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How are share prices calculated?
How are share prices calculated?
Korin Hedlund avatar
Written by Korin Hedlund
Updated over a week ago

Share Prices are our determination of the overall value of your investment. As a reminder, when you invest in a property on Arrived, you buy shares in an LLC that owns the property. The Share Price values include the value of all the assets and liabilities held by the LLC.

Our Investments team uses third-party property value estimates to approximate the property's current value, as well as a manual review to ensure there are no extreme outliers in the data.

That new property value is added to the balance sheet for the LLC. The LLC's biggest asset is the property, but other valuable assets like the cash reserve exist. We also factor in the liabilities, such as the loan balance and accrued property taxes. The result estimates the total equity investors own in the LLC.

We also make some adjustments for the upfront fees involved in the investment. This includes the closing, offering, and holding costs, plus the Arrived sourcing fee. Keep in mind that Arrived investments are designed for an investment period of at least five years. Accordingly, we structure these costs so that the Share Price reflects the prorated fees through that five-year period.

Reducing cash reserves from starting operations and servicing loans can initially negatively impact the share valuation. The Share Price value may go up or down, and the actual investment returns will largely depend on the property’s eventual sale price at the end of the investment period.

Share Price values are updated beginning 6+ months (Single-Family Residential) or 12+ months (Vacation Rental) after initial property funding at the next quarterly update. After that point, share prices are updated each quarter going forward.

To learn more about share prices:

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