Fractional is a full-service marketplace that empowers friends and investing communities to purchase and manage real estate together. We streamlined the entire real estate co-investment process onto one platform making co-investing accessible and hassle-free. From making an offer, setting up the LLC, operating agreements, and business banking, to pairing partnerships with property managers, powering bookkeeping, rental distributions, and K1s, Fractional does it all.
How Fractional boosts your business
What’s better than helping a client close on a home? Helping the same client close on an investment home! There has been tremendous growth in investment homes, with real estate investors buying a record 18.4% of homes sold in the US in Q4 2021. Whether you are working with young professionals or empty-nester parents looking to break into real estate investing, or seasoned investors looking to diversify and acquire more properties, you can use Fractional to help your existing clients close on investment homes.
💸 Make 25% referral fee
Refer your clients, and let us help them easily invest in real estate through co-ownership. Get paid 25% of Fractional’s one-time fee (3.5% of purchase price). 🙌 Earn 3% buy-side commission
For agents who work with investment properties, you can easily add those properties onto Fractional and earn 3% as a Buyer Agent. We will help you find ready-to-act buyers so you can close on more homes and larger portfolios. 🔬 Don’t worry about the details
Easily refer your clients and we’ll take care of the rest! From making an offer, setting up the LLC and operating agreements, to bookkeeping and rental distributions, Fractional does it all. 🏘 Co-invest yourself and save on fees
Use Fractional to co-invest with your clients, friends, or other agents. Save 25% on Fractional fees as a licensed agent when you use us to purchase property.
With investment homes, it makes sense to co-own. Unlike timeshares and second homes, there are no scheduling hassles or complicated ways to divide up home use. With Fractional, anyone can get an investment home up and running: we will handle all of the legal, business, and accounting headaches so clients get all the benefits of co-investing without the hassle. Read more about Fractional’s advantages here. We’ve outlined our process below, but please schedule a call with us to learn more about how we can work with you and your clients!
How Fractional works for buyers (your clients!):
- Schedule a call with our Fractional concierge: once we understand a user’s investment goals and interests, we will place them in the right investment communities. Users can also come with pre-formed investment groups and our concierge will help the group get started on funding and acquiring an investment home.
- Join communities & make connections: our Fractional concierge will invite users to communities that best align with their goals. Members will have access to all investment opportunities shared within their communities. Users can also discover communities via Discover.
- Our agents often create investment communities on Fractional for their clients. Communities are a great way to share exclusive investment opportunities with clients, and a space for your clients to collaborate on investments together.
- Join investment proposal(s): investments are shared as proposals within communities and across networks. User can easily join proposals to show interest and fund the investment.
- Form partnerships: when an investment proposal has enough funding from members, users can easily form partnerships using our operating agreement template.
- Acquire investment properties: Fractional will handle making an offer, setting up the LLC, mortgage financing, and business banking account. We provide over $25k in savings on business, legal, and accounting fees.
- Manage properties: after the property is acquired, Fractional will pair partnerships with a property manager and power bookkeeping, rental distributions, K1s, and voting directly on our platform.
For many of your clients, real estate co-investment may be a new concept. While they may be familiar with other real estate investment vehicles, they are relying on your expertise to understand what makes Fractional’s co-investment modal special. Feel free to use the below pitch to explain the benefits of direct co-ownership via Fractional to your clients and network.
The Fractional pitch:
Fractional allows friends and investing communities to purchase and manage real estate together. We are a one-stop-shop to form partnerships, collaborate on deals, and manage real estate properties together. On Fractional, you will be able to: Build your network: you can find and connect with like-minded investors, join investment communities, and invite your friends to work on deals together. Discover and source investment homes: you can create and share your own investment property deals, or find opportunities shared from your communities and network. Easily set up partnerships and acquire properties: you can relax as Fractional handles making an offer, organizing mortgage financing, and automatically setting up the LLC, operating legal agreement, and business banking account. Manage your property: we pair partnerships with a property manager and power bookkeeping, rental distributions, K1s, and voting directly on our platform.
What makes Fractional special?
- Lower cost-of-entry and greater purchasing power: own property for a Fraction of the price with the capacity to buy more capital-intensive properties. Co-ownership increases affordability and boosts purchasing power.
- Flexible diversification: own parts of multiple properties and reduce risk, with the flexibility to choose the ownership level that makes the most sense.
- Significantly less cost and hassle: Fractional will guide buyers through the entire co-investment process and provide over $25k in savings on business, legal, and accounting fees.
- Effortless management for passive cash-flow: Fractional will set your partnership up with our property management network to get investment properties cash-flowing in no time.
