Is EquityMultiple The Best Fractional Real Estate Investing Company?

Jeremy BiberdorfBy: Jeremy Biberdorf

October 22, 2023October 22, 2023

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Real estate has long been a cherished avenue for investment. Yet, soaring median home prices have put homeownership out of reach for many, including single-earner and even high-earning households lacking an initial down payment. This affordability challenge has paved the way for fractional real estate investing, an innovative approach that combines modern technology and finance, providing an opportunity for a broader spectrum of investors to access the property market.

At its core, fractional real estate investing mirrors the principle of crowdfunding. Just as platforms like Kickstarter unite supporters to fund a specific project or idea, fractional real estate investing gathers investors to collectively finance and benefit from properties. Instead of fully owning an asset, each investor holds a fraction of it.

Consider platforms like EquityMultiple, which seamlessly marries traditional real estate strategies with fractional investing. It enables individuals to dive into pooled or individual commercial property investments, or even notes, with a starting amount of as low as $5,000.

As the  fractional real estate investing scene continues to expand, it’s essential to understand its nuances and evaluate platforms to find the right fit for your financial aspirations. Continue reading this EquityMultiple review to determine for yourself if it is the best fractional Real Estate investing company for your unique needs.
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What is Fractional Real Estate Investing?

Fractional real estate investing, allows individuals to invest in property without purchasing it outright. This approach employs digital platforms to gather funds from numerous investors, giving them a stake in real estate assets such residential houses, commercial properties or Real Estate Investment Trusts (REITs).

What sets today’s fractional real estate investing apart from traditional pooled property investments is its accessibility. In the past, collective property investments often involved groups of acquaintances or family members. Now, with the rise of online platforms, even a small sum, sometimes as modest as $250, can grant someone a slice of the real estate pie.

Furthermore, this contemporary approach to real estate investing removes the element of familiarity. Unlike traditional methods, where people usually invested with those they knew, fractional investing platforms allow individuals to invest alongside a diverse group of strangers. This can be beneficial, as most of us know family and/of friends that have had their relationships destroyed because of their business dealings.

Essentially, it’s a revamped version of community investing, making real estate more attainable for a broader range of people.

What is EquityMultiple?

EquityMultiple is a New York City-based fractional real estate investing platform founded by Marious Sjulsen and Charles Clinton in 2015. Targeted at accredited investors, it offers access to professionally curated, private real estate deals spanning various property types and risk categories.

Their primary goal is to simplify, democratize, and add transparency to the realm of real estate investments. With an impressive track record, by March 2023, the platform had facilitated investments amounting to over $475M from its vast investor community, returning more than $298M to them.

Combining their innovative tech platform with deep real estate expertise, they have participated in projects totaling more than $3.2 billion in commercial real estate transactions, marking their presence in the industry.

What Types Of Real Estate Does Equity Multiple Invest In?

EquityMultiple is a platform specializing in fractional real estate investing, primarily in the commercial real estate sector. For individuals keen on real estate investments without the hassles of direct property ownership, EquityMultiple emerges as a potential option.

The platform offers diverse commercial real estate assets ranging from multifamily residences and office spaces to more niche sectors like data centers, car washes, and medical office buildings. Additional properties they invest in encompass industrial sites, self-storage units, retail spaces, mixed-use properties, hospitality venues, and student housing.

EquityMultiple’s offerings include equity, preferred equity, and senior debt within the institutional commercial real estate industry. Notably, they don’t dabble in standard offerings like REITs, stocks, bonds, ETFs, or mutual funds.

Minimum Investment and Fees

At EquityMultiple, getting started with fractional real estate investing is tailored to be flexible yet straightforward. If you’re keen on diving in, the initial investment begins at a modest $5,000.

However, the specifics can vary based on the project’s intricacies and its sponsor, with typical entry points ranging from $10,000 to $30,000. Want to go a bit above the minimum? Not a problem! You can conveniently purchase additional shares, usually in increments of $5,000.

As for the fees, it’s all transparent and depends on your choice of investment. If you lean towards equity investments, the fees hover between 0.5% and 1.5%. On the other hand, debt or preferred equity investments come at a standard fee of around 1%. Fund-related fees? Those differ based on the specific fund but rest assured, they’re presented upfront so there are no surprises.

To keep things running smoothly, there’s a nominal annual administrative fee, which is anywhere between $30 and $70. All in all, EquityMultiple ensures a balanced blend of flexibility and clarity in its investment structure.

Is EquityMultiple The Best Fractional Real Estate Investing Company?

Answering the question, Is EquityMultiple the best fractional real estate investing company, isn’t a one-size-fits-all decision. It’s essential to make sure the platform’s offerings match your personal financial aspirations and risk capacity. EquityMultiple stands out for its emphasis on catering to long-term investors, especially those already familiar with real estate intricacies.

However, a noteworthy aspect is its exclusivity: only accredited investors can access its individual investment opportunities. But is EquityMultiple trustworthy? Absolutely. They have a commendable presence in the market, being linked with over $3.2 billion in commercial real estate transactions. By the end of 2022, they reported a total historical return rate of 17.0%.

They have successfully distributed more than $298 million back to their investors. Being a registered investment advisor governed by SEC regulations further establishes their legitimacy and commitment to industry standards.

To learn more about EquityMultiple or get started today, Click Here.
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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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