Real estate crowdfunding is a growing sector, as it addresses a true market need and unlocks unique value for investors.
Investing in real estate has always been a popular way to build wealth. It has two key benefits: invest in real estate and you gain a passive income, while you also benefit from an appreciating asset. All without the need to take on excessive risks.
However, getting a foothold in the property market is not easy. You need a large deposit and you need to pass mortgage criteria. Even if you’re able to cross those hurdles there’s the huge responsibility of maintaining properties and the risk that your tenant may not pay up. For some, it’s simply too many eggs in one basket. But there’s an easier way.
Real estate crowdfunding allows you to invest in real estate with minimal starting capital, while still enjoying outsize investment returns. You can also more easily diversify your alternative investments in real estate across multiple projects. Let’s take a look.
Top Real Estate Crowdfunding Platforms of 2023
|Our Rating||Fees||Account minimum|
|Accredited Investors:||9.5/10||0.5% – 1.5%||$5,000||Equitymultiple.com|
|Non-Accredited Investors (Beginners):||8.5/10||1%||$10||Fundrise.com|
|Commercial Real Estate:||9.5/10||1% – 1.25%||$5,000||Realtymogul.com|
|Real Estate and Alternative Investments:||9/10||1% – 2%||$2,500||Yieldstreet.com|
Our Picks of Real Estate Crowdfunding Platforms
We’ve compiled the following list of established real estate crowdfunding platforms to get you started. In each review, we outline the cost to investors, the potential returns, and what the unique aspects of each platform are. Investor goals differ and it is up to you to decide which platform – and which opportunities – meet your requirements.
|Year Founded: 2010||Minimum Investment: $1,000|
|Primary Location: South Africa||Fees: 3%|
|Non-Accredited Investors? Yes||Target Return: 7%-12%|
|Country Available: Worldwide (excluding US and UK investors)||Term of Investment: Varied|
Wealth Migrate enables investors from around the globe (excluding US and UK investors) to access real-estate investments with yields of 7-12% in the US, UK, and Europe.
They created a fully regulated and compliant real-estate marketplace, to allow an investor to invest as little as $100 in first-world real estate opportunities without any of the hassle, management issues, or foreign bank accounts & complex tax structures.
They offer a fully curated inventory of investment opportunities, such as investments in institutional assets, and other developments. More than $18M USD has been raised on their platform.
- Global reach: Offers investors the opportunity to invest in real estate projects across the world, allowing for international diversification.
- Experienced team: The company is led by an experienced team of real estate and investment professionals, which may provide added confidence to investors.
- Low minimum investment: The minimum investment required to participate in projects is relatively low compared to other real estate crowdfunding platforms.
- Limited investment options: Wealth Migrate has a relatively small selection of investment opportunities compared to some other real estate crowdfunding platforms.
- Higher fees: The platform charges higher fees compared to some other real estate crowdfunding platforms, which could eat into investors’ returns.
- Limited information available on the platform about the track record.
Best for Accredited Investors:
|Year Founded: 2015||Minimum Investment: $5,000|
|Primary Location: US||Fees: 0.5% – 1.5%|
|Non-Accredited Investors? No||Target Return: 8% – 20%|
|Country Available: US Only||Term of Investment: 12+ Months|
EquityMultiple is an online marketplace for commercial real estate investing. They provide access to vetted, institutional-quality real estate investments with competitive returns and transparency. Investors can access a variety of asset classes, such as multifamily, office, industrial, retail, self-storage, and hospitality properties. The platform’s proprietary technology and process enables investors to quickly review and evaluate deals, evaluate risk and make informed decisions. EquityMultiple also provides educational resources, such as webinars, podcasts, and articles to help investors get started.
- Offers a variety of investment options, including both debt and equity investments
- Provides detailed property information and investment documents to help investors make informed decisions
- Offers a user-friendly platform with an easy-to-navigate dashboard
- Accredited investors only
- Higher fees compared to some other crowdfunding platforms, including a 1% annual asset management fee and a 10% carried interest fee on profits
- No secondary market to sell investments prior to maturity.
