CRE Securities or commercial real estate securities are loans on commercial real estate that you can invest in. In most cases, less volatility means you will be able to sleep better at night. So, if you purchased 10 shares you would own 1 acre of farmland. This platform is led by three founders who combined have over 40 years of real estate experience which amounts to over $5.4 billion in real estate transactions. Be sure to keep reading to discover some of the best real estate crowdfunding platforms available today. Performance fee of 10% for a 6% preferred return, Invest directly into individual real estate deals, Contribute to an investment portfolio of 30 to 50 properties, Fully managed investments based around your goals and objectives, Annual income of $200,000 or more ($300,000 for married couples), Net worth exceeding $1,000,000 (excluding primary residence). It is important to note that AcreTrader is currently available to accredited investors only. This gives them one of the longest track records of involvement with real estate of any platform mentioned on our list. Capped returns: Debt investments are calculated based on the interest rate of the owner’s mortgage loan. If you are a real estate investor who has built up some capital, you may now be looking for ways to grow your wealth a bit more passively. Realty Mogul platform charges fees based on the type of investment you select. Fundrise generates dividends through rental and interest payments in proportion to your share of the fund. The real estate crowdfunding space is constantly growing, and companies like Fundrise have enabled even non-accredited investors to participate in this thriving practice. Investors will earn returns primarily through dividends from cash flow producing real estate. In addition, inspect how the platform conducts their due diligence. Now, it is perfectly legal to raise money in this fashion! If you want to try a non-traditional form of real estate investing, it’s possible that crowdfunding could be the key to a new form of investing success. The minimum investment for PeerStreet is $1,000 which is quite low, however, they limit it to accredited investors only. PeerStreet merges the world of peer to peer lending with crowdfunded real estate. This option is effective for investors looking for easy diversification without sorting through dozens of projects. It allows you to invest a smaller amount of money (like $1,000 to $5,000) alongside a group of other investors which is the crowd. Roofstock has teams of property managers all over the US. Seller financing, also known as owner financing and a purchase-money mortgage, is when the party selling a property handles the mortgage process instead of a financial institution. These investors have to meet net worth requirements in order to invest. You may be looking at a potential of an 8 to 12 percent annual return. This means the prices are moving in tandem. This makes these investments of higher risk and higher potential return. The catch here is that this cannot include the value of your primary residence. This fee structure ensures the investment goals of the investors align with the compensation paid to Rich Uncles. For example, pay attention to input left from other experienced investors, or even criticism as a way to identify and fix business flaws. The QOZ fund is focused on tax-advantaged Qualified Opportunity Zone projects. Attend a FREE real estate class in your area to learn how to fund real estate deals with little to no money of your own. Instead of just investing in one property, they invest in many across different real estate markets. Furthermore, crowdfunding has become associated with several other notable benefits, including: Crowdfunding real estate increases your funding options while growing your investor network. When it comes to a low minimum investment, you can't beat $5. With fund investing, instead of selecting individual projects to invest in you're able to invest in targeted funds following a specific strategy. Find him on Twitter. The goal of Mogul REIT I is to generate income through a variety of real estate investments. For borrowers, the website has professionals who can lend a hand in raising capital for a project. Now, thanks to crowdfunding and the JOBS Act, average retail investors can get in on the action. You might be wondering why this is higher than traditional mortgage rates. Anyone who has $10 or more can invest with this platform and loan their money to flippers. All of them include a 2% placement fee, paid by the sponsor. Depending on a lender’s income, there are limits to the amount of money you can contribute to these kinds of deals. Minimum investment is also $5,000. It is important to remember that this is a new investment, giving us limited operating history to look back on. Fundrise charges a fee of 1% per year. You can sit back and relax while they vet the properties and manage your investment. That is a total fee of 3%, which is far lower than the typical commissions you pay to a real estate agent. This is an investment that is meant to fit under the category of “doing good for others.” This crowdfunded real estate platform invests in distressed mortgages with a low minimum of just $100. Most of these private real estate deals are completely legitimate, but you need to know what you are looking for. One of the obstacles many new investors face is finding funding for their real estate deals. For investors, on the other hand, you can look into a market of pre-screened residential, commercial, retail, and mix-use properties. Owning rental property. Long term rental-to-sale