- Mentorship: learn from partners, see why they make certain decisions, and get direct hands-on real estate experience.
- Higher returns: earn more and get tax benefits as a direct co-owner on Fractional instead of paying high trust fees and dividend taxes with REITs.
What’s the difference between Fractional vs REITS vs Crowdfunding platforms?
Fractional gives you all the benefits of direct ownership. You have full control in deciding which property to invest in, who you want to invest with, and how involved you want to be in making executive decisions. Private REITs and crowdfunding platforms lock you in for long hold periods, and you can lose 40% or more of your annual rental income due to taxes and fees. With Fractional, pay no annual fees, sell your ownership of the property anytime, and take advantage of significant home ownership and rental property tax benefits. Read more about Fractional’s advantages here.
How does the discount work if we bring our own group?
If you invest with a pre-formed group, we will provide a 25% discount on all Fractional fees, upfront and monthly. Will my partnership be able to obtain mortgage financing?
Yes! Lenders in our network can get your partnership set up with mortgage financing, even without a personal guarantor. They can provide different setups for you to choose a rate and term that best fits your needs. If we have an agent that represents us, who pays the agent commission of 3%?
The agent that represents you in a purchase of a property will collect commission from the seller. I noticed in the FAQs it says that you charge the following costs: 3.5% of acquisition and 2% of rent. Would the 2% of rent would be over and above the 6% of the property management fees for a total of 8% of monthly rent?
Yes, the 2% is our service fee on the monthly rent. While the typical property management fee ranges from 8-12% of the monthly rent, our in-network property manager only charges 6%. Do you still charge this recurring 2% monthly fee if we bring our own property management company?
Yes, Fractional handles the following outside of property management:
- Preparing and performing contracts and agreements
- Executing documents
- Incur indebtedness less than 6 months of rental income
- Obtain insurance
- Employ professional advisors to carry out business operations
- Make tax elections
- Pay Company expenses
- Establish the reserve
- Charge a pre-agreed upon Service Fee
- Not personally liable under any judgment of a court, debt, obligation, or liability of the Company
If you elect to not choose Fractional as your Manager, your partnership will not be taken off our platform and you’ll need to cover the 11 items addressed above. If we have our own property management company, how do the tax filings work? Do you still file those? Presumably, we’d have to handle that ourselves. Is that correct?
Fractional will still do bookkeeping, tax filings, and issue K-1 tax forms for partnerships that choose their own property management company. We make appropriate depreciation deductions to decrease and defer your taxable rental income. This brings significant amounts of tax benefits, a big part of why our investors love us! What happens if I want to sell my ownership of the property?
You can sell your ownership of the property whenever you would like - you don’t have to wait for your partnership! You will several options:
- Sell back to Fractional at 80% of fair market value at that time. For example, if you owned 25% of a property with a FMV of $200,000, you can exit at $200,000 x 25% x 80% = $40,000.
- Sell to other investors on the Fractional Secondary Marketplace with a 5% transfer fee.
- Sell the entire property upon approval from co-owners.
Fractional uses a third-party appraiser and leverages comps from multiple data sources to determine the fair market value of the property at the time you wish to sell your fractional ownership. Your shares’ worth is pro-rata to the fair market value of the property. How is title held?
An LLC in the state of the property is set up to hold title to the property. Co-owners are members of the LLC, with Fractional as an administrator.
If your clients have additional questions you can them to our resources page.
41% of Americans think Real Estate is the best long-term investment: nearly half of your contacts may be interested in an investment home! You don’t have to wait for your former clients to re-engage; they may be ready to buy an investment home today. With Fractional, easily help your clients purchase investment properties that best suit them. Organize your database to determine who to contact and how you should contact them.
Who: Contacts who have expressed interest or are actively looking for an investment home
How: Reach out via phone (share your Fractional pitch!) and email to set up an introduction with our Fractional concierge. We will help them get started on finding an investment home.
Who: Contacts who currently or previously owned an investment home
How: Reach out via phone (share your Fractional pitch!) and email to introduce and educate them on the benefits of Fractional and co-investment
Who: All other contacts in your database
How: Reach out via an email blast or your monthly newsletter
Now that you’ve identified contacts who may be interested in an investment home, it’s time to reach out! Feel free to use our email scripts to explain the benefits of Fractional and share specific opportunities with your network.
Template: Fractional Overview & FAQs
Subject: Easily co-invest in real estate with your friends and communities
Hi <client name>, An investment home is now within reach! I am excited to tell you about Fractional — a real estate platform that allows friends and investing communities to easily co-purchase and manage real estate together.
