The Best Real Estate Crowdfunding Sites for Non-Accredited Investors

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I’ve talked quite a bit about real estate crowdfunding and how it’s mostly for accredited investors (in short, a person who makes > $250k/year or has a net worth > $1 million). I’ve used the word “mostly” because most offerings are truly only available for the accredited investor. In fact, if you are one, you should be checking out these platforms.

However, the SEC updated their rules back in 2015, opening up the world of real estate crowdfunding to non-accredited investors as well. Platforms have expanded opportunities to non-accredited investors over the years due to demand.

Most of the offerings available are in the form of REIT or eREIT investments. If you’re not familiar with what a REIT or an eREIT is, see the quick primer on the subject at the bottom of this post.

I’ve been asked here on this site and on our Passive Income Docs page to review the options for non-accredited investors, so I’ve created a list, and here are the factors that went into making up this list:

  • My own personal experience with the sites as an investor
  • Reputation among experienced investors in the space
  • Financial stability and market share of the sites

So without further ado, here are The Best Real Estate Crowdfunding Sites for Non-Accredited Investors.

Rich Uncles

Don’t mind the funny name, this crowdfunding site means serious business and hopes to have you cash-flowing passive income immediately. They have one of the most (if not the most) experienced management team among all crowdfunding sites.

Rich Uncles has two different offerings: A REIT that is focused on commercial Triple-Net properties and the other and newest offering is a REIT that is focused on Student Housing, a sector that I think is extremely intriguing. In fact, I’ve invested in it myself. Minimums are $500. Find out more…

Fundrise

Fundrise markets themselves as the alternative to investing in stocks and bonds. They provide access to private market real estate through their eREITs and eFunds.

They help you build a portfolio depending on your goals – supplemental income, balanced investment, and/or long-term growth. Fundrise was one of the very first platforms to offer options for non-accredited investors. Minimums are $500. Find out more…

RealtyMogul

RealtyMogul was also one of the earliest players in the space. They specialize in a variety of deals – larger commercial equity deals to mobile home park funds to their well-known MogulREITs.

There are two different options available to non-accredited investors – MogulREIT I which invests in debt and debt-like securities, and MogulREIT II which focuses more on appreciation and income through investments in multifamily properties. These MogulREITs are known to provide steady, reliable returns for as little as $1000. Find out more…

Groundfloor

Groundfloor touts itself as “the first and only real estate lending marketplace publicly available to all investors, regardless of wealth or income.” You’re able to invest in debt deals with minimums of only $10.

Loan terms are usually 6-12 months and they state that typical loans have returned 10-12% on an annual basis. Find out more…

What is an eREIT?

In short, a traditional REIT (Real Estate Investment Trust) is a company that owns real estate assets and is typically traded on major stock exchanges.

Crowdfunded REITs or eREITs (depending on how the platforms coin them) are similar to traditional REITs except that they are not traded publicly. You invest in the companies directly, giving you access to diversified, private commercial real estate assets that are professionally managed.

Summary

Both accredited and non-accredited investors invest in real estate as a means to grow and maintain wealth. Previously, options for non-accredited investors were primarily through direct ownership and publicly traded REITs.

However, as real estate crowdfunding has matured as a viable means of investing passively in real estate, the number of offerings available for non-accredited investors has grown as well. Real estate crowdfunding is growing at a rapid rate and it seems like it’s here to stay.

Any other sites / offerings that you think should be on this list?

 

5 COMMENTS

  1. I first got into this space on the platform RealtyShares. I invested solely in their debt offerings because I thought that was the safest way to invest (it was my first crowdfunding experience).

    I had no problems whatsoever with the 3 separate holdings I invested in. I received the interest as stated and more importantly had return of my principal.

    I have now mainly got into the realm of accredited investing with a syndicator but if I didn’t have access to this I would be comfortable with the crowdfunding avenue

  2. I’ve invested in all types of deals (debt, equity, and reit) on 3 platforms (RealtyMogul, RealtyShares, and Fundrise). I’m satisfied with my experience thus far with consistent returns, easy process, and a good alternative to traditional real estate

    I do have a concern with the shift towards non-accredited investors because it will start attracting investors who don’t know all the ins and outs of real estate investing. Also, some investors will start to use these eREITs as a substitute for a savings account which is not its purpose.

    Fundrise, for instance, is going towards all deals being open to non-accredited investors which is causing me to start to pull my money out of Fundrise and I don’t think I’m the only one. This shift will leave them only inexperienced investors, increase the risk profile, and probably lower returns.

    I’m not saying that crowdfunding should be ONLY for accredited but platforms that start to shift towards the general public will start to have unintended consequences. This is similar to what happened with P2P lending and eventually, companies were opening fake accounts and loans

    • I see what you’re saying but I believe there’s a huge difference between P2P and RE Crowdfunding in the sense that there’s a true collateralized asset involved. Personally I care way more about how well the platforms are vetting the opportunities vs. who’s investing in them. Although I can see your concern that if platforms aren’t held as accountable by less experienced investors, then they can relax their underwriting standards.

  3. I haven’t invested with these particular platforms but I think it’s important to know who is actually running the show at the property level. What happens when a particular deal (equity or debt) goes south. Are they ready to step in and manage the property manager or manage the property themselves? I’ve seen quite a few deals either default on the debt side or not live up to the proforma on the equity side. And this is in a robust economy. I worry what will happen when the market turns. The good aspects are that the REITs are diversified amongst many properties and the fees are relatively lower than the traditional private non-traded REIT.

  4. I don’t have a ton of experience investing with these platforms, but I’m planning to jump in later this year. I think these platforms are just scratching the surface and this type of investing will continue to grow and become more an more mainstream.

    My only concern is that as more platforms come online increased competition will push them to take more and more questionable deals, which could lead to higher default rates. I guess we’ll just have to wait and see.

    Thanks for the rundown, there is a lot of great information here.
    -Ray

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