Best Crowdfunding Sites for Real Estate

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Why We Chose It: Fundrise accepts clients regardless of income or net worth and the company’s low fees and the ability to invest with as little as $500 let individuals invest in real estate without a lot of money upfront.

Fundrise was founded in 2012 and is headquartered in Washington, D.C. The company has invested in more than $4 billion worth of real estate in the U.S., manages more than $1 billion of equity for more than 130,000 investors, and delivers a 10.11% annualized average return for investments.

Unlike some companies, Fundrise accepts investors regardless of income, allowing anyone to open an account and get started with as little as $500. The company also offers four other plans besides the initial starter plan to choose from: the Basic ($1,000 minimum investment), Core ($5,000 minimum investment), Advanced ($10,000 minimum investment), and Premium ($100,000 minimum investment). 

Each upgrade allows you to utilize more portfolio and account features. For example, the Basic plan allows you to create and manage your investment goals while the Core plan offers those features but also provides exposure to eREIT (real estate investment trusts) funds and the ability to customize your investing strategy.

One thing to note with each type of account is that it is somewhat challenging to understand Fundrise’s fee structure. Although fees are initially waived when you get friends to join, you will pay a 0.15% annual advisory fee, a 0.85% annual asset management fee, and possibly development and liquidation portfolio fees.

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Why We Chose It: CrowdStreet is one of the better-known real estate crowdfunding sites and has an established track record offering two types of investment funds, allowing you to diversify your portfolio.

CrowdStreet was founded in 2014 and is headquartered in Portland, Oregon. The company has closed on 473 commercial real estate investment offerings and states that approximately 44 of those offerings have been fully realized. 

CrowdStreet offers three investment options to choose from: 

• Individual deals with real estate investment opportunities that you select
• Diversified funds that allow you to invest in several different vehicles in one fund 
• A professionally managed real estate portfolio.

Although the amount can vary, most of CrowdStreet’s funds require a minimum investment of at least $25,000. Fees typically range from 0.50% to 2.5% for funds but can vary with each offering. You can typically expect about 11.5% to 26.4% return, depending on the investment. Total investor distributions are around $135 million.

Note that the company only allows accredited investors, meaning that your individual net worth, or joint net worth (if investing with a partner), must exceed $1 million, or you must have an income of at least $200,000 or a joint income above $300,000, with a reasonable expectation of reaching the same income level in the current year.

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Why We Chose It: DiversyFund is open to non-accredited investors and you can open an account for as little as $500.

DiversyFund began in 2014 and is headquartered in San Diego. The company operates a little differently than most real estate crowdfunding sites in that it owns and manages the properties directly instead of acting as a broker that joins investors to developers with specific projects. 

The company states that they offer investors a 7% preferred return, meaning the company doesn’t take its cut until investors receive 100% of their returns on the initial 7%. It can take several years to see your investment pay off, however, since you won’t see the returns until they sell the property. 

The company charges no management fees, which is a plus when you are just starting to invest. It’s also well-suited for those who want to invest in real estate but don’t know a lot about it, since the company handles your money for you and there are no decisions for you to make about which properties to invest in.

Although DiversyFund is a good vehicle for new investors who are just getting their feet wet, they don’t offer retirement accounts if you’re looking for long-term tax benefits.

DiversyFund is currently one of the smaller real estate crowdfunding sites out there with only about 30,000 clients investing over $100 million with the company.

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Why We Chose It:  Origin Investments specializes in Build-to-Core properties, meaning that after the properties are built, they will convert to Class A properties, producing a steady cash flow for investors.

Origin Investments was founded in 2007 and is headquartered in Chicago. In addition to managing funds, the co-founders have $50 million of their capital tied up in the company, and executives and employees own 90% of the business. 

Origin differs from some of the other real estate crowdfunding platforms by buying real estate directly instead of managing REITs. The company focuses on just 11 cities for purchasing their investment properties: Phoenix, Dallas, Chicago, Charlotte, Raleigh, NC, Denver, Houston, Nashville, Orlando, Austin, TX, and Atlanta.

Origin offers two funds for investors. The first, the QOZ Fund, is a tax-advantaged multi-family ground-up development. The second is the IncomePlus Fund consisting of multi-family properties that deliver passive, stable income to its investors. The company states that they have had no realized losses, although they do have the right to deny redemption requests so you should consider investing in their funds as a long-term plan. 

Though Origin does list returns on the website, it appears to average between 8% and over 50% IRR, depending on the project. The minimum investment amount varies but is usually somewhere in the neighborhood on $50,000 and only available to accredited investors.

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Why We Chose It: Equity Multiple only focuses on commercial real estate with offerings often starting as low as $5,000.

Founded in 2015, Equity Multiple is headquartered in New York, New York, and specifically targets commercial real estate which is historically more lucrative than other types of real estate investments.

The company provides three investing approaches to choose from:

• Direct investing with targeted investments ($5,000 minimum investment but typically $10,000)
• Fund investing with multiple assets and built-in diversification ($20,000 minimum investment)
• Tax-deferred investing with codified tax benefits ($40,000 minimum investment). 

Although most of their investment opportunities are for five to 10 years, the company does offer some investments that have a duration period as short as six months. The fee structure is only available by contacting the company and varies depending on the investment which is only open to accredited investors.