Real estate crowdfunding has truly modernized the way the industry approaches real estate syndication. It’s an innovative way for all types of real estate investors to get together and fund an investment project, whether in residential or commercial real estate investment properties.
With more and more property investors getting on board with real estate crowdfunding, new online platforms are popping up every day. So, many of these sites already have an impressive track record and raving reviews from property investors who have found success. Among all of these great platforms, there are four that rank at the top.
But First…
How Does Real Estate Crowdfunding Work?
Before naming the top real estate crowdfunding sites, a property investor should learn how real estate crowdfunding works and just how to choose an online platform. To learn everything you need to know, read our guide: All You Need to Know About Real Estate Crowdfunding as a New Investor.
Accredited vs. Non Accredited Real Estate Investors
One distinction between real estate crowdfunding sites is just what kind of real estate investor qualifies to use the online platform. There are two types of real estate investors: accredited and non accredited investors.
To qualify as an accredited investor, you must have:
- An individual income of at least $200,000 or a joint income of at least $300,000 for the past two years.
- Individual or joint net worth of at least $1 million, not including the value of a primary residence.
- You must be a general partner, director, or executive officer for the issuer of non regulated securities.
If these three qualities don’t apply to you, you’re a non accredited investor. Luckily, real estate crowdfunding has come a long way from when it first started. More and more sites are beginning to cater to non accredited investors as well as accredited investors.
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The Top 4 Real Estate Crowdfunding Sites
Accredited Real Estate Investors
PeerStreet is considered to be one of the top real estate crowdfunding sites for 2018. Property investors have options that range from residential real estate to a few small multifamily real estate and commercial real estate investment properties. With PeerStreet, real estate investors can either choose a specific investment property or opt for an investment portfolio.
The minimum cash investment is $1,000, as opposed to the traditional 20-30% cash investment for real estate investing. This usually amounts to $50,000 to $100,000. PeerStreet has allowed accredited investors to put down less of a cash investment for lower risk real estate investing.
While the annual fees are 1%, the average return on investment is 6-12%. Anyone with real estate investing experience will tell you this is considered a pretty good return on investment! Property investors receive dividends from PeerStreet monthly.
But what makes PeerStreet one of the best real estate crowdfunding sites? Transparency. PeerStreet allows real estate investors to take a look at the performance of every investment property they’ve handled in the past. While most real estate crowdfunding sites will claim they take investment analysis seriously, PeerStreet actually proves it with the transparency of their investment portfolio and investment properties.
Related: What are The Advantages of Real Estate Investment Analysis?
The second on our list of the best real estate crowdfunding sites for accredited investors is CrowdStreet. This platform offers commercial real estate investment properties like apartments and office buildings (in the form of equity and direct investing).
The minimum cash investment of $10,000, while high, is still lower than a traditional down payment. Crowdstreet has no direct fees, but there are fees when investing in funds. The average return on investment is 10%. Even more impressive is the average return on investment of six of their realized investments: 22.6%.
What puts Crowdstreet in the running for the top real estate crowdfunding site is how many property investors have already trusted this platform with their cash investment: over 35,000. This allows any potential investor to feel at rest walking into a vast community of their peers.
Accredited and Non Accredited Real Estate Investors
Fundrise is one of the best real estate crowdfunding sites for small-time and beginner property investors. This platform set out with the goal of making every kind of investment property available to the average real estate investor. Fundrise hopes to allow every real estate investor to have the same investment opportunities as larger corporations and wealthy property investors.
This goal is most apparent in the minimum cash investment of $500 (the lowest on this list!). Fees are in the range of 0.15% to 1%, with an average return on investment of 8%.
This real estate crowdfunding site offers an impressive investment portfolio rather than allowing you to choose an investment property. This is great for beginners who aren’t yet familiar with investment analysis. The investment portfolio consists mostly of multifamily real estate investment properties, office buildings, loans, and even single family investment properties. Fundrise’s investment portfolio is already worth $1.4 billion.
Related: Understanding Multifamily Investment Property Returns and Benefits
Something unique about Fundrise is the fact that they pre-fund every deal right away. Not only does this provide a quicker return on investment, but it allows property investors to know that Fundrise really has faith in the investments they choose.
Realty Mogul allows real estate investors to either choose a specific investment property or lower the risk by investing in multiple investment properties. Their investment portfolio contains multifamily real estate investment properties, commercial real estate (retail, medical offices, hospitality, shopping centers, self-storage facilities, and apartment buildings), and loans. Realty Mogul’s investment portfolio is worth $1 billion.
The minimum cash investment is $1,000, and fees range from 0.3% to 0.5%. Because they have financed over 350 investment properties already, property investors can trust their experience in real estate investing.
Related: The Ultimate Guide to Real Estate Syndication
It’s no surprise that real estate crowdfunding continues to grow in popularity based on what these 4 platforms have already achieved. Whether you’re an accredited or non accredited investor or prefer single family homes or multifamily real estate, one of these top real estate crowdfunding sites could be for you.
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