We’ll cover the details of this relatively new platform throughout this review, but there’s one important thing for you to know upfront. LEX Markets is open to both accredited and non-accredited investors, allowing anyone to start investing. The question is: should you? Let’s find out!

LEX Markets is Best for…

Accredited and non-accredited investors who want to invest in real estate without the hassles that come along with the real estate ownership of commercial buildings. LEX Markets tries to mimic the liquidity of the stock market by allowing investors to trade shares on their secondary market.

Investors need only to purchase at least one initial public offering (IPO) before they can start receiving quarterly distributions for their investment. However, investors can only invest in one commercial property for every initial offering they purchase; LEX Markets doesn’t offer the instant diversification of a REIT. This could be a downside for some potential investors.

Pros & Cons

Like all other crowdfunding platforms, LEX Markets has its pros and cons. Here’s a brief overview of the main factors potential investors should take into account when considering investing through this company’s public offerings.

Pros:
● Only offers investments for high-quality properties ($15m+ minimum equity, 12+ months of stable cash flow, etc.)
● Low investment minimums of $250 per IPO share
● Open to both accredited and non-accredited investors
● Offers liquidity and quarterly distributions

Cons:
● The company hasn’t been around long, which means its advertised historical returns may not be accurate in the long run

Minimum Investment

LEX Markets does its real estate deals a bit differently than many other real estate investing platforms. Some companies—such as FNRP direct investments into individual properties; others offer instant diversification with REITs (Real Estate Investment Trusts).

However, when you invest with LEX Markets, you’re actually investing through LEX into your selected real estate opportunities. Many real estate markets are only available to accredited investors. LEX Markets acts as the middleman in this situation. You pay for an IPO, then they assign a percentage of a property's value to that particular IPO.

While many real estate assets require a minimum investment of $1,000 or more, LEX Markets allows you to purchase as little as a single share (at $250 per share). Although this minimum isn’t as low as some alternative platforms, we nonetheless think it’s very affordable for the average investor.

Investment Opportunities

Currently, LEX Markets has three real estate buildings listed on their property page. One property is open to investing, allowing you to purchase a share of the building’s public offering for $250/share. The shares for the other two properties have been sold, but you can still invest in these properties via trading on the built-in trading platform.

After making your initial $250 IPO purchase, you’ll immediately start to earn passive income. Any leftover funds deposited to the platform will earn interest, although this positive cash flow will be barely noticeable.

The big appeal of LEX Markets is the distributions to shareholders that it offers. If the property performs well, you can expect to receive distributions every quarter. However, how much you make—or lose—will ultimately depend on the property’s individual performance.

So far, the company has a history of success, but that still doesn’t guarantee that a particular property will perform well every quarter. If feasible, we recommend obtaining shares of multiple properties. While this won’t offer the same diversity as a REIT, it will at least help protect you from the high volatility associated with investing in only a single property.

Limitations

LEX Markets doesn’t have many limitations to speak of. True, IPO shares can’t be sold on alternative trading platforms, but LEX’s own secondary market makes it easy enough for real estate investors to liquidate their own real estate holdings. That’s more than can be said for many alternative platforms.

The company doesn’t allow you to actually purchase real estate buildings, but that was never the platform’s intention. After all, those interested in becoming real estate owners can always purchase real estate property directly.

Truly, the only real limitations of LEX Markets are its short history and limited real estate offerings. Dean Sterrett, Drew Sterrett, and Jesse Daugherty didn’t create the company until 2017, meaning potential investors only have roughly five years of data to look at.

While the company’s young age likely contributes to its limited number of offerings, it would still be nice to have more than one property IPO to invest in.

LEX Markets Review: A Summary

Complete with a low minimum investment requirement, a successful—albeit short—investment history, and an integrated secondary market, LEX Markets offers potential investors a lot of bang for their buck. While this platform is available for accredited investors, we think that non-accredited investors who are just starting out with real estate will benefit the most from this platform.

Ready to jump into the world of real estate? Click here to get started on LEX Markets!

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