EquityMultiple uses crowdfunding to offer accredited investors an opportunity to invest in a pool of properties (like a REIT), individual commercial properties, or real estate notes.
This real estate crowdfunding platform is great for:
- Investors who want a single real estate investment platform for multiple investments
- Those seeking diversification
- Flexibility of investment
- Low cost-of-entry for higher-yielding investments
EquityMultiple At A Glance
|Fees||Between .5% and 1.5%, depending on the investment type|
|Minimum Investment||$5,000 for notes, $10,000 for direct investment, $20,000 for poolsAccount Fees: Between $30 – $70 per year|
|Investment Options||Fund Investment (multiple assets with debt, equity, and CRE Securities), Direct Investment (single asset), Short Term Notes (3-9 months per note)|
|Redemption Options||Fund Investment has a target duration of 1.5 to 10 years; Direct Investing is 6 months to 5 years; Notes are 3 – 9 months|
|Customer Support||available from 9am to 6pm EST|
|Transparency||All disclosures are available for download from the EquityMultiple website|
External EquityMultiple Review & Ratings
|Retire Before Dad||4.6|
What Is EquityMultiple?
EquityMultiple tries to “level the playing field for individual investors” by offering multiple investment opportunities through a single platform. These opportunities include investment in a pool of commercial properties, co-investment in individual properties, or investment in short-term notes secured by real property.
The crowdfunding aspect of their offering comes from the opportunity to invest in professionally-managed commercial real estate for as little as $10,000.
EquityMultiple also provides a way to diversify your portfolio in a “one-stop shop.” Investors can choose from multiple pools or varied individual properties for investment. Each offering is structured either as debt, preferred equity, or common equity.
Click for EquityMultiple pricing and details.
How EquityMultiple Started
EquityMultiple is the brainchild of Charles Clinton and Marious Sjulsen, who have over 30 years in CRE investments for both institutional investment firms and private investment consultants.
Clinton & Sjulsen started EquityMultiple to provide more choices in commercial RE investment than what could be found in REITs.
A Unique Advantage
One of the things that give EquityMultiple a unique advantage over competing services is its backer, Mission Capital. Several of this national real estate capital markets firm’s senior executives have personally invested in the company, meaning they have skin in the game. Mission Capital itself provides investing insights, strategies, and leads to EquityMultiple via its diverse network of lenders, investors, and sponsors. This enables the company to expand faster than it would be able to on its own.
Who is EquityMultiple for?
EquityMultiple is designed for long-term investors with prior real estate experience, although it does offer short-term opportunities for debt investors as well. The company doesn’t offer any individual investments to non-accredited investors; all of its offerings are for accredited investors only.
Currently, the EquityMultiple website hosts a wide variety of asset classes, debt deals, preferred equity deals, common equity investments, senior debt deals, and other investing opportunities. Investors can choose to make a single investment or spread their capital out across multiple investments. However, it’s important to note that each deal will have its own minimum deposit requirements, as well as an offer-specific projected rate of return.
EquityMultiple Investment Options
EquityMultiple provides three different core investment options: Fund Investing, Direct Investing, and Savings Alternative.
Fund investing is the closest thing to a traditional REIT. The fund consists of multiple assets with built-in diversity. The strategies include Debt, Equity, Opportunity Funds, and CRE Securities.
Direct Investing is like it sounds: direct, fractional investment in a single commercial property. EquityMultiple offers the opportunity, and once enough individual investors have contributed, the investment begins. Each offering has different projected returns and exit strategies.
“Saving Alternative” is another name for investing in notes. Capital is pooled and used to fund short-term notes secured by real estate assets. These notes provide passive interest income.
EquityMultiple is very upfront about the fact that the real estate investment market isn’t a sure thing. They make sure that all investors are aware they may lose money with their investment offerings and place great importance on staying within one’s own risk tolerance.
Nonetheless, EquityMultiple also does its best to provide adequate protection for investors across various types of deals. It does this through a combination of company-backed investments, protective business structuring, and contracts.
For short-term notes specifically, EquityMultiple personally backs your investment(s). If things turn sour and your investment falls through, the company uses its own real-estate holdings to offer First-Loss Protection. These diversified notes are the company’s most liquid offering, redeemable after 3, 6, or 9 months. You won’t be charged any fees; you’ll only be required to deposit a minimum of $5,000. The note(s) will generate interest throughout the term length.
