Best Real Estate Crowdfunding Sites In 2022
Posted in: Business, Finance, Real Estate

Best Real Estate Crowdfunding Sites In 2022

Real estate crowdfunding investment is a new method of investing in commercial real estate. Some real estate crowdfunding sites provide ordinary investors with access to assets that were previously reserved for the wealthy.

Individual investors who want exposure to real estate without the hassles of owning, financing, and managing properties can use real estate crowdfunding platforms, which connect developers and other real estate professionals with individual investors.

For investors, there are a number of excellent real estate crowdfunding platforms to choose from. Without the right knowledge, it’s easy to get lost in a sea of possibilities. You should consider the platform’s credibility, site functioning, customer service quality, and documentation when picking a real estate crowdfunding platform. You might want to go with a platform that serves as a broker-dealer rather than a listing service, and one that has dealt with real estate transactions before.

Make sure a real estate crowdfunding investment platform has strong venture capital support before making a decision. In most circumstances, your funds will be held on the platform for an extended period of time. You should make certain that the platform you select is trustworthy and will continue to operate for a long time.

Examine the platform’s due diligence process and ask all of the pertinent questions. Find out what kind of documents the platform collects before finalizing possible deals, and whether they, as companies, provide liability indemnities to investors in the event something goes wrong. In terms of customer service, check to see if the platform offers it and how good it is.

While real estate crowdfunding is inherently hazardous, it can help diversify your portfolio while also providing competitive returns. Given the enormous number of platforms, you’ll generally want to go with one that has been verified and vetted. In alphabetical order, here are the best real estate crowdfunding sites in 2022. They are.

Best Real Estate Crowdfunding Sites In 2022

Best Real Estate Crowdfunding Platforms

  • CrowdStreet
  • DiversyFund
  • EquityMultiple
  • Fundrise
  • PeerStreet
  • RealtyMogul

CrowdStreet

  • Fees: 0.50% to 2.5% for CrowdStreet funds; other fees vary by offering
  • Minimum Investment: $25,000
  • Average Annual Returns: 11.5% to 26.4%, depending on the investment
  • Total Investor Distributions: $135 million
  • Investment Options: Funds, individual deals, and a professionally managed, tailored portfolio
  • Accredited Investors Only: Yes
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The Crowdstreet platform has attracted more than 101,000 investors from around the United States. Its unique strategy provides direct access to a verified portfolio of institutional-grade real estate investments. Accredited investors have the option of investing in a single property or a fund.

The company, which was founded in 2014 and is based in Portland, Oregon, has published over 447 commercial real estate investment offerings. 33 of those offerings have been fully realized to date.

Pros

  • The platform is user-friendly and includes a helpful chatbot.
  • Institutional-quality offerings
  • It’s simple to find investment information (once you sign up for a free account)

Cons

  • Accredited investors only
  • Steep investment minimums
  • No early withdrawals

DiversyFund

  • Fees: 0%
  • Minimum Investment: $500
  • Average Annual Returns: 11% to 18%, depending on the investment
  • Total Investor Distributions: $135 million
  • Investment Options: Real Estate Investment Trusts (REITs)
  • Accredited Investors Only: No

DiversyFund’s model is one of a kind in the world of real estate crowdfunding. DiversyFund acquires, develops, and manages a portfolio of properties, collects cash flow, and divides earnings among its investors, rather than acting as a broker who connects investors with projects.

It does not charge any fees, unlike some other crowdsourcing services. Prior to the company’s initial public offering (IPO), you can invest in the DiversyFund Growth REIT ($500 minimum) or the DiversyFund platform ($25,000 minimum; accredited investors only) through Series A round investment ($25,000 minimum; accredited investors only).

Pros

Cons

  • Limited investment choices
  • No early withdrawals
  • You will be paid at the end of the investment period.

