Getaway Blog - Real Estate Investing Tips & Trends

All your questions answered

What is Getaway?

Getaway is an innovative product that allows individuals to invest in rental properties for as little as 5% down payment.

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Our platform uses commercial real estate financing strategies such as preferred equity and debt service coverage ratio (DSCR) loans to make rental property investing accessible to a wider audience. DSCR loans are underwritten to a rental property’s ability to produce cash flow vs the borrowers’ debt to income. Preferred equity partners invest alongside the borrower into the equity of the property (this is how the down payment can be reduced) in exchange for a designated rate of return over a predetermined time period. Once the preferred equity investor is bought out of their investment, usually done by refinancing the property, you own the equity portion of the property independently.

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With Getaway, investors can diversify their portfolio and earn passive income from rental properties with minimal upfront costs and peace of mind.

How do I get started?

You can get started here! We will ask you a few questions about your investing preferences and then you can schedule a call with our Investor Relations team.

How does the process work end-to-end?

1. Get pre-qualified: Fill out this quick questionnaire to determine if Getaway is right for you.

2. Find a property: Once you are qualified, work with the Getaway team to identify a property you are interested in purchasing. This can be a property that you find on your own or recommended by Getaway.

3. Underwrite the property: Getaway will run an analysis of the property of your choice to determine if it qualifies for the program. In general, we are targeting properties that can generate gross rental revenue equal to 10%+ of the purchase price. An example is a $500,000 property would generate $50,000+ a year in rental income.

4. Make an Offer & Purchase the property: Getaway's world-class agents help you through the entire transaction process.

5. Property onboarding: Getaway can handle everything for you from fixing the place up to getting it rent ready. You can just sit back and watch your investment transform into a desirable rental property.

6. Property becomes an active rental: The property is ready for prime time! Getaway partners with the best local property managers to ensure the property performs to its maximum potential. Getaway oversees all partners and provides a monthly performance report.

7. Cashflow covers costs: The revenue of the property generates pays for operating expenses, the mortgage, and the preferred equity investment rate. You will receive any additional cashflow after all obligations. If the property doesn’t cover obligations, you will be responsible for covering the difference.

8. After 5 years, own outright: Utilize a cash-out refinance after 5 years to buy out preferred equity partners. Now you will own the property and all of its cash flows outright.

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. Hassle-Free Investing: Getaway offers a hassle-free investing experience by utilizing advanced software tools to help investors identify great investment opportunities that may have otherwise gone unnoticed. Getaway also manages the property for the investor, taking care of all the day-to-day details such as maintenance, cleaning, and pricing. 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 the investor has identified a property they're interested in, our team will underwrite it to ensure that it meets our criteria for projected cash flow. We take into account factors such as the property's cost, revenue potential, and local regulations to determine whether it's a sound investment.

If we determine that the property meets our standards, we will offer it to our investors for investment. Our team is always available to provide guidance and support throughout the investment process to help our investors make informed decisions about which properties to invest in.

What type of properties are eligible?

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

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

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

What is the minimum and maximum 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 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 2 years

Can I make renovations to the property?

Our investment product is not suitable for a fix & flip or large rehab project.

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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 helps investors with the overall operation of the unit. If the Getaway team doesn't have property management in the investment area, we will help source and place a property manager.

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Getaway requires a professional property manager to be put in place. The management must have a minimum of 2 years of operating history.

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 their properties. Investors can choose to sell their 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 partner early, subject to any early repayment fees or penalties.

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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.

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However, it is important to note that investing in real estate, like any investment, carries inherent risks and we cannot guarantee 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: Origination, Preferred Equity Rate, and Asset Management Fee
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- Origination 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.

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Cost Structure
- Origination Fee: Ranges from .5%-1% of the purchase price
- Preferred Equity Rate: Rate of interest on the principal investment, rate is dependent on the deal
- Asset Management: 2% of principal invested

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?

Getaway's rates are determined by the market and the specific property. Please sign-up and schedule a call to learn more.

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Getaway Guide

HELOCs: A Complete Guide for Borrowing Against Your Home Equity

Reverse Mortgages: A Complete Guide for Seniors

Private Money Loans: What You Need to Know Before Borrowing

Conventional Loans: A Complete Guide for Homebuyers

FHA Loans: A Complete Guide for First-Time Homebuyers

Home Equity Loans: A Guide for Borrowing Against Your Home Equity

All your questions answered