The global real estate crowdfunding market was $10.78 billion (USD) in 2021, and forecasts suggest it’ll increase at a compound annual growth rate (CAGR) of 45.6% from 2022-2030
By pooling money with other investors, you can partake in larger real estate projects previously beyond your reach. An abundance of real estate crowdfunding apps is making investing even easier, allowing investors to browse and join in on projects from the convenience of their mobile devices.
Here are the 10 best crowdfunding real estate platforms out there and the features that make them unique.
Arrived purchases single-family rental and then offers investors fractional shares in them. You can get started on Arrived with as little as $100 and enjoy returns in appreciation and quarterly rental income. The company also has a straightforward fee structure: a yearly 1% asset management fee.
With the advent of companies like Airbnb and VRBO, the vacation rental industry is hot right now. It’s projected to hit $20 billion by 2025. Also, these properties typically earn 130% more revenue than their traditional long-term counterparts.
When using Arrived, you can benefit from favorable real estate tax rules and can invest between $100 and $20,000 per house. We recommend diversifying your portfolio to determine which markets are working best for you.
CrowdStreet is an online marketplace for accredited investors*, giving you access to all sorts of investment opportunities across a spectrum of asset classes and risk profiles. Each investment opportunity is thoroughly vetted and provides investors with a treasure trove of important information about a property before investing.
To date, CrowdStreet has funded more than 752 deals, totaling $4+ billion invested. They’re also famous for consistently delivering strong returns for their investors, with 19.2% in realized IRR and average hold periods of 3-5 years. The downside: You usually need at least $25,000 to buy into most of CrowdStreet’s deals and real estate investment trusts (REITs).
*Accredited investors are investors who meet one of the two following criteria: 1) their net worth is over $1 million (this doesn’t include private residence equity), or 2) they have an annual income of $200,000+ for each of the last two years ($300,000 if you’re married and filing jointly), and will reach that threshold again.
CityVest offers accredited investors the opportunity to invest in institutional real estate deals starting with a minimum of $25,000. Investor minimums for these types of investment funds are usually $1 million or more. By lowering the barrier to entry, CityVest is allowing many more investors to enjoy the stable returns these investments provide (usually around 15% or more).
CityVest works exclusively with institutional funds that employ administrators and auditors. Every offering undergoes third-party due diligence to verify the investment manager’s information and make the investment as secure as possible.
If you don’t have $25,000 lying around to crowdfund with CrowdStreet or CityVest, don’t worry! With Fundrise, you can start investing with as little as $10. Fundrise is “America’s largest direct-to-consumer private markets manager,” with over 1,769,000 registered investors as of the end of 2022.
Fundrise allows real estate investors to choose from a variety of investment opportunities, including single-family units, multifamily complexes, industrial properties, and more. They also have a transparent fee structure: 0.85% annual asset management fee.
Also, signing up on Fundrise is really easy. All you have to do is answer a few simple questions, and then the app will suggest an investment strategy that best aligns with your goals.
One of the downsides of crowdfunding is its illiquidity. It’s common for investments to take five years or longer before your asset is liquidated. With Groundfloor, the average investment is repaid in 4-12 months.
Instead of crowdfunding to invest in properties, Groundfloor invests in high-yield real estate-secured debt. Groundfloor is a hard money lender that issues fix-and-flip loans to other real estate investors. Once the borrower finances or sells the property, you recoup your investment with interest, consistently yielding 10%+ over the last six years. Of course, it’s always possible that an investor will default on their loan, so minimize your risk by investing small amounts in a bunch of loans.
Your investment threshold starts at a minimum of $10, so if you have $100 to spare, you can invest $10 in ten different loans if you’d like!
Concreit also specializes in short-term real estate-secured loans. Because of their loans’ short timelines, Concreit has plenty of liquidity and allows you to pull your money out anytime. However, there are three reasons why you won’t want to do that:
- Concreit pays a fixed annual dividend yield of 5.5%, but you receive it in weekly payments, so your money compounds quickly.
- If you withdraw your money within the first year, you’ll be penalized 20% of your dividend payout (there’s no withdrawal penalty on your principal).
- Receiving your funds can take 30-60 days, so if you need emergency funds, your Concreit money may not hit your bank in time.
You can start investing with Concreit for just $1.
RealtyMogul pools REITs that buy and manage various commercial real estate investment opportunities, including retail, multifamily, office, and ground-up development. Since their inception, they’ve grown to over 274,000 members, have made 35,300 investments, and gained exposure to $5.9+ billion nationwide. They also have access to dozens of markets across the U.S.
They have two REITs for non-accredited investors: The Income REIT and The Apartment Growth REIT.
|The Income REIT||The Apartment Growth REIT|
|Focus:||Higher dividends||Long-term appreciation|
Streitwise runs a “professionally-managed, tax-advantaged portfolio of real estate assets,” emphasizing transparency. The company’s founders have over $5 million invested in the company, and REIT offers investors a diversified portfolio of “stable institutional-quality commercial builders.” In 2022, their distribution average was 7.8%.
Streitwise is available to accredited and non-accredited investors, with a minimum required investment of $4,400. Much like many other crowdfunding real estate apps on this list, this is a long-term investment, so be prepared to leave your money in the pool for five years or longer.
YieldStreet lets you invest in a broad range of highly-vetted investment opportunities. They specialize in alternative investing, so not only can you invest in real estate, but also:
- Legal finance
- Consumer loans
- Commercial loans
- Vehicle loans
- NFTs and crypto
While more of their opportunities are only open to accredited investors, YieldStreet’s Prism Fund is available to everyone. The fund includes a combination of the investments listed above. However, you need a minimum of $5,000 to invest.
Yieldstreet also has a Growth and Income REIT, which is also open to non-accredited investors. This includes three multifamily properties in Atlanta, Tucson, and Dallas-Fort Worth.
DiversyFund’s minimum buy-in is $500. They own their properties outright, meaning that you don’t have to worry about the hefty commission fees you’ll come across on other crowdfunding apps.
DiversyFund’s goal is growth, so they’re reinvesting their profits into new properties to expand their portfolio quickly. They estimate that they can deliver returns of 10%-20% per year, which is impressive if they can pull it off.
Unfortunately, investors won’t be receiving dividends from DiversyFund any time soon. Instead, you’ll have to rely on appreciation and growth to deliver long-term returns in five years or more.
While we’ve highlighted ten of the best crowdfunding real estate apps, there are several more to consider, depending on your interests and investment strategy. For example, if you’re interested in farmland, AcreTrader vetted properties from the Carolinas to California and delivered an average annual return of 11%. If you’re looking for a company that combines traditional real estate and crowdfunding strategies, check out EquityMultiple.
And, of course, you can always turn to the BiggerPockets forums for help. Our forums give you access to the largest real estate investing community around, and there’s no shortage of active real estate crowdfunding investors looking to help.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
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