Best Real Estate Crowdfunding Platforms


Jeremy BiberdorfBy: Jeremy Biberdorf

July 10, 2022July 10, 2022

Real estate investment does not have to be daunting. There are easier and straightforward ways to add real estate to your portfolio if you want to avoid carrying out extensive real estate research. This is possible because of real estate crowdfunding platforms. You can diversify your portfolio by adding commercial properties, residential properties, and other real estate investments at a low cost.

In this article, we’ve compiled a list of the best real estate investing platforms to help narrow down your options. Continue reading to find the best match for you.

1. RealtyMogul: Best for Income Investors

RealtyMogul

FeesMinimum investmentAverage annual returnsTotal investor distributionsInvestment optionsAccredited investors only
1% to 1.5%$1,0004.5% to 8%$136 million
  • 1031 exchanges.
  • Individual properties (office, self-storage, multifamily, medical office, industrial, retail).
  • Real estate investment trusts (REITs)
 No

 

More than 219,000 investors have joined RealtyMogul since its inception in 2012 to gain access to its real estate investment trusts (REITs) and private market offerings. RealtyMogul is known for its exceptional due diligence, as it personally assesses every potential real estate and scrutinizes each deal using proprietary models and methods.

This crowdfunded real estate platform looks for well-leased properties or existing leases. It only works with real estate partners with experience managing assets and a proven track record. It does not make non-cash-flowing investments like ground-up construction or raw land. Investors can select one of the three goals: diversification, growth, and passive income.

Pros

  • RealtyMogul has a good investment selection
  • Detailed due diligence
  • Monthly auto-investment in real estate investment trusts (REITs) starts at $250 per month

Cons

  • Each investment comes with different fees
  • Investments are difficult to sell or trade
  • Some extended hold periods

Get Started With RealtyMogul

2. CrowdStreet: Best for Accredited Investors

Crowdstreet

FeesMinimum investmentAverage annual returnsTotal investor distributionsInvestment optionsAccredited investors only
CrowdStreet funds: 0.50% to 2.5%. Other fees vary by offering$25,000As of 2021, it was 17.3%. Generally, it depends on the investment$220 million
  • Individual deals.
  • Funds.
  • A professionally managed, tailored portfolio
 Yes

has attracted over 100,000 investors from across the United States. Its innovative technique provides direct access to a carefully vetted portfolio of real estate investments with a high-quality organized establishment. Accredited investors can choose to invest in a single property or a fund.

Crowdstreet, founded in 2014 and headquartered in Portland, Oregon, has published over 550 commercial real estate investment offerings. 63 of those commercial real estate investment offerings have been fully realized.

Pros

  • With its helpful chatbot feature, Crowdstreet is a user-friendly platform
  • Easily accessible investment details upon signing up for a free account
  • Institutional-quality offerings

Cons

  • Open to accredited investors
  • High investment minimums
  • It doesn’t support early withdrawals

Get Started With CrowdStreet

3. EquityMultiple

EquityMultiple

FeesMinimum investmentAverage annual returnsTotal investor distributionsInvestment optionsAccredited investors only
Equity investments have a 1% fee. Other fees are determined by offering$10,000Historically, 16.8%$126.7 million
  • 1031 exchange investment.
  • Preferred equity and senior debt.
  • Institutional commercial real estate.
 Yes

EquityMultiple is a crowdfunded real estate platform that focuses almost solely on commercial and institutional real estate and also provides preferred equity, senior debt, and equity investments. EquityMultiple recently expanded its portfolio with tax-advantaged real estate investments (1031 exchange and Opportunity Zone) and fund products. The deal’s distribution frequency varies but is usually monthly or quarterly.

Pros

  • It has a good investment selection
  • Assortment of target hold periods
  • It is an easy-to-use, crowdfunded real estate platform

Cons

  • Available only to accredited investors
  • High minimum investment
  • Redemption options are limited

Get Started With EquityMultiple

4. Yieldstreet: Best for Real Estate and Alternative Investments

Yieldstreet

FeesMinimum investmentAverage annual returnsTotal investor distributionsInvestment optionsAccredited investors only
For Prism, the fees are 1% to 2%. Other investments start at 0%

 

$500. Some investments require an initial investment of $10,000. $1,000 minimum investment is required for Short-term note options9.71% average rate of return$100 million
  • Short-term notes options.
  • Alternative investments.
  • Multi-asset class funds.
 No

provides alternative investments and real estate to accredited investors with a minimum investment of $500. The company currently allows you to invest in the following alternative asset classes: real estate, marine finance, legal finance, art finance, and commercial and consumer finance.

