Top Sites for Real Estate Crowdfunding Investing

New Way of Real Estate Investing

Traditionally, real estate investing requires owning a lot capital, having deep knowledge about the industry and knowing the right people. Nowadays real estate crowdfunding sites provided an alternative for general public to be part of the game. There are two ways of understanding this. First, real estate crowdfunding companies act as an ‘agency’ to pull money from the investors into a larger fund and use that money to purchase real estate properties. Alternatively, you can think like real estate crowdfunding sites ‘break’ the properties into pieces or percentages. You can own certain percentage of a building by putting in corresponding dollars.

Benefits of Real Estate Crowdfunding

Lower Threshold

Real estate crowdfunding lowered the threshold of participation. Instead of buy in with millions of dollars, you can participate in real estate investing with as little as $1,000 on certain sites such as PeerStreet. Still some sites require investors to be accredited. Overall more and more people have opportunities to be part of the game, which otherwise only open to the ultra-rich.

Diversification of Portfolio

Real estate crowdfunding allows you to spread your capital into different assets classes and markets. Imagine that you have $1 million dollars. Previously you can only put them into one projects. Now with the help of crowdfunding, you can pick 10 properties across different states including hotel building, storage, residential and retails. Your risk is property mitigated by diversifying your portfolio.

Hand-free Due Diligence and Vetting

Having access to those investing properties is just step one. Next step involves picking the right property that fits your investment strategy. It could be as easy as picking the best return or as complicated as doing a ton of due diligence on sponsor, LTV, IRR, Cash on Cash, Term and etc. The good thing is that some of the crowdfunding sites out there have dedicated experts doing those work for you before they list those properties on their websites, which saves you a lot of research time.

Top Real Estate Crowdfunding Companies

Fundrise

Fundrise has a minimum investment of $1,000 and charges between 0-3% in fees. They are one of the sites that you don’t have to be accredited to invest. Their main products are real estate investment trusts, or REITs, which generally invest in income-generating real estate, through buying and managing buildings or by holding mortgages. Fundrise call it ‘eREIT’. In addition, Fundrise also offers eFund, in which investor pull money to buy land, fix-uppers, develop housing and then sell it to home buyers. The average annual return for all Fundrise investments in 2017 was 11.44%.

Realty Mogul

Realty Mogul – Investors who use Realty Mogul have the flexibility to put as little as $5,000 down, but can also participate in large-scale projects – such as the Hard Rock Hotel in Palm Springs. People can fund real estate loans or buy an equity share in a property.

RoofStock

RoofStock – RoofStock is a company that allows investors to purchase single family rentals that are already occupied. Beyond having a great marketplace, they offer a lot of add-on services like property management, insurance and title support that makes investing in single family rentals extremely easy. RoofStock also have a product - RoofStock One that allow you to pull money to buy shares of a rental home. You could own 10% of a rental property and share 10% of the revenue. RoofStock also have another product - RoofStock Fund that allow investors to pull money together to buy a portfolio in certain MSA region.

PeerStreet

PeerStreet – PeerStreet has become the most “well-known’ real estate peer to peer lender, with the endorsement of several major finance personalities. They use a data-driven approach and focus exclusively on debt financing. PeerStreet is another crowdfunding site that you don’t have to be accredited to invest. PeerStreet has the lowest investment minimum at just $1,000. It provides auto-investing option that after you set investing criteria and deposit enough fund into your ‘Wallet’, The system will help you auto-invest in those properties that fit your investment strategies when they become available. Projects on PeerStreet get funded super fast.

AcreTrader

Different from the previous crowdfunding sites, AcreTrader focus on farmland investment. It provides investors direct access to the highly attractive asset class of farmland. They go through a robust selection process with only 5% of farmland reviewed got listed on the website. Each farm and its legal title are placed into a unique entity (usually an LLC). The minimum investment is $1,000 and AcreTrader Management will handle all aspects of entity administration and property management, from insurance and accounting to working with local farmers and improving soil sustainability. AcreTrader also provide a market for trading shares. Should you wish to sell some or all of your shares, you may do so on the AcreTrader marketplace. You may also hold ownership until the terminal date