Fractional is a one-stop-shop for co-investment. They will take care of everything such as setting up the LLC, legal agreements, and business banking, to powering bookkeeping, rental distributions, and K1s. You can focus on finding your perfect investment home without any of the legal, accounting, and admin hassle.
Frequently asked questions
What happens if I want to sell my ownership of the property? You can sell your ownership whenever you would like - you don’t have to wait for your partnership! You will have several options such as selling to Fractional or using our secondary marketplace.
What’s the difference between Fractional vs REITS vs Crowdfunding platforms? Fractional gives you all the benefits of direct ownership. You have full control in deciding which property to invest in, who you want to invest with, and how involved you want to be in making executive decisions. Private REITs and crowdfunding platforms lock you in for long hold periods, and you can lose 40% or more of your annual rental income due to taxes and fees. With Fractional, pay no annual fees, sell your ownership of the property anytime, and take advantage of significant home ownership and rental property tax benefits. Read more about Fractional’s advantages here.
How is title held? An LLC in the state of the property is set up to hold title to the property. Co-owners are members of the LLC, with Fractional as an administrator.
Contact me to learn more about using Fractional and finding co-investment opportunities. I am here to help make your investment home journey seamless and hassle-free!
Template: Fractional Overview - How it works
Subject: Your investment home is waiting
Hi <client name>, Your investment home is within reach! I am excited to tell you about Fractional — a real estate platform that allows friends and investing communities to easily co-purchase and manage real estate together. Co-investment gives you more purchasing power, and Fractional empowers users to easily find co-investors, form partnerships, and get investment homes up and running.
How it works:
- 💌 Build your network. Connect and collaborate with like-minded investors, join investment communities, and invite your friends.
- ✍ Discover and source opportunities. Create and share investment proposals in under 15 minutes. Find investment opportunities from your communities and network.
- 🤝 Easily set up partnerships. Agree on a property and terms using our governance platform.
- 🏠 Acquire properties. Relax as we handle making an offer and setting up the LLC, co-ownership legal agreement, and business banking account.
- 📣 Manage your property. Work with our partner property managers, while we handle bookkeeping, rental distributions, and K1s.
Make an account on fractional.app today to get started, and contact me to learn more about how you can take advantage of co-investing.
Referring buyers to Fractional is easy, with generous referral fees! The Fractional team works alongside you to answer all buyer questions and guides your clients through the purchase process. From gathering enough co-investors and answering client questions, to setting up the partnership, business banking, title, and reporting, Fractional does the legwork.
- Contact our team at email@example.com to arrange your buyer introduction
- Work with the Fractional team to decide how involved or hands-off you want to be throughout the process
- Review our agent referral agreement that you, your broker, and Fractional will sign
- Collect your commission after the sale closes. With our LLC co-ownership structure, the closing process is quick and easy
Check out our to see how agents have used Fractional!
“With rising interest rates looming in the future that will hinder many investment deals, members of Fractional can combine cash buying power and eliminate the need for a lender. It was easy to start and run investment communities on Fractional and to discuss potential real estate opportunities, share deals, and provide educational content. Many of our investors are using Fractional to combine buying power and leveraging themselves. Communities are a great space for us to host classes and share knowledge with clients and other Fractional members. Members who connect in communities and classes often end up forming successful partnerships.”
- Michael & David Seeto, Seeto Realty in Texas
“As a full time real estate professional and investor myself, the idea of making real estate investing more accessible to the average person is something I am extremely proud to be a part of. Fractional simplifies the investment process from beginning to end and takes just about all the heavy lifting out of the equation. Over the course of the last ~2 years, I have gotten to know individuals of many different backgrounds: from tight knit co-workers buying their first investment property to seasoned investors closing a 20 unit apartment complex. I value all the experiences and relationships I’ve gained along the way thanks to Fractional.”
- Jimmy Hutchinson, REALTOR® in Atlanta, GA
“Working with Fractional has been such an amazing experience. Fractional is a well-oiled machine and the team was so easy to work with. I think that is what makes our partnership 10x better–the team at Fractional are genuinely such great people and a joy to work with. I am excited to continue seeing the growth and supporting investors/buyers in the Houston market in all capacities.”
- Laura Miranda, REALTOR® in Houston, TX
“I used one of Fractional’s investment communities (SARE) to gather a group of 40 members within a weekend to form a partnership and close on one of my off-market portfolio deals. I know I can find reliable clients and partnerships on Fractional for future real estate investments.”
- Andy Peters, Associate Broker at Keller Williams Chattahoochee North