Individuals can gain exposure to real estate through crowdfunding, which is often only available to institutional investors. Crowdfunding sites and other real estate investment platforms connect individual investors who want exposure to the real estate market without taking on the responsibilities of property ownership with developers and other real estate professionals.
Despite the dangers, real estate crowdfunding can be a great way to diversify your portfolio and earn above-average returns. By considering factors like user-friendliness, platform availability, investment requirements, and overall transparency, we were able to narrow the field from over two dozen platforms down to just a handful. Here are some of the best crowdfunding platforms available for purchasing a property.
CrowdStreet
On the CrowdStreet platform, investments have been made by over 100,000 people from all 50 states.
Its cutting-edge method provides easy entry to a diversified portfolio of verified high-quality real estate investments suitable for institutional investors. Accredited investors have the option of investing in either individual properties or funds.
The Portland, Oregon-based company was established in 2014 and has released more than 540 investment opportunities in commercial real estate.
Pros
- Friendly interface with a useful bot assistant
- professional-grade products and services
- Once you create a free account, access to investment information is simple.
Cons
- All investments are restricted to those with sufficient experience and knowledge.
- Minimum investments are very high.
- There will be no withdrawals before the agreed-upon date.
DiversyFund
When it comes to crowdfunding for real estate, DiversyFund is the only game in town. Instead of acting as a middleman between investors and projects, DiversyFund acquires, develops, and maintains a diversified portfolio of real estate assets, then distributes the cash flow and profits to its investors. It's free of administration and broker costs, setting it apart from other crowdfunding platforms. The DiversyFund Growth REIT is currently accepting new $500 minimum investments.
Pros
- To protect their capital, investors are not charged any management fees.
- It's one of the rare sites that offer a mobile app.
- Cheap starting capital
Cons
- Fewer investment options
- Wait to cash out.
- Investment payout after the term
EquityMultiple
In addition to providing equity, preferred equity, and senior loan investments, EquityMultiple primarily targets institutional and commercial real estate. The firm now offers Opportunity Zone and 1031 exchange investments and fund products that take advantage of these tax breaks. Payment intervals might be as seldom as monthly or as lengthy as quarterly, depending on the terms of the transaction.
Pros
- Appropriately picking investments
- Multiple target-hold intervals
- User-friendly interface
Cons
- All investments are restricted to those with sufficient experience and knowledge.
- The minimum investment is high
- Reduced potential for recoupment
Fundrise
Fundrise, which began operations in 2012, has invested more than $5 billion in U.S. real estate since its inception. Presently, it oversees stock worth over $1.5 billion for more than 170,000 clients.
You can choose from five account tiers on Fundrise: Starter, Basic, Core, Advanced, and Premium. Each tier requires a different minimum commitment and offers different investment options and returns.
Pros
- No formal training is necessary.
- Popular and highly-rated smartphone application
- Redemption requests can be submitted at any time (possible fees and redemption not guaranteed)
Cons
- Dividends that are not taxed
PeerStreet
PeerStreet is a platform where accredited investors can purchase high-quality private real estate loans online. You can see how it functions below: The money you put up allows real estate investors to lend money to those who need it, and then PeerStreet collects the monthly payments from the borrowers and pays you a cut.
Pros
- Investment property platform with a special feature
- Diversification according to several dimensions
- In addition to the low-interest rate risk, loan terms of up to 36 months also limit repayment risk.
Cons
- All investments are restricted to those with sufficient experience and knowledge.
- Provides only debt investments
- with higher danger than other forms of crowdfunding
RealtyMogul
More than 219,000 investors have signed up with RealtyMogul since the company launched in 2012 to gain access to RealtyMogul's REITs and private market offers. The organization is well-respected for its thorough due diligence procedures, which include personally inspecting every possible property and analyzing every contract with in-house developed tools and models.
Pros
- Appropriately picking investments
- Careful research and preparation
- Automatic real estate investment trusts (REITs) investment beginning at $250/month
Cons
- There are a variety of costs associated with various investments.
- Speculative investments that are difficult to liquidate
- There are some very long hold times
