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 the best platform for you.
Top Crowdfunding Real Estate Sites
There are roughly 100 different crowdfunding 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.
Trustpilot: 4.0 out of 5
Groundfloor allows both accredited and non-accredited investors too. This company focuses on debt investments instead of equity investments. They introduced a new Groundfloor mobile app available via the Apple App Store and Google Play Store for easier access.
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 the company’s average return on investment over the past six years is 10%.
Learn More: Groundfloor Review
Trustpilot: 2.3 out of 5
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.
Learn More: Crowdstreet Review
Trustpilot: 3.0 out of 5
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.
Learn More: RealtyMogul Review
Trustpilot: 1.9 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
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.
Learn More: Fundrise Review
Trustpilot: 2.5 out of 5
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.
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: 2.3 out of 5
Accredited investors can invest in debt and equity offerings on EquityMultiple.
It approves less than 10% of borrowing requests 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: 4.6 out of 5
HoneyBricks does real estate investing a bit differently than other companies we’ve mentioned here.
With HoneyBricks, you purchase real estate tokens that represent real fractional ownership in high-quality commercial real estate. You can purchase HoneyBricks tokens with crypto, fiat (USD), or you can also stake your current crypto holdings.
There are several benefits to investing in tokenized real estate through HoneyBricks, including lower transaction fees, tax advantages through direct ownership, and improved liquidity.
HoneyBricks is building a secondary market allowing token holders to sell their tokens once they meet minimum holding periods.
Although HoneyBricks’ revolutionary technology is one of its most obvious key differentiators, its approach to real estate is also world-class.
Their investment team has invested over $5 billion across 1,000’s of real estate assets throughout the US. Each property is comprehensively vetted and only <1% make it onto the marketplace.
Trustpilot: 3.2 out of 5
Happy Nest makes commercial real estate investing possible for the ‘everyday investor.’ You only need $10 to get started, eliminating all excuses why you can’t invest in real estate.
While the returns aren’t typically quite as high as some other crowdfunding platforms, Happy Nest targets a 6% average return and pays monthly dividends.
What we love most about Happy Nest is the ability to round up your purchases to invest automatically. This way investing in real estate requires little effort yet has the potential to provide decent returns.
Happy Nest doesn’t charge a monthly or annual fee; however, they aren’t 100% transparent about the fees charged per listing, which can be a downside.
10. Arrived Homes
Trustpilot: 3.7 out of 5
Most crowdfunding websites focus on commercial real estate, but Arrived Homes is different. Investors using this platform can invest in residential properties without becoming a landlord. With a low $100 minimum investment, it’s an excellent way for anyone to start investing in residential real estate.
Arrived Homes started in 2019 and has $29 million worth of property in its portfolio and almost 100 properties.
The platform is user-friendly, and you choose the homes you want to invest in yourself. There’s no guarantee the homes you choose have tenants in them yet, though, so you may not earn dividends right away.
Arrived Homes pays quarterly dividends, unlike other platforms that pay monthly, so you’ll receive a payout (if there are tenants) every three months or four times a year.
Arrived Homes charges a 1% annual assets under management fee plus a sourcing fee which they detail in their listing.
AcreTraderDisclosure: “This is a sponsored promotion for the AcreTrader platform. Well Kept Wallet may have investments in companies represented on the AcreTrader platform. This informational is by no means a promotion, solicitation, or recommendation of any specific investment.”
How Do These Crowdfunded Real Estate Sites Compare?
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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. However, investors can easily access real estate deals that normally cost a small fortune.