Top Crowdfunding Sites for Real Estate
Real estate has burst onto the crowdfunding scene
Reward crowdfunding made popular by sites like Kickstarter and Indiegogo sees the majority of crowdfunding action, but real estate has also become a big market. Trillions of dollars of institutional capital are invested in real assets like apartment buildings and shopping malls, and a good chunk of this capital flows online to these real estate crowdfunding sites.
Based in Los Angeles, Realty Mogul works with individual and institutional investors to help borrowers and sponsors connect to capital. It was one of the first crowdfunding sources on the scene back in 2013.
This is not blind investing. Realty Mogul personally visits every property and works solely with partners with proven strategies. They deal predominantly with properties that are already leased, and they work with both accredited and non-accredited investors.
With short-term horizons of one to five years, Fundrise and its crowd have invested tens of millions of dollars into real estate properties, including the iconic new World Trade Center.
The focus here is not just on acquiring properties but on improving them. Fundrise's goal is to purchase properties for less than what it would likely cost to replace them. They have over 75 years of experience as a team. You can invest here for as little as $5,000, and the vetting process is topnotch. Only about 5 percent of proposals received by Fundrise is accepted.
Non-accredited investors are welcome, but they might not have access to the full scope of Fundrise's offerings.
Groundbreaker's brand of crowdfunding begins and ends with real estate companies, and it works closely with them to help raise money from the crowd. Real estate firms interested in crowdfunding and syndicating their deals can work with Groundbreaker's technology to build and expand their investor bases.
Comprised of tech specialists and syndicators, Groundbreaker's goal is to take the dirty work out of investing by doing it for you.
Invest as little as $5,000 in CrowdStreet's professionally managed real estate deals. Founded by CEO Tore Steen and VP of Business Development Darren Powderly, CrowdStreet has negotiated over $200 million in institutional-quality commercial real estate transactions.
The site comes with a nice array of online tools, and expert help is available if you need it. There's no fee to join the CrowdStreet marketplace, and all opportunities have been thoroughly vetted.
Groundfloor uses state crowdfunding rules. This means that people located in states where Groundfloor does business don't have to be accredited investors to participate in the site's real estate deals. Investors can put up as little as $100 in properties and financings. Typical venture loans to real estate entrepreneurs return about 10 percent in six to 12 months.
Founded in 2013, Groundfloor welcomes both accredited and non-accredited investors. It thoroughly vets each borrower and pre-funds each loan.
Built on its founders' collective $3 billion in institutional real estate investing experience, RealCrowd emerged from the prestigious Y Combinator incubator program.
If you don't like too much risk, this could be the source for you. RealCrowd deals only with companies that don't need your money. They must have at least 10 years' experience and at least $50 million in transactional histories. They can close without your funds. So why would they work with RealCrowd? For access to its network of investors.
One downside is that RealCrowd deals typically require a $25,000 to $50,000 minimum investment.
RealtyShares has an impressive track record—nearly $90 million invested dollars in projects in more than 40 states.
Invest as little as $5,000 in RealtyShares' offerings of direct equity and debt instruments. CEO Nav Athwal says, "We make the process of investing in real estate as easy as purchasing shares in publicly traded companies on E-Trade."
Patch of Land was founded by two brothers who wanted to help communities that suffered under the real estate crash of the early 2000s. It's a peer-to-peer marketplace that matches investors with investment opportunities. These opportunities are short term and high yield.
The focus here is on projects that traditional lenders will sniff at and turn away from. One downside is that it works with only accredited investors.
Investors on AHP purchase pools of distressed mortgages, all backed by property, from across the U.S., often at deep discounts. They don't make direct investments in property. If you have a heart and would like to help homeowners avoid foreclosure and rabid debt collectors, this could be a good source. They have a proven track record of over 10 years' experience.