway has three costs associated with it: Preferred Equity Rate, Origination and Asset Management Fees.

- Preferred Equity Rate: As an investor, you keep all of the upside in cash flow and appreciation on the property. In return, Getaway has a set rate on the principal that is invested into the deal.
- Origination Fee: Covers the cost of originating the investment and all of the administrative setup needed.
- Asset Management Fee: Getaway oversees and handles all of the back office work associated with the rental property and LLC management.

How long do we partner for?

Our standard agreement is a 5 year term. An investor can buy Getaway out with no penalty after the 2nd year. An investor can also extend the agreement by 1 year up to 3 times (capping at 8 years) for an additional fee.

What rates should I expect?

An investment from Getaway has three costs associated with it: Acquisition, Preferred Equity Rate, and Asset Management Fee.

Acquisition Fee: Covers the cost of originating the investment and all of the legal setup
Preferred Equity Rate: As an investor, you keep all of the upside in cashflow and appreciation on the property. In return, Getaway has a set interest rate on the principal that is invested into the deal.
Asset Management: Getaway oversees and handles all of the back office work associated with the rental property and LLC management.

Getaway Guide

Practical Steps to Planning Your Down Payment for Investment Property

Practical Steps to Understanding and Applying the Gross Rent Multiplier Formula

Practical Steps to Understanding Real Estate Depreciation: A Comprehensive Guide

Practical Steps to Investing in Turnkey Real Estate: A Comprehensive Guide

Practical Steps to a Successful Move Out Checklist: Tips and Techniques

Understanding Property Management Fees: A Practical Guide for Property Owners

All your questions answered