But don’t be concerned if you’re not an accredited investor. The Yieldstreet Prism fund is still available for investment to non-accredited investors. This Prism fund also requires a minimum investment of $500. Still, it allows you to invest in various alternative asset classes.

Pros

  • It offers access to alternative investments such as lawsuits, real estate, art, debt, etc.
  • Privately structured credit deals are open to individuals investors
  • Non-accredited investors are welcome
  • Each investment is backed by tangible assets.
  • The platform is easy to use
  • It is possible to manage it online or via mobile apps

Cons

  • Investments are illiquid.
  • Only accredited investors have access to most of its investments
  • Relatively exorbitant fees
  • Customer ratings and Consumer complaints raise concerns

Get Started With Yieldstreet

5. First National Realty Partners

First National Realty Partners

FeesMinimum investmentAverage annual returnsTotal investor distributionsInvestment optionsAccredited investors only
Typically 0.50% to 1.5%$50,00012-18%$914 million
  • Real Estate
  • Individual deals
 Yes

is a real estate investment open only to accredited investors. It is a platform that enables investors to increase their wealth by investing in grocery-anchored commercial real estate. First National Realty Partners (FNRP) was founded in 2015. It is based in New Jersey. Opportunity Funds or Individual properties are available for investment. The holding period for the Opportunity Fund ranges from three to seven years.

Pros

  • It offers property acquisition criteria that are clear and consistent
  • Grocery chains and tenant relationships with major retail
  • It supports simple diversification of fund option

Cons

  • The minimum investment is relatively high
  • Available to accredited investors only
  • The website can be difficult to navigate

Get Started With First National Realty Partners

Understanding Real Estate Crowdfunding

Real estate crowdfunding allows individual investors to pool their resources together to invest in a real estate project. This has become a popular way for everyday investors, accredited and non-accredited, to build and diversify their real estate portfolio.

Accredited investors have traditionally had more access to real estate investment platforms due to stringent financial requirements. However, regulations have been eased to allow non-accredited investors to participate as well, breaking down the barrier to entry.

How Does It Work?

In the past, real estate investments were often limited to purchasing a primary residence, rental income properties, or investing in a private Real Estate Investment Trust (REIT). The advent of real estate crowdfunding has made it possible for retail investors to get into the game. It allows investors to choose a specific real estate project to invest in, rather than a company’s stock. This has made the real estate market more accessible and has provided a vast array of real estate investment opportunities for individual investors.

Investment Strategies

Each platform offers various investment strategies, such as commercial real estate, residential properties, and mixed-use properties. The type of investment you choose should align with your investment goals, whether that’s long-term growth, rental income, or short-term profits.

Investors receive returns from their investments through rental income, interest payments, or the appreciation of the real estate assets upon the sale of the property. Some platforms offer quarterly dividends, while others may distribute profits at the end of the investment term.

Risks and Returns

Like any investment, investing in real estate through crowdfunding platforms has its risks. Real estate is an illiquid investment, meaning it can take a long time to sell and convert to cash. While the stock market offers daily liquidity, that’s not the case with real estate investments.

However, the potential for high returns is attractive. A diversified portfolio of real estate investments can provide both income and capital appreciation. But remember, the higher the potential return, the higher the potential risk.

Fees and Minimums

Real estate crowdfunding platforms often have a fee structure that includes setup fees, annual asset management fees, and sometimes performance fees. Fees can vary greatly from one platform to another, so it’s crucial to understand the fee structure before investing.

Moreover, most platforms have minimum investment requirements, ranging from as low as $500 to as high as $50,000. This means they are accessible to a wide range of investors, from the beginner to the more experienced investor.

Who Can Invest?

As mentioned earlier, both accredited and non-accredited investors can participate in real estate crowdfunding. However, some platforms and individual investments are only open to accredited investors due to the risk and complexity involved.

Remember, while real estate crowdfunding has democratized access to real estate investment, it is not without risk. It’s essential to do your due diligence and consult with a financial advisor before making any significant investment decisions. With careful research and planning, real estate crowdfunding can be an excellent way to diversify your investment portfolio.

Conclusion

Hopefully, with all the information in this article, you can make a well-informed decision about the best Real Estate Crowdfunding platform for you.

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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