Real estate crowdfunding sites are gaining in popularity. They allow everyday people to invest in real property.
Prior to this, you had three options: buy and manage properties, become an accredited investor (with a high-net worth) in order to access exclusive deals, or purchase publicly traded REITs.
Real estate is a great way to build wealth and diversify investments beyond traditional stocks and bond.
In the past few years, the SEC has allowed investors who do not fall under the “accredited investor” category to have more options.
You’ll find below some information and an overview of the best real estate crowdsourcing sites for non accredited investors.
Table of Contents
Real Estate Crowdfunding: A Market for Crowdfunding
Top 3 Real Estate Crowdfunding Sites To Consider Investing With
Is Real Estate Crowdfunding A Good Investment?
Final Thoughts
Real Estate Crowdfunding: A Market for Crowdfunding
The SEC provides and recommends some guidelines for crowdfunding in general to ensure that you don’t take on too much of a risk.
It is not our intention to scare anyone away from investing on real estate crowdfunding sites. We want to make sure you are aware of the risks and how to protect your money.
While real estate crowdfunding may be separate from the stock exchange, it is still influenced by both the economy and housing market.
If you’re unsure, read the FAQs to find out more about the sites.
You can read my post about real estate crowdsourcing here to learn more about the benefits, drawbacks and other aspects of real estate funding.
Extra Tips: When choosing a real estate crowdfunding platform, you should pay attention to the platform fees, management fee, historical returns, any changes to investments or structures, as well as what other people have to say about their experience.
Top 3 Real Estate Crowdfunding Sites To Consider Investing With
Real estate crowdfunding platforms are available for accredited and non-accredited buyers. Some have been in the market for several years while others are new.
Three of the many crowdfunding sites that exist today are the ones I think are the best for non-accredited investors.
You may still find platforms that you prefer. These are just my opinions and ones I have used. After your research, you will find that these three platforms are still among your top choices.
There is no order or preference. Joining more than one platform is also fine. It’s a great way to diversify your real estate portfolio, become an investor and try out the different platforms.
Ground Floor
The Best Real Estate Funding Sites For Non-Accredited Investors
The company is on the right track. This is the best real-estate crowdfunding platform for non accredited investors.
Why? You can test the waters and start investing with as little $10 as you like.
You won’t get rich with $10 but you can learn about investing in real estate and take your time.
Here are some reasons why Groundfloor could be the right choice for you.
Returns: On average, groundfloor investments yield over 10% per year. Of course, this can change depending on your choice, the economy and other factors.
Diversification: There are different loan grades (high-risk to low-risk) with returns ranging from 5% to 25 % for investors. You are in charge and can choose which loans you wish to invest in.
Short-term: Groundfloor loan terms are usually only 6-12 months, so you won’t be locked in for many years.
Groundfloor is open for everyone. Not just accredited investors.
Groundfloor allows you to start with just $10 if you’re new to real-estate and don’t want to spend hundreds.
Register Here and Get $10 Off Your First Investment
Cons:
So far, only single-family homes are available for investment.
If a property defaults, there is a higher risk of volatility and subsequently a longer time to hold an investment.
No monthly income is paid – funds are only distributed after loans are repaid in full (so no option for passive monthly income).
Fundrise
Fundrise
Fundrise is the best-known site for real estate crowdfunding. This company is another great option for those who are interested in investing in real estate.
Fundrise allows you to invest as little as $500 in deals worth millions of dollars.
Do you find that interesting? It should!
Fundrise could be the perfect choice for you.
Simple Investment Portfolio Plans – Based on your financial plans and goals, you can select from the Starter Plan or one of their core portfolio plans: Balance Investing and Long-Term growth.
Diversification: Fundrise offers a wide range of real estate investments, including apartment buildings, commercial properties, new home constructions, and various locations in the U.S. Diversification of property types is a good idea.
Historic Performance: Over the past few years, their properties have delivered 8-13% returns to investors, beating publicly traded REITs such as Vanguard’s Real Estate Fund.
Transparency at the highest level: The Securities and Exchange Commission regulates their offerings and they must adhere to strict reporting requirements, such as annual audits and financial reporting.
Fundrise Starter plan requires only a $500 minimum investment. Although not as cheap as Groundfloor it is a great way to start investing in real estate deals.
Create Your Fundrise Account Here To Get Started
Cons:
This investment platform charges a high fee of.15% for the advisor and.85% for the fund.
Returns are funded after a longer hold period of 3-7 years.
Fundrise is an excellent platform to try out and see if it fits in with your investment strategy.
DiversyFund
The Best Real Estate Funding Sites For Non-Accredited Investors
DiversyFund is a newcomer to the real estate market, but they are doing some great things.
Recently, I came across their CEO and really enjoyed his interviews. I like this one!
DiversyFund allows you to invest as little as $500 in commercial real estate fund. The platform is also free! You read it right! That’s a big investment return.
Why are there no fees? DiversyFund owns all the properties, whereas their competitors use third-parties.
This is the reason DiversyFund is able to eliminate all platform and management fees – as they get money from acquisition/developer fees and therefore don’t need to collect fees from investors. Score!
There aren’t many crowdfunding sites that offer this.
Here are some reasons why DiversyFund could be the right choice for you.
Investors will be protected by the 7% return on investment before Sponsor (i.e. DiversyFund receives any profit splitting.
DiversyFund is the owner of all its real estate, so there are no fees for management.
Historical Performance: The average historical return of their online platform for non-accredited clients has been over 17%.
Cash Flow Positive Investments – Distributions of cash flow are reinvested monthly by investors until the asset has been sold and the final returns distributed. We wait for the properties to appreciate further so that we can sell them with maximum profit.
Low Minimum Investment Requirement: DiversyFund requires only a $500 minimum investment.
Create Your DiversyFund Account Here To Get Started
Cons:
Locations of real estate properties are not as diverse, but this is changing.
There is currently only one investment option available for non-accredited Investors (Growth Reit).
The average investment horizon for a payout is 5+ years.
Is Real Estate Crowdfunding A Good Investment?
Investors are attracted to real estate crowdfunding because they get to reap the rewards of owning an income-producing property without having to manage it.
Investors can diversify beyond traditional investments that track stock market trends for much less money.
Many of these platforms consistently deliver returns between 8% and 12% for their investors.
There are still risks involved and your money will be locked up for a longer period of time. However, you can get the diversification that you want.
Personal, I believe these are great investments as long as you do your research and understand what you’re getting into. Online real estate continues to be popular and is very real.
Do your research, minimize your risks, and select a platform you feel comfortable with. But I do think that the sites listed above are excellent real estate websites to consider for serious investment strategies.
Final Thoughts
These real estate crowdfunding websites are perfect for those who are nervous about real estate investments or rental properties.
You can learn about real estate investment and diversify your portfolio at the same. Real estate crowdfunding platforms may not be for everyone but they could be a great investment for you.
The examples below offer not only some of the most innovative platforms available, but also some unique benefits to accredited and non-accredited investors.
What is the best platform for you?
Even if you have a financial goal, current finances and an investment horizon in mind, choosing more than one option — or even all of them — is a great choice.
If you have limited funds, you can start with one option and then slowly increase it as you invest your money and begin to build wealth.
Real Estate PlatformCategoryGetting Started
GroundfloorReal Estate InvestingSign-Up Here
FundriseReal Estate InvestingSign-Up Here
DiversyFundReal Estate InvestingSign-Up Here
You can invest in real estate without any money if you don’t like crowdfunded platforms.