Best for Non-Accredited Investors (Beginners):
|Year Founded: 2010||Minimum Investment: $10|
|Primary Location: US||Fees: 1%|
|Non-Accredited Investors? Yes||Target Return: 8.7 – 12.4%|
|Country Available: US Only||Term of Investment: 60+ Months|
If you have a long-term outlook and want access to a sophisticated real estate crowdfunding investment platform that covers both residential and commercial properties you might want to look into Fundrise. The platform starts with an investment minimum of USD 500. Also, offers sophisticated investors a more powerful product with more features – starting at a USD 10,000 minimum.
Annual service and management fees come to 1%, while early redemption fees can be as high as 3% – but there are no redemption fees if you hold your investment for the full five years. However, real estate crowdfunding investments are complex – do read the full investment circular to get a full cost picture. As for returns: the platform claims it delivered its more than 130,000 investors returns that averaged 8.7 – 12.4%.
- Investors receive frequent dividend payments.
- The platform offers institutional-grade real estate investments without the high fees.
- The investment minimums are flexible, starting at just $10
- Investment can be highly illiquid.
- Fees can be complex and hard to understand.
- Investment is complex and requires careful due diligence.
Best for Commercial Real Estate:
|Year Founded: 2013||Minimum Investment: $5,000|
|Primary Location: US||Fees: 1% – 1.5%|
|Non-Accredited Investors? Yes||Target Return: 8% – 15%|
|Country Available: Worldwide||Term of Investment: 60+ Months|
RealtyMogul’s claim to fame is its rigorous underwriting process – the platform states that only one out of every thousand deals it considers are approved. So, in theory, investors should get access to the best opportunities. Access, however, comes at a price – with a USD 5,000 investment minimum. Fees vary depending on the underlying investment but are in the 1% to 1.5% range.
Like all real estate crowdfunding investment platforms, RealtyMogul investments are for the long haul, but the platform offers a buyback program – you can get 100% of your funds back if you’ve held your investment for 3 years or more, but you can’t sell if you’ve invested for less than a year. There is a mix of funds on offer, all with diverse underlying real estate assets. Returns are claimed to be 4.5% or 8% – depending on the fund you choose.
- Offers both REITs and individual properties for real estate investment.
- Investors can use a self-directed IRA (SDIRA) to invest in commercial real estate
- Charges low fees and conducts due diligence on each investment property.
- The investments offered may be highly illiquid.
- High account minimum.
- The Apartment Growth REIT charges a relatively high fee of 1.25%.
Best for Real Estate and Alternative Investments:
|Year Founded: 2014||Minimum Investment: $2,500|
|Primary Location: US||Fees: 1%|
|Non-Accredited Investors? No||Target Return: 3% – 18%|
|Country Available: US Only||Term of Investment: 3-48 Months|
YieldStreet is an online investment platform that provides investors with access to alternative asset classes such as real estate, legal finance, marine finance, and art finance. The platform is registered with the SEC and FINRA, providing investors with more transparency and security.
Offers a range of products and services, including portfolio management, risk management, and asset management. The platform also provides access to vetted and pre–vetted private investments, allowing investors to diversify their portfolios and access investments that are not typically available to the general public.
YieldStreet.com makes investing accessible, offering an intuitive platform suitable for novice and experienced investors. The platform provides investors with various tools and resources, such as risk analysis, portfolio management, due diligence, and more. Additionally, provides educational resources to help investors stay up–to–date with the latest industry news and trends. Overall, YieldStreet is an excellent option for investors looking to diversify their portfolios and access alternative asset classes.
- Investors can expect a net annual return of 12.44%.
- Investments have a short duration of 3 months to 5 years.
- The investments offered are backed by assets, which can provide some protection in the event of default.
- Most investments are only available to accredited investors.
- The number of investment offerings available may be limited.
- There is no secondary marketplace available to improve liquidity for investors.
