Mar 20, 2023

March 21, 2023 - Advertisement - Real estate investing doesn’t have to be a headache. You don’t have to spend months researching properties, securing funding and finding tenants, and then continually managing the property yourself. With fractional real estate companies, you can invest small amounts of capital, giving you partial ownership in a property or properties. It is a great way to diversify your portfolio with an alternative investment (real estate), but in a way it is much easier than buying, renting and managing properties yourself. - Advertisement - 1. Fundraising Our Top Overall Pick Fundrise is our top pick in large part because it’s one of the most accessible fractional real estate companies out there. In fact, Fundrise’s Starter Account only requires a minimum deposit of $10 to get started. Plus, with 1% fees, you won’t be giving up most of your profit. - Advertisement - Another thing Fundrise has going for it is that it has been in existence since 2010, which is a bit longer than many of its competitors. It was essentially one of the first in the fractional real estate game. Ultimately, Fundrise has something for everyone. You can set the parameters as you wish, whether you are more oriented towards growth (price appreciation) or income (dividends). - Advertisement - pros Open to non-accredited investors Small minimum account size Many different account types Diversified by region and asset type Excellent mobile app and browser-based site Shortcoming Quite illiquid, meaning you can’t easily withdraw cash at any time, not ideal for short-term investments. Realty Mogul | Best for Income Investors Over 200,000 investors have used RealtyMogul since its launch in 2012, making it one of the older platforms alongside Fundrise. RealtyMogul has earned a solid track record in large part due to its commitment to due diligence. RealtyMogul targets undervalued properties or existing leases and then works with partners who have extensive experience in the real estate markets. Investors can choose one of three focuses: diversification, growth or passive income. pros Shortcoming Each investment comes with different fees. Investments are quite illiquid. Some have extended hold periods. CrowdStreet | Best for Accredited Investors CrowdStreet appeals to many investors from across the US, over 100,000 in fact. It provides direct access to a carefully curated portfolio of real estate. A highly organized company, CrowdStreet offers fractional and outright ownership of real estate to accredited investors. Founded in 2014 in Portland, Oregon, CrowdStreet has offered over 500 commercial real estate investment opportunities, and more than 60 of them have been fully realized. pros Shortcoming Accredited Investors Only High Investment Minimum No Early Withdrawals 4. Equity Multiple | Best variety of investment opportunities EquityMultiple focuses primarily on providing fractional real estate opportunities for commercial and institutional real estate. There are also preferred equity, senior debt and equity investments. EquityMultiple is serious about expanding its offerings, and its most recent products include tax-advantaged real estate (1031 exchanges and opportunity zones), as well as funds. Delivery varies depending on the product, but they are usually monthly or quarterly. At this time, EquityMultiple is only for accredited investors. pros Shortcoming Accredited investors only High minimum investment Redemption options are limited5. YieldStreet | Best for real estate and other alternative investments YieldStreet not only provides real estate investment opportunities but also other alternative investments. This makes it a unique platform which can be like a “one-stop shop” for your alternative investment needs. Currently, you can invest in real estate as well as maritime, legal and art investments as well as commercial and consumer finance offerings. While it primarily targets accredited investors ($500 investment minimum), the YieldStreet Prism Fund is available to non-accredited investors (with the same account minimum). pros It provides access to a range of alternative investments Privately structured credit deals open to individual investors Non-accredited investors are also welcome Each investment is backed by tangible assets Easy to use online or with an app Shortcoming Investments are illiquid Only accredited investors have access to most of its investments Largely exorbitant fees Customer ratings and consumer complaints raise concerns. acretrader | Best for Agricultural Land Investment AcreTrader is a partial real estate company focused solely on farm land real estate. In case you didn’t know, this often overlooked real estate has historically provided steady returns. It is also not correlated to any other index, which is exactly what you want in alternative investments. With AcreTrader, income comes through rent payments and/or price increases paid by farmers. Minimum investments range from $10,000 to $25,000. At the time of writing, it is only open to accredited investors. pros AcreTrader manages all aspects of agricultural land ownership and leasing for historical returns in the 7-9% range. Shortcoming Only accredited investors welcome A limited number of new offerings Relatively illiquid7. First National Realty Partners (FNRP) | Best for Commercial Real Estate First National Realty Partners (FNRP) may be the last fractional real estate company on our list, but it’s still a great option. Open to accredited investors, FNRP focuses on grocery-anchored commercial real estate. Established in 2015 in New Jersey, FNRP offers individual assets as well as funds into which investors can allocate their capital. The holding period for their flagship Opportunity Fund ranges between three to seven years. pros Clear and consistent asset acquisition criteria Tenant relationships with grocery chains and major retail This supports simple diversification of fund options Shortcoming A relatively high minimum investmentAccredited Investors Only website can be difficult to navigate Investors today are fortunate to have a variety of convenient fractional real estate companies to choose from. Whether you are interested in investing in farm, commercial, or residential real estate, there is a platform for you. Our breakdown above should give you a good idea of ​​the major crowdfunded real estate platforms, and which one might be best for you. Related Real Estate Investment Reviews: