12 Best Real Estate Crowdfunding Sites In 2021 | Learnbonds

Established in 2010, Fundrise was in existence long before the passing of the Jobs Act in 2012 and its implementation by SEC in 2016, making it a pioneer in the field of real estate crowdfunding. It was also the first crowdfunding site to successfully launch a real estate project from pooled resources.

But this is not the only reason the company tops our list of best crowdfunding realtors, we were also intrigued by its elaborate categorization of investors. They have broken them down into the basic plan that requires a minimum investment of $500 and three core plans that require a minimum investment of $1000.

Fees and interest

Fundrise features prominently here because of their ultra-low management fee, attractive interests, and flexible dividends. If you invested with Fundrise, you would expect the real estate company to deduct a fee of 0.85% on interests accrued, one of the lowest we have witnessed so far in the industry, while expecting between 8% and 12% in interest rates annually.

Unlike most of its peers, Fundrise then distributes these dividends to you every quarter, earning you an almost steady source of income. Not to mention the fact that they will also review your investment after every quarter or semi-annually depending on your subscription.

Realty Mogul has also proven its worth in the crowdfunded real estate sector with its highly diversified investment portfolios for both the accredited and non-accredited investors. To invest with the realtor, you will need to subscribe to one of their two investment portfolios available for their non-accredited members.

These include Mogul I and Mogul II plan with an average of 8% and 4.5% annualized interest rates respectively. The primary difference between Fundrise and Realtor Mogul is the fact that the latter is more concerned with growing your funds while the former is dedicated to providing you with a regular income stream from your investments.

Investment plan

What we loved most about Realty Mogul is their elaborate investment process. For instance, the company will only invest in real estate projects with a proven background of steady cash flow, implying no investing in bare land or constructions.

Additionally, they have a solid team of real estate professionals who must vet and approve every investment before committing client funds. And in the spirit of protecting and growing their member’s funds, they will only invest in properties with the least number of leases as a risk management practice.

Rich uncles offer two investment portfolios that are open to the general public in the name of Student Housing REIT and National REIT. Investing with Rich Uncles calls for a minimum investment of $5 and $500 respectively.

The annual return for the Student housing project averages 6%, while the national REIT averages 7% annually plus an investment value increase of 2%. Apart from the discriminatory use of investment amounts to set these two portfolios apart, Rich Uncles’ National REIT investment program registration is only limited to just 20 states.

Simplistic approach and transparent fees

Rich Uncles aren’t just after keeping their investment profile as simplistic as possible with only two portfolios, they also have one of the most flexible management fee structure. Unlike its peers who charge a fixed commission on profits, Rich Uncles doesn’t impose a fee on the first 6.5% percent profit, the rest (93.5%) attracts a 40% management fee.

You should also note that Rich Uncles doesn’t invest in residential properties. Plus one of their rules of engagement when vetting investments state, is that they will only invest in student housing with over 150-bed capacity and one that has over 90% occupancy.

CrwodStreet is probably the most expensive crowdfunding platform you will come across the internet. But it still makes it here because of their high-interest rates and the versatility of their investment portfolios. On their website, CrowdStreet claims to earn you between 9% and 24% as interest for their clients.

We believe CrowdStreet to be one of the few crowdfunding sites giving you a choice with regards to the type of investment you want to hedge your money against. Their three investment classes include direct investment to individual deals, contribution to a portfolio with between 30 and 50 properties a managed investment based on your goals and ideas.

High investments amount and fees

While most low-income earners yearn for an opportunity to decide on the investments their money is directed to, you will probably consider the huge investments demand by Crowdrise a major turnoff. For direct investment, you will need a minimum of $25,000.

The 50-property portfolio and their managed investment plans on the other hand call for $10,000 and $250,000 as minimum investments respectfully. You can, however, console with the fact that the deal sponsor (property owners) here pay the management fee and not investors.

Groundfloor, an Atlanta based crowdfunding real estate startup, hopes to create a platform that lives true to the letter of crowdfunding real estate project. And it hopes to achieve this by creating room for low-income earners to invest in their platform while backing up these investments with actual real estate property.

In line with this, you can invest as little as $10 with the relator and expect an average 10% interest on your investment paid annually or after every six months. According to the company, all their investment are secured with a physical real estate.