Other Great Real Estate Crowdfunding Platforms:
|Year Founded: 2019||Minimum Investment: $50,000|
|Primary Location: UK||Fees: 2% upfront fee|
|Non-Accredited Investors? No||Target Return: Varied|
|Country Available: Worldwide (excluding US and Canada)||Term of Investment: Varied|
Private Wealth Global gives accredited investors worldwide (excluding investors from the USA and Canada) access to exclusive, curated off-shore real estate investment opportunities from $50,000 USD.
Their online wallet system was designed with the aim of removing all hassle from investors and allowing them to withdraw funds easily or re-invest to take advantage of compounding returns.
- Provides access to investment opportunities typically reserved for institutional or high-net-worth investors.
- The platform has a global reach, offering investments in various countries around the world.
- The platform offers an automated investment process and provides tools to help investors manage their portfolios.
- Some investments may have high minimum investment amounts, which can limit accessibility for smaller investors.
- There may be limited transparency regarding some investments, such as the specific underlying assets or projects.
- The platform charges a high annual management fee, which can reduce investors’ returns.
|Year Founded: 2015||Minimum Investment: $5,000|
|Primary Location: US||Fees: 0%|
|Non-Accredited Investors? No||Target Return: 9% – 12%|
|Country Available: US Only||Term of Investment: 6+ Months|
InstaLend empowers real estate operators to get access to capital at lower rates in far less time than they would with alternative lenders. With its competitive rates and diverse loan programs, InstaLend meets all your short-term and long-term investment needs.
- Provides access to a variety of investments, including commercial and residential real estate projects.
- Ability to start earning returns as soon as the loan closes.
- Performs due diligence on each investment opportunity and provides detailed information on the underlying projects.
- Loans are not pre-funded, meaning that funds are not available until the loan closes.
- Participation is limited to accredited investors only.
- No bankruptcy protection is provided for investments made on Instalend.
|Year Founded: 2016||Minimum Investment: $500|
|Primary Location: US||Fees: 2%|
|Non-Accredited Investors? Yes||Target Return: Varied (avg. 17.6%)|
|Country Available: US Only||Term of Investment: Varied|
Irrespective of the economic cycle, people will always require a roof over their heads. Multifamily properties, in other words, apartment blocks, can be viewed as a relatively safe investment. DiversyFund focuses on multifamily properties and does so in a unique way: DiversyFund buys existing properties and renovating to increase net rental income.
You need USD 500 to get started, and note that you need to commit for at least 5 years. The platform itself doesn’t charge any fees. It’s a simple investment prospect: you don’t get to choose what you invest in, but you get access to a comprehensive dashboard that outlines how your investment is performing. The platform claims returns of 17.6%. DiversyFund is fully SEC qualified, which promises extra oversight for investors.
- Low minimum investment required.
- Historical returns have surpassed the average of S&P 500
- Fees are kept low due to vertical integration.
- Limited selection of investment opportunities.
- Investment is highly illiquid and requires a five-year commitment.
- The investment management app has received poor ratings.
|Year Founded: 2013||Minimum Investment: $25,000|
|Primary Location: US||Fees: 0.50% – 2.5%|
|Non-Accredited Investors? No||Target Return: 9% – 24%|
|Country Available: Worldwide||Term of Investment: 36+ Months|
CrowdStreet offers its investors access to institution-quality commercial real estate crowdfunding investment opportunities. You have a choice of investing in a specific project, or you can diversify your real state crowdfunding investment by choosing one of CrowdStreet’s funds. Every project has a detailed webinar so you can evaluate whether a project is a good fit for your investment strategy.
Fees are 0.50% to 2.5% though this can vary for individual development projects. As for performance, the company claims an IRR of 26.3% across the USD 1.15bn it’s raised. Note that you need to meet guidelines for an accredited investor to invest with CrowdStreet. Also, note the high investment minimum – USD 25,000.
- Access to institutional-quality assets to diversify your portfolio.
