What Is Crowdfunding Real Estate?
Real estate has historically been one of the most stable asset classes. However, it’s also been – up until recently – an asset class reserved for very wealthy investors. With the advent of crowdfunding platforms, everyday investors now have the opportunity to invest in this asset class.
Real estate crowdfunding platforms pool funds from hundreds of investors to access some of the best investing opportunities. Another benefit of investing in real estate as an asset class is that it’s not correlated with the largest markets, which makes it an excellent way to diversify your investments. In this summary, we go over the best crowdfunding platforms – for a more in-depth analysis, check out our full list of the best real estate crowdfunding platforms.
1. Fundrise
Fundrise is an online crowdfunding real estate investing with over 1.7 million investors and a total portfolio value of over $7 billion. Fundrise has paid more than $224 million to investors since its launch in 2012. Fundrise is open to accredited and non-accredited investors, and you can get started with an investment of just $10.
Fundrise has earned dozens of rewards and made it into Forbes’ very prestigious Fintech 50 list on four different occasions (2015, 2016, 2017, and 2019). Fundrise has a score of 2.97/5 on Best Business Bureau (BBB) and thousands of happy customers. Here’s what some of those users have to say about Fundrise:
- “I have nothing but good things to say about Fundrise. Investors need to understand the nuances of investing in non-traded REITs, and Fundrise does an excellent job providing the necessary information. ” – Sean W.
- “I have been a client since 2018 and have enjoyed quarterly dividends like clockwork. Fundrise provides consistent updates with various projects, and they are extremely selective about the investments they pursue on your behalf. ” – Alan B.
- “Happy Fundrise investor for over two years. It is important to read and know what you agree to fully. Fundrise is very communicative, responds to all questions and concerns, and constantly keeps you updated regarding your investments. ” – MLE.
- “The people here complaining about being unable to withdraw their investment spent zero time reviewing the legal agreement they entered into. I thoroughly reviewed the risks and policies and understood this when investing. If you want liquidity, especially in an economic crisis, buy a stock market REIT ETF.” – Brent B.
2. First National Realty Partners
First National Realty Partners is an accredited-investor-only real estate investing platform headquartered in New Jersey with properties diversified across 22+ states. The First National Realty Partners website is straightforward to navigate, and you can access a map view to visualize all their 56+ properties. The minimum investment to participate in any of their offerings is $50,000.
First National Realty Partners is an accredited member of the Best Business Bureau, with more than 2360+ active investors and $90 million in distributions since its launch in 2015. It has excellent reviews from most users, averaging a score of 4.11/5 on BBB. Here’s what some of those users have to say:
- “I’ve invested in almost 50 syndications, FNRP being one of them. Over the years I’ve been with them, I only have good things to say. Everything is world-class from their customer service, acquisitions model, and value-add capabilities” – Chris B.
- “As a real estate investor that has invested with multiple platforms, FNRP, by far, is the most transparent and most communicative. What makes them stand out from all other companies and their platforms is their communication from day 1. They’re quick to respond to any questions, they’re upfront with their due diligence, and they provide updates on my investment.” – Samir P.
- “I’m only a few months into my first deal with FNRP, so for now, I am cautiously optimistic. I’m hoping to change my 4-star rating to a 5-star rating after a few quarters have gone by. So far, they have been great to deal with.” – John H.
- “I like dealing with FNRP as they are easy to communicate with. The platform has plenty of information on each deal, and they are always a phone call away. Updates are issued regularly as well as new leases when obtained on their properties.” – John M.
3. CrowdStreet
CrowdStreet is one of the largest real estate investing platforms in the US, with more than 732+ deals funded and $3.9 billion invested. CrowdStreet has a minimum investment of $25,000 and dozens of individual sales and tailored portfolios. Keep in mind CrowdStreet is open to accredited investors only.
CrowdStreet was recognized in 2022 as The Best Alternative Investments Platform by Benzinga, and in 2020 they won Forbes Best Startup Employers 2020. CrowdStreet has a score of 3.4 on Trustpilot and mostly positive reviews from long-term users. Here’s what some of them had to say about the CrowdStreet:
- “The platform is straightforward to use. Crowdstreet has done an incredible job of streamlining what is typically a laborious process to make CRE investments possible for individuals. They do a great job vetting the best sponsors and investment opportunities, bringing only the best deals to the marketplace.” – Eric R.
- “Good site to find private equity deals. However, you need to do YOUR due diligence. CS is a marketplace for deals, and although they have their process to filter out sponsors, they do not undertake the risk; you do.” – Ali L.
- “CrowdStreet is one of the best commercial real estate crowdfunding platforms available today. CrowdStreet’s sponsor screening, quality investment offers, document signing process, etc., are second to none. However, their customer service response time and interface, oversubscribed investment offers oversight, transparency, etc. needs improvement.” – Mike I.
- “Great source of deals. Tracking monies and investments on the website needs a little work though some of this is the sponsor’s responsibility. I wish the proforma were included for analysis. Will invest more through Crowdstreet.” – Wellman S.
Conclusion
With the best real estate crowdfunding platforms, real estate is no longer reserved for the very wealthy only. Everyday investors can now participate, and most venues don’t require accreditation. With a platform like Fundrise, you can gain exposure to this growing asset class with as little as $10, so there’s no excuse not to participate
FAQs
Is Crowdfunded Real Estate A Good Idea?
Yes – crowdfunded real estate is an excellent way for everyday investors to access some of the most profitable investments. Real estate has historically been one of the best-performing asset classes, and all the platforms listed here are excellent options. As with any investment, diversifying your investments is key; some platforms even offer diversified funds for real estate properties.
What Is The Average Return On Real Estate Crowdfunding?
Returns for real estate investments will depend mainly on the terms. For long-term investments, you can expect anywhere from 15% to 20% annualized returns, while short-term, safer investments yield, on average, 8%-12%.
How Much Money Do You Need To Invest In Real Estate Crowdfunding?
It depends on the platform. Platforms exclusive to accredited investors tend to have higher minimum investments starting at $25,000. For open platforms like Fundrise, you can get started with as little as $10.
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