PeerStreet also features on our list of most reputable crowdfunded real estate companies. And while it will only cater to the accredited investors we still include it here because of their attractive interest rates, solid reputation, and transparency in fees and unique approach to investing.

If you hope to invest with the company, you will need a minimum deposit of $1000 and commit to an investment plan of not less than six months while expecting an average annual return on 12%. At a range of 0.25% and 1%, we believe PeerStreet management has some of the lowest management fees.

A unique approach to investing

Unlike its peers who are only looking for healthy and already profitable investment opportunities in the commercial and residential sector, PeerStreet is constantly hunting for institutions in distressed debts. The company that offers a mix of peer to peer lending and real estate investment also claims to harness s the power of big data and advanced algorithms and to vet the viability of an investment before taking it on as well as the reliability of its sponsors.

Patch of Land is yet another popular peer-to-peer crowdfunding. On their website, the P2P platform claims to have its sight set on streamlining the process of connecting lenders and borrowers through the use of technology and leveraged data. You will, however, need to be an accredited or institutional investor to create an investment account with the company. The company nonetheless guarantees the security of your deposits and interest by promising to advance your resources to short-term borrowers that have to attach collateral for the amounts advanced.

Interest and fees

On their website, Patch of land promises to earn their investors as much as 12% per annum on their investments. The average interest rates earned on overall loans advanced to date on the platform, however, sits a few points above 11%. For the management fees, the lender charges between 1 and 2% of the interest earned for each loan successfully repaid.

Unlike most other real estate crowdfunding companies listed here, RealCrowd doesn’t originate their own loans. On the contrary, it serves as intermediary connecting real estate companies, referred to as ‘sponsors’ to accredited investors. On the company website, you will find different commercial real estate projects that require funding. These go on to detail such important factors as the minimum investment needed as well as the projected return on interest.

Investment requirements:

Real Crowd is not a loan originator but connects investors to real estate institutions for direct investments. The minimum initial requirement on the platform is, therefore, on a per-project basis. Different projects will also have varied interest and maturity rates. The company will, however, sort different investment deals posted on their platform into four categories based on the level of investment risk.

Fundable platform stands out in the crowdfunding industry as one of the few companies that present their investors with different types of securities for their investment. Unlike most brands that will only present you with equity investments, most of Fundable investments gives you an option of equity or convertible debt. The company specializes in startup capital and business financing.

Investment requirements:

You will need to be an accredited investor or an institutional investor to invest here. The minimum you can invest here is set at $1,000. Note that all of the investments here are high risk. The biggest downside to this is that most startups and business finance investments don’t have a guaranteed rate of return either in interest or dividends.

FundThatFlip is one of the few crowdfunding enterprises on this list that specializes in residential property and debt investments. A significant portion of their investments is dedicated to providing fix-and-flip loans and multifamily debt. And it is only recently that they started venturing into commercial debt. We feature it here because of the level of transparency exhibited on their platform and because the company also maintains the lowest Loan-To-Value ratios. This has for the longest time averaged around 60% which effectively translates to having the lowest number of loans in default.

How does it work?

Fund That Flip is a loan originator that takes deposits from accredited and institutional investors and advances it to house flipping companies. It, however, carries out due diligence on these companies and their properties to ensure that the LTV or the After Repair Value doesn’t exceed the required minimums. Interest on investments for investors start from 9% per annum. But Fund That Flip will deduct between 1 and 2% as management fee on the interest earned. The company has its minimum investment set at $5,000.

ArborCrowd describes itself as the first crowdfunding platform developed by an established real estate institution. It is a commercial property investor specializing in funding multi-family units, apartments, and mixed-use buildings. They have a unique approach to investing that has the backing of an equally unique investment screening process. Only a few property investment projects that express interest in being leveraged by Arbor Crowd ever make it to the listing. Note also that ArborCrowd will only list these projects one at a time.

Investment requirements

Like the rest of the crowd funded real estate platforms on this list, ArborCrowd will only accept deposits from accredited or institutional investors. The minimum investment required here is rather steep and currently set at $25,000. In return, investors get equity shares in the funded projects with promised interest rates that range from 12-20% per annum.