- In-depth research available for each investment offering, including webinars and project sponsor Q&A sessions Investment guidance available in the form of videos and articles.
- The Investment Thesis feature provides insight into how potential deals are evaluated and the outlook on various asset classes and geographical locations.
- Available only to accredited investors.
- Crowdfunding investments are generally illiquid with a five-year commitment.
- Complex investments that require due diligence before investing.
|Year Founded: 2016||Minimum Investment: 50 EUR|
|Primary Location: Latvia||Fees: 0%|
|Non-Accredited Investors? No||Target Return: Varied (avg. 14.1%)|
|Country Available: Latvia||Term of Investment: 12+ Months|
With by far the lowest minimum investment amount in our list, Bulkestate allows real estate crowdfunding investors to participate in residential real estate projects across Latvia from as little as EUR 50. What’s more, investors pay no fees for joining the platform and investing – or for withdrawing investments.
Returns are generally above 10%, with some projects promising up to 15%. Note that you can’t withdraw your investment before the repayment date, which is typically a year or two from the initial investment. Bulkestate has a long history of completed projects and is a member of the European Crowdfunding Network.
- Higher than average interest rates on investments.
- No fees for investors.
- Offers buyback guarantees on certain investments.
- Easy-to-use platform with a simple registration process.
- Limited investment opportunities available at any given time.
- Only available to European investors.
- Limited transparency on the performance of past investments.
- No secondary market to sell or trade investments before they mature.
|Year Founded: 2014||Minimum Investment: 100 EUR|
|Primary Location: Estonia||Fees: 2%|
|Non-Accredited Investors? Yes||Target Return: 3% – 9%|
|Country Available: Worldwide with Exceptions||Term of Investment: Varied|
Another platform with low investment minimums. Crowdestate offers investors the opportunity to participate in projects across – interestingly – Italy, Latvia, and Estonia. There are no investment fees – unless your investment exceeds target rates, in which case Crowdestate takes a 20% cut of the excess returns.
The platform has a wide range of residential projects listed with terms around a year or less. The expected rate of return is typically around 10% to 13% p.a. Uniquely, Crowdestate offers a secondary market for investors so you can exit your investment – or indeed jump in on existing investments.
- Wide variety of investment opportunities, including real estate, business loans, and mortgage loans.
- Transparent and detailed information on each investment opportunity, including financial reports and project plans.
- Secondary market allows investors to buy and sell their investments before they reach maturity.
- Auto-invest feature.
- Limited availability of investment opportunities, as the platform only lists a few projects at a time
- Most investments are only available to accredited investors, which can limit the pool of potential investors.
- Investments are illiquid and cannot be sold until they reach maturity, which can be several years in some cases.
|Year Founded: 2013||Minimum Investment: $1,000|
|Primary Location: US||Fees: 0.25%|
|Non-Accredited Investors? No||Target Return: Varied|
|Country Available: US Only||Term of Investment: 6-24 Months|
PeerStreet is a real estate investing platform that makes it easy for investors to access high–yield, private real estate loans. The platform provides online access to a range of real estate loan investments that are sourced from experienced local lenders, with loan amounts ranging from $50,000 to $2 million.
The platform offers an intuitive dashboard to help investors make informed decisions about their investments. The dashboard provides detailed information about the loan originator, loan purpose, loan maturity, and loan performance. Investors can also review the loan‘s loan–to–value ratio, debt–service coverage ratio, and other key metrics.
- Works only with experienced real estate developers and operators.
- Investments have a relatively short term, usually between 6 and 24 months, allowing investors to quickly access their returns.
- Investors can start with a minimum investment of $1,000, making it more accessible to a wider range of investors.
- Only available to accredited investors.
- PeerStreet investments are not FDIC-insured, which means there is always a risk of losing some or all of your investment.
- The platform charges fees for its services, including a servicing fee, which can eat into returns.
|Year Founded: 2019||Minimum Investment: $100|
|Primary Location: US||Fees: 1%|
|Non-Accredited Investors? Yes||Target Return: 6% – 15%|
|Country Available: US Only||Term of Investment: 60+ Months|
ArrivedHomes is the new real estate crowdfunding player; this platform lets investors earn quarterly dividends from residential real estate properties. ArrivedHomes is perfect for beginners as it does not require accreditation and has a low investing minimum of $100.
The company works only with residential real estate; therefore, it is unsuitable for those looking for commercial real estate investments.
- Properties are fully-managed by experienced professionals, providing a hands-off investment experience.
- Investment minimums are relatively low compared to other real estate crowdfunding platforms.
- Investors can choose between a monthly dividend or reinvesting their earnings to compound their returns.
- Limited selection of properties available for investment.
- The platform is only available to accredited investors.
- The minimum investment period is five years.
|Year Founded: 2014||Minimum Investment: $25,000|
|Primary Location: US||Fees: 5% – 7%|
|Non-Accredited Investors? No||Target Return: 10% – 25%|
|Country Available: Worldwide||Term of Investment: Varied|
CityVest is a crowdfunding platform that connects investors with real estate investment opportunities. The platform focuses on providing investors with access to institutional-quality real estate deals that were previously only available to large financial institutions and accredited investors.
The platform allows investors to browse a variety of real estate investments, including commercial properties, multifamily apartments, and development projects. Each investment opportunity is thoroughly vetted and analyzed by CityVest’s team of experienced real estate professionals, and investors can access detailed information on each deal, including financial projections and investment documents.
- Offering access to private real estate deals and opportunities that are typically reserved for institutional investors.
- They offer a diverse range of investment options, including commercial properties, apartment buildings, and self-storage facilities.
- Dedicated team of real estate experts who conduct thorough due diligence on each investment before making it available to investors.
- The minimum investment amount for each opportunity is relatively high, making it difficult for smaller investors to participate.
- Investments are illiquid and typically have long lock-up periods.
- They only accept accredited investors.
One way to mitigate risk is, of course, to choose your investments wisely. Real estate has a few unique factors. For example, how cyclical is the property you are considering? An economic downturn won’t affect prime commercial real estate as much as it would a hotel, for example.
Also, consider the execution risk. Are we simply talking about refinancing an existing property, or is the real estate project to be built from scratch? You should also consider how much of the investment return will come from a final sale. There is less risk involved if your investment delivers a great income stream from the very beginning.
Finally, the underlying crowdfunding platform also matters. Because so many real estate crowdfunding platforms are relatively new to the market it can be difficult to obtain independent insight into the pros and cons of each platform.
Frequently Asked Questions:
Real estate crowdfunding works a lot like equity crowdfunding – and crowdfunding in the broad. It pools the investment funds from hundreds or thousands of investors to make one large investment. Individual investors could contribute as little as a couple of hundred dollars, while the overall investment project could be worth millions.
Where equity is involved, each investor owns a slice of the investment proportionate to the investment they make. In return, the investor receives a proportion of the profits. Real estate crowdfunding can also be in the shape of a loan: investors act as lenders, receiving fixed interest in return – and are paid back the amount they invested at a later date.
The first real estate crowdfunding platforms started appearing in 2012. Today, more and more developers are turning to crowdfunding to solicit funds from investors rather than traditional financing options.
One of the exciting aspects of real estate crowdfunding is the ability to invest in a wide range of real estate projects. Traditional real estate investing would usually limit individual investors to residential properties. An apartment for a family to let, for example. The crowdfunding route opens a whole range of real estate investment opportunities to everyone – no matter how much you have to invest.
Depending on the platform you choose, your investment could fund anything from residential property development through to commercial real estate projects and even mix-use properties. It’s an attractive way to diversify your real estate investments, or to take the opportunity to focus on the real estate sector you think is set to perform the best.
