Real estate has long been considered one of the best assets for building long-term wealth. However, investing in physical real estate requires large amounts of capital, which puts it out of reach for many Americans. Fortunately, real estate crowdfunding now allows both accredited and non-accredited investors to earn passive income from real estate with much lower minimum investment amounts.
Read on to discover 11 top-rated platforms where you can invest in crowdfunding real estate.
Founded in 2010, Fundrise has financed more than $7 billion in commercial real estate assets and manages $2.87 billion in equity for 385,000 investors. Investors can start with as little as $10 and earn dividend income from Fundrise's portfolio of apartments, hotels, and commercial buildings nationwide. The platform predicts long-term returns of 7-12%.
Target audience: Investors who want to invest small amounts of money.
Fees: 0.15% annual advisory fee. There is a separate asset management fee of 0.85% for the fund.
With nearly 300,000 members, RealtyMogul offers one of the most popular real estate crowdfunding platforms. Accredited investors can invest in individual transactions. Non-accredited investors can choose from publicly traded, non-traded REITs and private real estate funds with minimum amounts of $5,000. RealtyMogul thoroughly scrutinizes each deal and achieves an average annual realized return of 4.5% to 6% for REITs and 18.7% for equity investments.
Fees: There are no fees to use the platform, and there are no direct fees for investing in RealtyMogul. Investment fees vary by REIT and individual real estate transaction
Account minimum: $5,000 for REITs. $25,000 for personal real estate investment
Groundfloor offers investments in short-term real estate loans with regular monthly interest payments. Ground Floor funds modification projects, new construction, and more across 43 states. Investors can start with a minimum investment of $100. Groundfloor expects returns of 8% to 15%, with an average return of 10%.
Target audience: Small investors who want to diversify their portfolio.
Fees: There are no fees for investors
Account minimum: $100
Strong Points:
Low minimum investment amount
Unique opportunities such as real estate debt installments
Convenient automatic investing
A shorter-term investment than many platforms offer
Cons:
Promotion: Currently not available
EquityMultiple focuses exclusively on commercial real estate equity transactions available to accredited investors. We provide institutional quality office, retail, industrial and multifamily real estate for veterans in the nation's top markets. Minimum investment starts at $5,000. The EquityMultiple project targets annual returns of 7% to -15% for its products.
Target audience: Serious investors who want to maintain liquidity.
Fees: 0.50% to 1.50% for common stocks. Debt and preferred stock is approximately 1%. Various origination fees for the fund. Management fees of $30 to $70 for all investors
Account minimum: $5,000
Strong Points:
Cons:
Promotion: Currently not available
DiversyFund makes commercial real estate ownership easier through a multifamily fund targeting undervalued multifamily properties. Targeting 12 to 15 investments, the fund has a holding period of four to six years and is available to accredited and non-accredited investors. Its portfolio includes multifamily, industrial, and commercial real estate, and you can invest for as little as $500 per month or a one-time payment of $25,000. As of November 1, the platform also has two opportunities for accredited investors.
Who: Accredited and non-accredited investors who plan to invest at least $500 per month.
Price: Must be a member to review
Account minimum: $500 in monthly payments.
Strong Points:
A monthly minimum of $500 is more affordable than a one-time minimum of $25,000
Non-accredited investors can also participate
Cons:
Only one fund is currently open to investors
There are no distributions until the Fund begins selling real estate.
There is no phone support. Email support may take up to 72 hours to respond
Promotion: Currently not available
AcreTrader offers farmland investments to accredited investors. The company's farmland portfolio is diversified across crop types and geographic regions to reduce risk. The minimum price of the current offer is $15,000. AcreTrader projects to date have delivered realized returns of 13.7% to 23.3% with lower than expected hold periods.
Similarly, FarmTogether allows individuals to invest in sustainable farmland. Each deal is thoroughly scrutinized and aims to provide investors with annual returns ranging from 6% to 11% over 5 to 10 years. To offer, you must have accredited investor status with a minimum investment of $15,000 (crowdfunding investments) to $20 million.
Target audience: Accredited investors interested in sustainable investing.
Price: Varies depending on the occasion
Account minimum: $15,000
Strong Points:
Cons:
Promotion: Currently not available
Trinity Investors partners with developers on new construction and renovation projects. The assets span the full range of commercial uses, from multifamily housing to office, retail, healthcare, hospitality, senior housing, and more. The average holding period for investments is 47 months, and the company's historical cumulative realized return is 19.4%. Investments in this crowdfunding real estate platform typically start at $75,000 and are only open to accredited investors.
Target audience: High-net-worth investors who can wait longer holding periods in exchange for higher returns.
Fees: 0.25% on assets up to $10 million. Other fees may apply
Account minimum: $75,000 to $100,000 (depending on investment)
Strong Points:
large portfolio
solid net income
Cons:
Promotion: Currently not available
CrowdStreet is one of the largest real estate crowdfunding platforms, with more than $4 billion invested in approximately 800 projects. Offerings include equity and debt investments in commercial real estate and real estate companies, with minimum amounts starting at $25,000. To date, transactions realized on CrowdStreet have achieved a total return of 12.2%. The target holding period is 3 to 5 years.
Target audience: Accredited investors who do not require liquidity.
Fees: CrowdStreet generally does not charge fees for using the Platform. Sponsor may charge a fee. Various advisory fees for funds
Account minimum: $25,000
Strong Points:
Cons:
Promotion: Currently not available
ArborCrowd is the first real estate institutional real estate investment crowdfunding platform, with a particular focus on investing in multifamily properties in many of the fastest growing U.S. housing markets. Their services require accredited investor status with a minimum of $25,000 to $50,000. Net returns are expected to be between 12% and 23%, with current holding periods of 3 to 5 years.
Target audience: Accredited investors who are strictly interested in multifamily properties.
Pricing: Varies by project. You must register an account to view prices
Account minimum: $25,000
Strong Points:
Cons:
Promotion: Currently not available
Streitwise allows non-accredited investors to invest in commercial real estate through public non-traded REITS. The minimum investment for the offering is as low as $1,000. Straightwise thoroughly scrutinizes the properties we purchase and has an average dividend of 8.3%.
Target audience: Non-accredited investors looking for low minimum investment amounts.
Commission: 2% commission, deducted from dividends
Account minimum: $1,000
Strong Points:
Cons:
Promotion: Currently not available
Real estate crowdfunding has made it possible for ordinary investors to earn passive income from an asset class that was previously only accessible to the ultra-wealthy. By pooling money with others to invest in vetted real estate projects, Americans can build greater long-term wealth through increased cash flow and value. Be careful not to spend more on crowdfunded real estate investments than you can afford to lose.
Details of GOBankingRates
This article originally appeared on GOBankingRates.com: 11 Best Real Estate Crowdfunding Platforms
