If you don’t have the time, skills, or cash to own rental property, investing through a crowdfunded real estate site lets you own rental property without all the headaches.
In addition, your investment might earn a 12% yield while the average historical return for the broad stock market is approximately 8%.
This article will help you find the best crowdfunded real estate companies to help you choose a platform that is best for you.
In This Article
Top Crowdfunded Real Estate Websites
There are roughly 100 different crowdfunded real estate sites you can invest with, but that doesn’t mean they’re all excellent opportunities.
Before you give just any company your business, give the below recommendations a try.
You can also open an IRA with many of these companies, which can help minimize your tax bill.
DiversyFund is another crowdfunded real estate platform open to all investors. You can invest in both its private growth and income REITs.
The DiversyFund team is based in California and they invest in what they know best, commercial real estate.
You can invest in one of the DiversyFund REITs with a minimum $500 investment. Investing in individual properties requires a larger initial investment.
For fee information, see the DiversyFund website.
Trustpilot score: 3.5 out of 5
- Quick and easy setup
- No management fees
- Average 10% investment returns
Groundfloor allows both accredited and non-accredited investors too. This company focuses on debt investments instead of equity investments.
Borrowers borrow funds for refinancing or rehabbing residential real estate properties. The borrowed funds are invested through crowdfunded real estate fundraising.
Potential investments are graded A through G so investors can decide on the level of risk they want to take with their investment.
Most investments through Groundfloor are short-term–no longer than 12 to 18 months and sometimes even shorter.
Groundfloor has a minimum investment amount of just $10. And there are no fees for investing with Groundfloor.
The Groundfloor website says that the company’s average return on investment over the past six years is 10%.
Trustpilot score: 2.9 out of 5
- Rated Best Overall Crowdfunding Site 2021 by Investopedia
- Free account
- Makes it easy and simple to invest in real estate
CrowdStreet invests in commercial real estate, and most investments have a minimum $25,000 investment.
You might like CrowdStreet because it focuses solely on commercial real estate, as opposed to other platforms that also invest in residential properties.
This gives CrowdStreet the privilege of being one of the very few crowdfunded companies that let accredited investors invest directly in commercial real estate.
Although other crowdfunding platforms invest in commercial real estate, with them, you’re still investing through the lender or managing company.
Being a direct investor offers higher income potential, as you can easily find deals with a minimum projected yield of 20%.
Of course, it also means potentially higher risk since the investing company can’t use other investment assets to offset losses.
To your benefit, CrowdStreet has a current 5% acceptance rate for borrower applications. Most crowdfunded platforms have a 5% to 10% acceptance rate.
Trustpilot score: 3.7 out of 5
- Open to accredited and non-accredited investors
- Quick funding
- Deals are pre-vetted
RealtyMogul has a platform for accredited and non-accredited investors.
Accredited investors can invest in individual commercial and residential properties, which even include mobile home parks.
Another option for both accredited and non-accredited investors is to invest in one (or both) of RealtyMogul’s REITs.
The Income Reit (formerly MogulREIT I) focuses on debt investments that pay a fixed monthly dividend.
But if you can invest for at least three years, you might want to consider the Apartment Growth REIT (previously MogulREIT II).
It has more upside potential as investment properties appreciate in value and generate more income. But first, you must wait for property values to increase and sell for a profit.
The tradeoff is that you receive a smaller monthly dividend in the meantime.
The minimum initial investment for each REIT is $5,000. Subsequent investments must only be at least $1,000 at a time.
If you can invest $10,000, you might decide to split your cash into both REITs to diversify your holdings between debt and equity investments.
Plus, you’ll have a great mix of commercial and residential properties.
Both of these REITs are available in an IRA or a non-retirement account, too.
You can also invest in individual properties. Most new offerings have a $10,000 minimum investment.
Your potential returns can be higher than investing in a REIT. Unfortunately, the platform no longer supports 1031 exchanges like in the past.
Trustpilot score: 3.3 out of 5.0
YieldStreet is another impressive real estate platform for accredited investors. One exception is the Prism Fund which non-accredited investors can access.
Per their website, investments have an 8% to 20% target return.
All projects have a maturity date of between one and three years.
If you want to diversify your portfolio beyond commercial and residential real estate, you can also invest in these assets:
- Marine shipping vessels (boats and vessel deconstruction)
- Legal assets (Invest in legal expenses and receive payment when settlement is made.)
- Small business financing
Of course, you can also invest in regular residential and commercial offerings.
If you don’t want to invest in individual placements or you’re a non-accredited investor, consider the Yieldstreet Prism Fund. You get exposure to several assets, can receive an 8% dividend distribution and the minimum investment is $500.
Trustpilot score: 2.6 out of 5
If you’re a non-accredited investor, Fundrise might be your best option. Unlike other crowdfunding platforms, investors are welcome from all 50 states.