Some examples include:
- Buying a stake in multi-family housing where your investment is used to finance the development, purchase or refurbishment of an entire apartment block
- Investing in a share of commercial property that is rented out to companies that need an office, retail space or industrial facilities
- Obtaining a share in a large development project which could be for mixed-use: with space for apartments and separate retail space
- Purchasing a share of a broad fund that invests in a diverse range of real estate projects both residential and commercial
It’s worth thinking about what type of real estate investment suits your investment goals the best. Your investment could be relatively low risk with steady returns on offer, or you could opt for a real estate investment that is high risk in the hope you get outsize returns.
We’ve hinted at some of the advantages of investing in real estate via the crowdfunding route. Some of these advantages are shared by other forms of arms-length real estate investment, such as a stock exchange-trade property fund. However real estate crowdfunding brings together a unique set of advantages. Let’s take a closer look.
Real estate crowdfunding gives retail investors the opportunity to participate in real estate investment opportunities that they would never be able to access otherwise. Whether it is through a lack of resources, knowledge, or execution capability – ordinary investors get access to opportunities that would otherwise be out of reach.
Compared to many investment avenues, real estate crowdfunding can deliver much higher overall returns without necessarily involving outsize risk – provided you carefully choose the platform you invest in and thoroughly vet the investment opportunity.
Depending on how your investment is structured you may receive a regular income from your real estate crowdfunding investment. It could be in the shape of interest payments (if your investment acts as a loan) or you may receive a regular dividend.
Accessible investment minimum
Thought real estate investment is beyond your each? Not so with crowdfunding platforms. Investment minimums can be as little as USD 500 which is not only a fraction of the deposit requirement on a property but also lower than the typical minimums charged by real estate investment trusts.
Investments may be asset-backed
It depends on which investment opportunity you choose, but in many instances, your investment will be backed by a real, physical asset. It provides a fall-back, reducing the likelihood that your entire investment principal can be wiped out.
No landlord responsibilities
Acting as a landlord can be a real headache – regulations, maintenance, and bills are time-consuming and expensive to deal with. Tenant management can be just as difficult. However, you don’t need to deal with any of that if you invest via a real estate crowdfunding platform.
Take the traditional route to real estate investment and you risk getting stuck with one property and all the risks that entail. With crowdfunding, you can spread your real estate investment over different properties and different sectors. For example, if a specific sector experiences a downturn – say, commercial – you can rely on residential returns to balance your portfolio.
Don’t like investment paperwork? Real estate crowdfunding platforms simplify investment – it could be as easy as filling out a few in-app fields. You should do your due diligence, of course, but crowdfunding platforms can take at least some of the difficulty out of the picture.
For many investors, all or indeed some of these benefits will make a lot of sense. That said, like most investment opportunities, equity crowdfunding carries risks too.
Investors know that outsize returns carry larger risks – it’s a matter of weighing up the risk you take against the possible returns. In the case of real estate crowdfunding potential investors should weigh up the following:
- Platform reputation. The bank that provides your savings account may have been around for decades – not so in the case of crowdfunding platforms. New real estate crowdfunding platforms appear throughout the year. Many of these platforms are untested. Also, in the US, real estate crowdfunding platforms are not required to register with the SEC. So, platform vetting is crucial.
- Liquidity. You can readily convert stocks and mutual funds into cash, but you’re in for the long haul if you invest in real estate via crowdfunding. Real estate crowdfunding investments can be more illiquid than investing in property directly. You can’t simply sell when you want, and even when you can, there may be stiff penalties to pay.
- Fees. Managed investments are never free, and that is the case for real estate crowdfunding too. You’ll be charged a management fee on your investment – it could be as little as 1%, or much higher. It does remove some of the headaches around investing in real estate investment, but other avenues could cost you less.
- Risk. While many real estate crowdfunding projects are backed by real, physical assets there are still many ways in which risk comes into the picture. For one, real estate investments have high execution risk. In other words, can the sponsors of the project successfully execute their real estate project – or will the first unexpected hurdle stop the project?
No investment that has the potential to deliver double-digit returns will be free of risk. Your appetite for risk will determine whether real estate crowdfunding is a sensible investment.