The Global real estate crowdfunding market was $10.78 billion (USD) in 2021, and forecasts suggest it will grow at a compound annual growth rate (CAGR) of 45.6% from 2022 to 2030
By pooling money with other investors, you can participate in larger real estate projects previously beyond your reach. An abundance of real estate crowdfunding apps makes investing even easier, allowing investors to browse and participate in projects from the convenience of their mobile devices.
Here are the 10 best real estate crowdfunding platforms and the features that make them unique.
Arrived buys a single-family rental and then offers investors fractional shares. You can get started on Arrived with as little as $100 and enjoy quarterly appreciation returns and rental income. The company also has a simple fee structure: an annual asset management fee of 1%.
With the advent of companies like Airbnb and VRBO, the vacation rental industry is booming right now. It’s planned to hit $20 billion by 2025. Additionally, these properties typically generate 130% more revenue than their traditional counterparts over the long term.
By using Arrived, you can benefit from favorable real estate tax rules and can invest between $100 and $20,000 per home. We recommend that you diversify your portfolio to determine which markets are best for you.
crowd street is an online marketplace for accredited investors*, giving you access to all kinds of investment opportunities across a range 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 over 752 deals, totaling over $4 billion invested. They are also renowned for consistently delivering strong returns to their investors, with 19.2% of realized IRR and average holding periods of 3 to 5 years. The downside: You typically need at least $25,000 to sign up for most CrowdStreet real estate investment trusts (REITs) and transactions.
*Accredited investors are investors who meet one of two criteria: 1) their net worth is greater than $1 million (this does not include equity in a private residence), or 2) they have an annual income of $200,000 or more for each of the last two years ($300,000 if you are married and filing jointly), and you will meet this threshold again.
CityVest offers accredited investors the opportunity to invest in institutional real estate transactions starting from a minimum of $25,000. Investor minimums for these types of mutual funds are usually $1 million or more. By lowering the barrier to entry, CityVest allows many more investors to take advantage of the stable returns these investments provide (usually around 15% or more).
CityVest works exclusively with institutional funds that employ trustees and auditors. Each offer is subject to third party due diligence to verify the information of the investment manager and to make the investment as safe as possible.
If you don’t have $25,000 to fund with CrowdStreet or CityVest, don’t worry! With Fund raising, you can start investing with as little as $10. Fundrise is “America’s largest direct-to-consumer private market 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, multi-family complexes, industrial properties, and more. They also have a transparent fee structure: 0.85% annual asset management fee.
Plus, signing up with 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 suits your goals.
One of the disadvantages of crowdfunding is its lack of liquidity. It is common for investments to take five years or more before your asset is liquidated. With Ground floorthe average investment is repaid in 4 to 12 months.
Instead of crowdfunding to invest in properties, Groundfloor invests in debt secured by high-yielding real estate. The ground floor is a hard money lender which issues fix-and-flip loans to other real estate investors. Once the borrower has financed or sold the property, you get your investment back with interest, consistently returning more than 10% over the past six years. Of course, there’s always the chance that an investor won’t repay their loan, so minimize your risk by investing small amounts in a pile of loans.
Your investment threshold starts at a minimum of $10, so if you have $100 in reserve, you can invest $10 in ten different loans if you wish!
Concrete also specializes in short-term home loans. Due to the short terms of their loans, Concreit has plenty of liquidity and allows you to withdraw your money at any time. However, there are three reasons why you won’t want to do this:
- Concreit pays a fixed annual dividend yield of 6.2%, but you receive it in weekly installments, so your money adds up fast.
- If you withdraw your money during the first year, you will be penalized 20% of your dividend payout (there is no withdrawal penalty on your principal).
- It can take 30-60 days for your funds to arrive, so if you need funds urgently, your Concreit money may not arrive at your bank in time.
You can start investing with Concreit for just $1.
Realty Mogul consists of REITs that purchase and manage a variety of commercial real estate investment opportunities, including retail, multi-family, office and land development. Since their inception, they have grown to over 274,000 members, made 35,300 investments and gained exposure to over $5.9 billion nationally. They also have access to dozens of markets across the United States.
They have two REITs for non-accredited investors: The Income REIT and The Apartment Growth REIT.
|The Income REIT
|The Apartment Growth REIT
Streitwise manages a “professionally managed and tax-efficient portfolio of real estate assets”, emphasizing transparency. The company’s founders have invested more than $5 million in the company, and the REIT offers investors a diverse portfolio of “institutional-grade stable commercial builders.” In 2022, their payout average was 7.8%.
Streitwise is available to accredited and non-accredited investors, with a minimum investment requirement of $4,400. Just 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 more.
yield street allows you to invest in a wide range of highly vetted investment opportunities. They specialize in alternative investing, so you can not only invest in real estate, but also:
- Legal finance
- Consumer loans
- Commercial loans
- Car loans
- NFT and crypto
Although most of their opportunities are only open to accredited investors, YieldStreet’s Prism Fund is accessible 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 multi-family properties in Atlanta, Tucson and Dallas-Fort Worth.
DiversyFund the minimum buy-in is $500. They own their properties, which means you don’t have to worry about the high commission fees you’ll encounter on other crowdfunding apps.
DiversyFund’s goal is growth, so they reinvest their earnings in new properties to quickly expand their portfolio. They estimate that they can generate returns of 10% to 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 generate long-term returns in five years or more.
While we’ve highlighted ten of the best real estate crowdfunding apps, there are several more to consider, depending on your interests and investment strategy. For example, if you are interested in agricultural land, Acre Trader looked at properties from the Carolinas to California and provided 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 BiggerPocket Forums to help. Our forums give you access to the largest community of real estate investors in the world, and there is no shortage of active real estate crowdfunding investors looking to help you.
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Note by BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.