The Best Real Estate Crowdfunding Sites

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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:

RealtyShares

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.

EquityMultiple

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. 

PeerStreet

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.

Patch of Land

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 

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.

RealCrowd 

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.

Alphaflow

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.

Summary

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?

25 COMMENTS

  1. I am a HUGE fan of real estate crowd funding. As of Aug’16, I have been invested in PeerStreet for a 6.39% return (ROI as of 31-May-17). PeerStreet is boasting ZERO principal losses since opening their doors. That is not to say there have not been defaults, but that they have been able to return all principal to investors when a deal goes south. Shows they can manage risk. Isn’t that the whole point of investing in tangible property – having the asset collateralize your investment and a low LTV??

    Great post PassiveMD. I enjoyed the read and will be looking into those platforms that offer a bit more diversity in the commercial space.

  2. I was researching P2P lending and was initially drawn to Lending Club and Prosper; however, after stumbling upon real estate crowdfunding, there is no comparison when one platform offers you collateral with your investment. That’s like ordering a sandwich at a deli and being asked if you want bacon! Every time, the answer is YES!

    What sold me on PeerStreet was 1) the team, their experience and their track record, 2) their underwriting process, and 3) the amount of information that they publish on the individual investments (i.e. appraisals).

  3. Thanks for the Review! There’s very little useful info out there to make comparisons. That prompted me to start a Blog on Real Estate Crowdfunding recently. By the way, RealtyMogul does not require accreditation for their MogulREIT. I verified this today with one of their investor’s reps. Appreciate it!
    Harry http://www.EasyMoneyRealty.com

  4. Thanks for sharing. I’ve done zilch with real estate crowd funding. I’ve done quite a bit with REITS in the past, but only in our tax advantaged accounts. I’ll have to do more research. I’m seeing a lot of people going this route, but I’m not entirely convinced. Equities have served me quite well so far (15%+ annual returns the past 10 years).

  5. I’ve never used real estate crowd funding but I am definitely intrigued. One that you didn’t mention that I’ve heard about is Fundrise. I don’t know much more than that but it seems like they are also players what appears to be a crowded real estate field. Thanks for sharing!!!

    • Thanks for stopping by. If you pull the trigger someday I’d love to hear about it. I probably should’ve mentioned Fundrise. I invested in one property early on through them before they changed their model. Thanks to your suggestion I’ll look into them again.

  6. I’ve invested with most of these, probably one of my favorite platforms is Crowdstreet, and was suprised that it was not on your list. It’s similar to Real Crowd, in that it markets deals to investors, and you invest directly with sponsor. Then once invested in a deal Crowdstreet just is a document/investor management portal for the sponsor. Have you invested in crowdstreet? Any particular reason not?

    • I am somewhat familiar with CrowdStreet and have heard good things about it as well. No particular reason except that I started with RealCrowd and have continued to invest with sponsors I was introduced to on there. I’ll also take a look around CrowdStreet and perhaps it’ll make it on the next version of the list. Thanks!

  7. I’ve also tested most of these sites. Peerstreet: 3 out 4 investments went ok. One is going to foreclosure so waiting on that. I might try Alphaflow or other debt funds for debt investments.
    Realtyshare: ok so far but sponsors are of lesser quality than Realcrowd and Crowdstreet. You r investing in a Realtyshare LLC which in turn invests in the deal.
    Patch of land. Don’t recommend
    Realcrowd and Crowdstreet: stronger sponsors and deals in general. Invest directly with sponsor and eliminates the platform middleman. These r my two favorite sites now.

    Crowddd.com website is a good resource and community to vet platforms and sponsors.

    Btw, I know investors in the Hard Rock deal. Good thing u passed. It’s not going well.

    • Thanks for sharing your experience. Awesome information. Foreclosures are inevitable with the number of deals out there. You just hope the platform you’re investing in is well-equipped to handle them.

      Having a VIP pool cabana reserved for you every time you visited the Hard Rock was enticing, but found better places to put my money. Thanks for the update!

    • Sounds like I need a post on this. But a simplistic overview is this:
      – REITs are companies that invest in real estate by owning and managing a portfolio of real estate related investments (properties & mortgages). When you invest in a REIT, you buy shares and invest in the company.
      – RE Crowdfunding gives the investor the ability to invest in a single property & deal. When you invest in a crowdfunded property, you can invest directly in that property by buying shares of the deal. Actually though, some crowdfunding platforms have started their own REITs as well.

      Hope that’s a good initial explanation. Thanks for sharing the post!

    • Hope it’s okay if I jump in here again. Fundrise – you do not need to be accredited. RealtyMogul allows non-accredited investors into their MogulREIT. There might be others. I could not find anything about exclusions for Buckeyes! (I live close to the OH border). Would love to hear if anyone knows otherwise. I think information sharing is crucial since there are so many platforms out there. Thanks! http://www.EasyMoneyRealty.com

  8. I am doing Fund that Flip and Patch of Land and so far OK. I know that Patch of Land had a foreclosure before, but seems ok now. I hate the accredited investor business.

    • Thanks for sharing your experience. I’ve heard of Fund that Flip but haven’t tried it… yet. I’m sure as volumes increase and the market shifts, there will be a number of foreclosures. I’m just very interested to see how these companies handle them.

      I do somewhat agree with the accredited investor qualification. The intent is good – to protect investors that may not be able to financially handle the loss of their investments. Unfortunately, it also leaves some investors who could really benefit from these types of investments from being able to participate.

  9. Have you tried Ground Floor? Looks like you don’t have to be an accredited investor on there. I’m thinking of taking the leap.

  10. I use 6 platforms investing thru my Solo 401K…Sharestates, Fund that Flip, Patch of Land, Lending Home, Realty Shares and Equity Multiple. Favorite is Sharestates. Avg 10% returns. Am concerned about future downturn and eventual increase in foreclosures.

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