EquityMultiple

  • Fees: 0.5% on equity investments; other fees vary by offering
  • Minimum Investment: $10,000
  • Average Annual Returns: 13.7%
  • Total Investor Distributions: $24 million
  • Investment Options: Institutional commercial real estate; equity, preferred equity, and senior debt; Opportunity Zones, and 1031 exchange investments
  • Accredited Investors Only: Yes

EquityMultiple specializes nearly solely in institutional commercial real estate, as well as equity, preferred equity, and senior debt. The company recently expanded its offering to include tax-advantaged real estate investments (Opportunity Zone and 1031 exchange) as well as fund products. The frequency of distribution varies by deal, although it’s frequently monthly or quarterly.

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Pros

  • Good investment selection
  • Variety of target hold periods
  • Easy-to-use platform

Cons

  • Accredited investors only
  • Steep minimum investment
  • Limited redemption options
Best Real Estate Crowdfunding Sites In 2022

Fundrise

  • Fees: 1%
  • Minimum Investment: $1,000
  • Average Annual Returns: 8.7% to 12.4%, depending on the investment
  • Total Investor Distributions: $79 million
  • Investment Options: eREITs and eFUNDs
  • Accredited Investors Only: No

Fundrise has invested in more than $4 billion in real estate across the United States since its inception in 2012. Today, the firm oversees over $1 billion in assets on behalf of over 130,000 individual clients.

Core, Advanced, and Premium are the three account levels offered by Fundrise. At each level, there is a different minimum investment amount, as well as different investing strategies and potential profits. You can get your whole purchase price back if you redeem your shares within Fundrise’s 90-day introductory period.

Pros

  • No accreditation required
  • Well-rated mobile app
  • At any moment, you can request the redemption of your shares (possible fees and redemption not guaranteed)

Cons

  • Limited investment choices
  • Highly illiquid, privately traded REITs
  • Nonqualified dividends

PeerStreet

  • Fees: 0.25% to 1%
  • Minimum Investment: $1,000
  • Average Annual Returns: 6% to 12%
  • Total Investor Distributions: $175 million
  • Investment Options: Real estate debt
  • Accredited Investors Only: Yes

PeerStreet is a platform that allows qualified investors to invest in high-quality private real estate loans. The following is how it works: Your investment provides lenders with funds to lend to real estate borrowers, after which PeerStreet collects monthly payments from the borrowers and distributes a portion of those payments to you (the investor).

You may manually or automatically diversify your portfolio by including investments from different locations, lenders, borrowers, asset types, terms, loan-to-value (LTV) ratios, and rates.

Pros

  • Unique offering among real estate investment platforms
  • Diversification across various parameters
  • Because loans are only for a maximum of 24 months, there is low interest rate
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Cons

  • Accredited investors only
  • Only offers investments in debt
  • Riskier than some other types of crowdfunding
Best Real Estate Crowdfunding Sites In 2022

RealtyMogul

  • Fees: 1% to 1.5%
  • Minimum Investment: $5,000
  • Average Annual Returns: 4.5% to 8%
  • Total Investor Distributions: $160 million
  • Investment Options: REITs, individual properties (multifamily, office, industrial, self-storage, retail, and medical office), 1031 exchanges
  • Accredited Investors Only: No

More than 197,000 investors have joined RealtyMogul to have access to its REITs and private market offers since its debut in 2013. The organization is known for its thorough due diligence, which includes personally inspecting each possible property and scrutinizing each purchase using proprietary methods and models.

The company seeks for properties that are well-leased or have current leases, and it only works with real estate partners who have a track record of managing assets. It does not invest in non-cash-flowing assets such as raw land or development from the ground up. Investing goals can be divided into three categories: passive income, growth, and diversification.

Pros

  • Good investment selection
  • Thorough due diligence
  • Monthly auto-investing in REITs starting at $250 per month

Cons

  • Each investment has its own fee
  • Investments are difficult to sell or trade
  • Some long hold periods

Conclusion

Real estate crowdfunding is a method of obtaining funds for real estate projects. When developers come across investment prospects, they may not want to fund the full project with their own money (or they may not be able to). As a result, they turn to crowdsourcing to raise funds from private investors. Using this method, investors can invest in real estate without owning, financing, or managing properties.

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