7 Best Real Estate Crowdfunding Platforms
[ad_1] In a world where virtual investments like crypto increasingly receive media attention for their volatility and uncertain futures, people desire to put their money into something stable and tangible. Real estate has historically been one of those investments, but the barriers to entry have always been steep—until the emergence of real estate crowdfunding platforms. What is Real Estate Crowdfunding? With real estate crowdfunding, individuals can pool their money to fund a property investment. Crowdfunding platforms benefit investors by allowing individuals to combine a relatively small amount of money with others so they can collectively fund a real estate investment they otherwise wouldn’t be able to. The entity owning the property benefits from crowdfunding by receiving funds they otherwise wouldn’t through traditional investing. Real estate crowdfunding gives all investors exclusive access to investments typically reserved for the ultra-wealthy. Real estate crowdfunding can include debt or equity investments. Equity investing occurs when an investor owns a property and receives income through things like rent and profits from selling the property for more than what they paid. Debt investing involves loaning money to real estate buyers. Those who loaned their money receive their investment in fixed increments, depending on the loan terms. What Type of Investors is Real Estate Crowdfunding Best For? Real estate investing was historically reserved for accredited investors, who, according to the SEC, must fulfill one of the following requirements to be considered accredited. You have an individual income of more than $200,000 per year in the last two years and expect to maintain the same income level in the current year. You and your spouse jointly have an income of $300,000 per year in the last two years and expect to maintain the same income level in the current year. You have a net worth exceeding $1 million, excluding your primary residence, either individually or jointly with your spouse. You invest on behalf of an entity with at least $5 million in assets or a business in which all the equity owners are accredited investors. In addition to being accredited, investors need the time, effort, and knowledge available to find a property, conduct all activities related to property management, and take on all the risks of a single property. While some real estate crowdfunding platforms do require individuals to be accredited investors, several do not. With these platforms, all investors, accredited or not, can invest in the relatively stable real estate market without the time, effort, and patience previously required. You might be interested in investing in real estate via crowdfunding, but where do you begin? We’ve rounded up the top seven best real estate crowdfunding platforms in 2022, with some extra honorable mentions. We’ve found something for everyone’s specific financial needs, so read on to get started with your real estate investing journey. Table of Contents What is Real Estate Crowdfunding? What Type of Investors is Real Estate Crowdfunding Best For? Best Real Estate Crowdfunding Platforms for 2022 Fundrise: Best for Beginners RealtyMogul: Best for Single Property DiversyFund: Best for Building a Portfolio Over Time Roofstock: Best for Single Family Homes Cadre: Best for Multiple Investment Styles AcreTrader: Best for Farmland Fund That Flip: Best for Fix-and-Flip Investments Other Real Estate Crowdfunding Platforms to Consider Bottom Line – Choosing the Best Real Estate Crowdfunding Site Best Real Estate Crowdfunding Platforms FAQ Best Real Estate Crowdfunding Platforms for 2022 Best for Beginners: Fundrise Best for Single Properties: RealtyMogul Best for Building a Portfolio Over Time: DiversyFund Best for Single Family Homes: Roofstock One Best for Multiple Investment Styles: Cadre Best for Farmland: AcreTrader Best for Fix-And-Flip Investments: Fund That Flip Fundrise: Best for Beginners Fundrise is an ideal platform for those just getting started in the real estate crowdfunding space. It’s also ideal for people who want a platform to provide increasingly larger investment opportunities as they grow as investors. What You Need to Know: Minimum investment: Depends on the chosen account level Starter–$10 Basic–$1,000 Core–$5,000 Advanced–$10,000 Premium–$100,000 Recurring management fee: 1.0% annual fee (0.85% management fee plus 0.15% servicing fee) Accredited investors only?: No Property types: Check out their assets page to learn about available property types, including apartment, residential and commercial properties. Pros Variety of account levels offers something for everyone. Relatively stable investing options through private real estate, as opposed to REITs or stocks Diversified portfolio strategy via the soon-to-be-released Innovation Fund Cons Minimum iPO investment is $1,000 Limited customer support services Lack of complete fee transparency Fundrise prides itself on being an easy-to-use and low-cost option for those looking to break into real estate crowdfunding. Fundrise uses its commercial software to find and advertise properties to its investors. Utilizing its own software enables Fundrise to charge lower fees, leading to more money in investors’ pockets. Fundrise currently has 330,000 investors using its site, a total asset transaction value of $7 billion, and $194 million in net dividends already earned by its investors. The company’s investments are all tangible, private real estate investments, typically more stable than REITs and stocks tied to the stock market’s performance. Also, because the company is investor-owned, Fundrise allows its users to invest in its iPO, or internet public offering. While the platform offers something for the beginner up to the seasoned investor, it leaves much of the troubleshooting up to users, as Fundrise has limited customer service assistance. There’s no way to directly speak with a representative if you have an issue—only an email address and troubleshooting articles are on the website. Fundrise’s total fees for individual investments aren’t clearly stated on its website either. If you’re a green investor looking to break into the real estate crowdfunding space, Fundrise may be an excellent option. Check out our Good Financial Cents Fundrise Review for more information. Get Started With Fundrise Today RealtyMogul: Best for Single Property If you’re an accredited investor looking to focus on finding and investing in the best single piece of property, RealtyMogul may be for you. What You Need to Know: Minimum investment:
7 Best Real Estate Crowdfunding Platforms Read More »