For all investments, EquityMultiple creates a deal-specific LLC. Investing in a deal turns you into a partial owner of the LLC, which entitles you to both the gains and losses of that particular deal. By incorporating a Limited Liability Company into the investment process, EquityMultiple is able to shield investors from any financial issues that may arise.
The minimum investment is $5,000 for notes (“Saving Alternative”), $10,000 for Direct Investment, and $20,000 for Fund Investment.
EquityMultiple’s website provides a listing of both previous investments and current real estate deals. Some past offerings include luxury condos in Brooklyn, Class-A multifamily in Houston, and even campsites and storage facilities.
Access to current offerings is available by signing up on EquityMultiple’s website.
EquityMultiple has a historic annual rate of return of 17.4%. This return is an average across all its offerings – Funds, Direct, and Savings Alternative (notes).
- EquityMultiple has invested over $427 million so far
- They estimate their total project value to exceed $4.22 billion
- EquityMultiple calculates its current weighted average net internal rate of return at 18.7% across all realized investments
- Annual returns for investors have increased every year since the company was founded, providing an excellent real estate experience for investors
- Gross distributions exceed $240.3 million (as of 2022)
How to Join EquityMultiple
Potential investors interested in taking advantage of the wide variety of investment options on EquityMultiple will need to register for the website. To begin, the website will ask for your email address.
From here, you’ll need to choose a password and then provide some basic information (first name, last name, residence status, and how you heard about the service). Once this has been completed, you’ll be required to verify your email address before moving on to the next step.
After you’ve verified your email, it’s time to verify your status as an accredited investor. Assuming you meet the annual income, net worth, or other qualifiers, you’ll have to provide a bit of additional information before you’ll be able to start viewing real estate projects and opportunities.
There are many different project types, debt deals, and individual investments for you to consider on EquityMultiple. Before committing to and funding any type of investment, you’ll want to closely review the terms of the contract.
Fortunately, EquityMultiple provides debt investors with all the relevant details about the offering, including investment property information, the potential return rate, investment objectives, and any applicable fees for investors.
Strengths, Weaknesses, and Exciting Possibilities
EquityMultiple is a commercial real estate investment firm that provides accredited investors a technology platform that allows access to private real estate opportunities that are professionally managed. This includes investment across a variety of property types and risk profiles.
We like the idea of a “one-stop shop” to provide diversity in commercial real estate investment. Their platform also allows self-directed investors more transparency than most traditional REITs. All of this for as little as $10,000 for property investment, or $5,000 for note investment.
EquityMultiple has an in-house underwriting team that provides extensive research, which in turn leads to a seamless investing process. Though we wish the platform wasn’t exclusively for accredited investors, it does allow these investors to participate in real estate funds and direct real estate transactions alongside experienced sponsors and lenders.
The downside we see is liquidity. Shares in conventional REITs can be bought and sold on the open market in many cases, whereas most investments with EquityMultiple are not as liquid. Though the notes are somewhat of an exception, but only in the respect that investment is very short-term.
Whether you have a question about an origination fee or the past average return, EquityMutiple’s dedicated customer support staff is always happy to help. While there is plenty of information about annual returns, historical performance, and applicable fees for investors available on the website, sometimes it’s just easier to talk to a real person. You can reach them via phone, by email, or through the chat function on the website.
- Phone service is available from 6 AM to 9 PM, Eastern Standard Time
- General questions can be sent to “email@example.com”; customer support questions should be directed to “firstname.lastname@example.org”
- You can always reach a customer support agent by using the “Chat” function on the website. These agents are available 24/7.
EquityMultiple strikes us as the type of real investment platform that would inevitably be created one way or another. It’s a simplified way to get into commercial real estate investment, create a diversified portfolio, and leverage the power of crowdfunding all in one.
It’s also the kind of investment platform that a beginner RE investor can “grow into.” Investments are laid out in a simple, easy-to-understand way, with all the heavy lifting of due diligence having already been done.
It’s a little unfortunate that the investments aren’t very liquid. That said, liquidity isn’t one of the big draws of real estate – it’s the returns. You can find greater liquidity in REITs (including the crowdfunded REITs), but you also run the risk of having your investment be more closely tied to stock and bond market fluctuations in a conventional REIT.
Perhaps best of all, EquityMultiple is a great way to start investing in commercial real estate deals through your self-directed IRA. With as little as $35,000, you can diversify your investment across three separate real estate opportunities, without having to fill out three separate investment packets across three separate companies.
Click for EquityMultiple pricing and details.