You only need to invest $10 to create your starter portfolio. Fundrise invests your money in a basket of commercial and residential properties located across the United States.
Some of the current property types include:
- Apartment development and renovation.
- Rent-stabilized apartments.
- Home construction.
- Commercial developments.
When your account balance reaches $5,000, you can begin investing in advanced plans that focus on a specific investing strategy:
- Supplemental income.
- Balanced investing.
- Long-term growth.
Investing in advanced plans lets you earn a potential annual dividend yield of up to 12%.
And, you don’t have the daily stock price fluctuations you experience with publicly traded REITs.
With a $10,000 or $100,000 minimum investment, you can unlock advanced strategies. These curated portfolios may focus on a specific real estate market or property type.
Trustpilot score: 3.1 out of 5
- High dividend yield returns
- No hidden fees
- Open to accredited & non-accredited investors
Anybody can invest in the 1st Streit Office REIT, which has an 8-9% dividend target. You need approximately $5,000 to open a position and this is open to non-accredited investors.
There is a one-year lockout period on your invested funds, and in fact, to receive the full redemption value, your funds must be invested for at least five years.
So, treat your Streitwise investments as the equivalent of a five-year CD.
But the current dividend rate is significantly higher than the 5-year bank CD average rates of roughly 1%.
So, this platform can be a better place to park your cash and earn more income. They also didn’t pause redemptions during the pandemic so you could sell when necessary to raise funds for other investments and expenses.
Streitwise also tends to charge fewer fees than other crowdfunded companies. However, a 2% annual asset management fee is withheld from your dividend income.
The company’s founders have also invested $5 million of their personal funds into this REIT. You may appreciate this participation as the leadership makes money when you make money and this investment philosophy can help prevent scams.
Trustpilot score: Listed but no reviews
- Numerous product offerings
- No maintenance fees or minimum balances
- One click deposit
PeerStreet specializes in debt investment loans for accredited investors. Most loan terms last from six to 36 months with a 6% to 9% return.
You can consider using PeerStreet for your short-term investments in residential properties.
It’s also possible to invest in commercial and multifamily deals.
While most crowdfunded companies charge an annual 1% administrative fee, PeerStreet charges between 0.25% and 1% for each investment, making it a low-price leader.
Another reason to consider PeerStreet is its automated investing feature. You can create investing screens that filter open opportunities by several factors:
- Property type
- Loan maturity date
- Geographic region
As you await new investment opportunities, you can stash your uninvested cash in a PeerStreet Pocket account. This high-yield savings alternative earns a competitive interest rate that can be higher than online banks.
Trustpilot score: Listed but no reviews
- Quick account setup
- Industry-leading customer service
- Diverse offerings
Accredited investors can invest in debt and equity offerings on EquityMultiple.
It approves less than 10% of borrowing requests in an effort to ensure no loan application will default.
You can browse the open and closed listings to get an idea of the opportunities they offer.
Some of the property types include:
- Multifamily apartments
- Self-storage facilities
- Student housing
- Industrial properties
One recent closed offering was a 16-home residential subdivision in Kahuku, Hawaii. This proposal had a 12-month term with a 10% income rate.
In the offering proposal, you can view two proposed house drawings plus more information about the lender and borrower.
The minimum investment is different for each offering type:
- Short-term notes: $5,000
- Individual properties: $10,000
- Managed funds: $20,000
Trustpilot score: 3.6 out of 5
10. Modiv (Formerly Rich Uncles)
- Easy to use
- Pre-vetted properties
- Open to non-accredited investors
Modiv offers two different REITs:
- Modiv Inc. Class C (NYSE: MDV): Holds commercial properties across the United States as a publicly-traded stock. You can purchase with most investing apps.
- Brix REIT: Non-traded REIT investing college student housing.
Modiv is open to accredited investors that pays a monthly dividend. Plus a 13th dividend annually.
Their success is due to acquiring property leased to credit-worthy tenants under long-term, triple net agreements.
Benefits of a REIT include:
- Enjoy competitive returns
- May reduce overall portfolio risk
- Potential to earn steady dividend income
- Yearly tax savings
- Long-term capital appreciation
- Portfolio diversification
For non-accredited investors, your best option might be Fundrise.
Trustpilot score: Not listed
Crowdfunded Real Estate Comparison Table
|Company||Allows Non-Accredited Investors Min To Invest|
|Fund That Flip||No $5,000|
|Patch of Land||No $5,000|
|Senior Living Fund||No $50,000|
Anybody in any income bracket can now invest in crowdfunded real estate.
It can be an effective way to earn steady passive income while avoiding stock market volatility.
Crowdfunded real estate deals require a longer investment horizon than publicly-traded REITs.
But investors can easily access real estate deals that normally cost a small fortune.