and renovations are the two primary strategies for this fund. This is another peer to peer real estate lending platform, similar to PeerStreet. This type of deal has the highest risk, but the highest return potential as well. You may find that a more detailed presentation of the trajectory of your project will help to alleviate investor’ hesitations before they are convinced that the project will be worth their investment. This fund is designed to generate a mix of income and appreciation through investment in six large multi-family developments across the country. They purchase properties and manage them. Another way to qualify for this is by having an income of $200,000 or more for two years, or $300,000 if you are married. Stocks go up, REITs go up. It is up to you to select individual real estate projects to invest in. Consider a flip for example. You can get started online with a few clicks. This makes it low risk, but lower return as well. Crowdfunding offers easy access to credit and capital without all of the hassle of getting a loan, and is used for virtually any type of fundraising effort you can think of: personal, familial, business and real estate investing. RealtyMogul delivers that through their Mogul REIT I which pays monthly distributions. Each portfolio holds anywhere from 30 to 50 commercial properties. This fee is reduced on a sliding scale for balances over $250,000. In the event the property is sold, you will also earn a share of its appreciation value. When you own these securities you essentially own the mortgages on commercial properties. This crowdfunded real estate platform has a unique approach when it comes to fees. Additionally, aim to pick a platform that has previous experience handling the kind of investments you’re looking for. The minimum to invest in the CrowdStreet Blended Portfolio is $10,000. Real estate crowdfunding is a way to become involved in investing in real estate that's easy enough for total beginners. Most of the projects are single family home renovations as a part of the fund's appreciation strategy. Patch of Land requires a minimum investment of just $5,000 to get started. So the question becomes… why not just buy a REIT if you are looking to diversify? These can be reinvested back into the REIT or deposited directly to a bank account. If they are unable to help the homeowner, they foreclose on the property and sell it. While Acorns is a great platform for the extremely novice investor, many have become hooked and want to try investing at a more advanced level. The property backs the loan. Just like with a traditional real estate investment, investors should be ready to put down tens of thousands of dollars to buy an investment property. These fees can be up to 3%. The limited portfolio selection is one of the main reasons why Rich Uncles came in lower on our list. The minimum opening balance is just $500. The fee structure for Roofstock is very straightforward. These interest payments are often on a fixed schedule, giving investors a steady source of cash flow. This platform differs from the others mentioned above because there are three different ways you can invest with them: CrowdStreet allows investors to pick and choose individual projects to invest in. You are probably familiar with crowdfunding sites like Kickstarter where crowdfunders can back ideas or help those out who are in need. Ideally, this approach mitigates some of the potential risks associated with this investment. Actively investing in real estate, FortuneBuilders is uniquely built to provide investors with the right education and systems for success. These returns are similar to the returns generated in the S&P 500 over the same timeframe. There are also legal fees for certain investment types. Roofstock provides investors with a very unique real estate investing option. Shorter hold time: Since debt investments are usually done with development projects, the holding period only stretches from six to 24 months. Less risk: You have less risk with debt investments, since the property owner will be the one to secure the mortgage loan. How to get started with only $10 a month How to change you life. This is another private REIT that primarily focuses on office buildings that are producing cash flow. CrowdStreet offers research tools for investors and is very transparent. The selections available from other crowdfunded real estate investing platforms are often quite limited. The reason is that PeerStreet looks for specialty loans that are higher risk and higher potential returns. These tax advantages include reduced capital gains rates on investments in these areas or potentially no capital gains at all if held for 10+ years. This mitigates some of the risk associated with the investment. Once you invest, Peerstreet will lock you in for the duration of the loan. Michael Quan June 13, 2016 Education, Income, Investment, Misc, Real Estate 23 Comments. The minimum to invest in funds is $20,000. They expect the individual investors to do their own due diligence. With this platform, investors can select potential investments by hand or invest in prebuilt portfolios. Equity investors have an ownership interest in the property. This is for high net worth investors with hundreds of thousands or millions of dollars to deploy. A key difference between crowdfunding and more traditional methods of raising money, is in the platform used, as crowdfunding is usually done online. These experts will create curated portfolios for each investor. This is another private REIT that primarily focuses on office buildings that are producing cash flow.