The JOBS act in 2012 was HUGE because it made it legal to crowdsource funding online. Shortly after, access to both debt & equity real estate deals exploded for investors. Since 2012, over 100+ real estates crowdfunding sites have come into existence. A good number of them have already closed shop with new ones appearing on a weekly basis. So how do you determine what the top real estate crowdfunding sites are? Honestly, that’s a tough task.
Well, I’ve been involved in real estate crowdfunding since 2014 and have been able to perform my own due diligence on a good number of those 100+ sites. I’m a fully subscribed member to all of the ones mentioned on my list and I keep a close eye on all of these platforms to invest in new deals. In future posts, I’ll review each of these crowdfunding sites in more detail.
The factors that went into making up this list include:
- My own personal experience with the sites as an investor
- Reputation amongst experienced investors in the space
- Financial stability and market share of the sites
Here is my list of The Best Real Estate Crowdfunding Sites:
I’ve invested most heavily in this platform. They have a wide variety of investments – debt, equity, residential, multifamily and commercial. They always seem to have good deal flow and opportunities to invest in. They’re a well-funded platform and I believe they’ll be around for years to come.
This platform is one of my more recent favorites because some of the big deals I’ve found on their site. They focus mostly on commercial real estate deals, both debt & equity. They might have a slightly lower volume at this point than some of the other sites, but they say it’s due to their extremely stringent vetting process. I’m okay with that because ultimately it all comes down to how well the platforms vet the deals. To make it even more special, they personally co-invest in every deal, adding some of their own skin in the game.
This site has a great source of deal flow. They focus mostly on residential debt, but you’ll occasionally see a multifamily or commercial deal. They typically partner up with other lenders and provide the platform for them to get the funding. Gets high marks in the industry for transparency and excellent management.
They market themselves as the alternative to investing in stocks and bonds. They provide access to private market real estate through their eREITs and eFunds. You can build a portfolio using the various products to meet your goals. Some are available to non-accredited investors.
My first investment in the crowdfunding space was with Patch of Land as documented here. It helped that I met their founders in person and seemed like genuinely good people. They specialize in debt deals, both residential as well as commercial. They’re well-funded and have a good number of deals to choose from.
RealtyMogul is one of the earliest players in the space. They specialize in a variety of deals, both debt & equity and from residential to commercial. They’re well-funded and have an experienced management team. I remember one deal in particular where you could own part of the Hard Rock Hotel. It was tempting, but I ended up passing. I wonder how that deal is doing.
This site specializes in connecting investors to vetted syndicators, focusing mostly on commercial real estate equity deals. Their deals have higher minimums though, typically $25-50k. My first deal with a syndicator was found through this site.
This one’s a little different and its model really intrigues me. I’m in the process of investing with them right now. One concern I had with crowdfunding is that in order to mitigate some risk, I felt like I had to invest in multiple deals at the same time and it’s sometimes a lot of work to make that happen and keep track of everything. Alphaflow takes your investment and basically buys fractional shares of crowdfunding deals and you end up invested in over 70-100 loans at once.
Real estate crowdfunding has really shaken up the real estate investing landscape by dramatically increasing the level of access to deals for the average investor. It helped me dip my toes into the real estate investing world and has now become a significant portion of my personal portfolio. In fact, I’ve invested nearly $200,000 in crowdfunding deals over the last three years.
Obviously it’s not without risk and if/when there’s ever a downturn in the housing market, you will likely see some more publicized losses. However, the better the platform, their management, and their vetting process is, the better off you’ll be.
Please remember that you have to be an accredited investor to invest in any of these sites.
I’ll share my personal crowdfunding results in the next post.
Anybody else have some favorites that I didn’t mention here? How’s your experience been with some of these sites?