Crowdfunding in real estate offers two primary advantages.
- Investors are not required to make a large capital investment. The minimum investment for some deals is $500.
- Investors are not responsible for property management. The crowdfunding platform’s management team handles the upkeep and management of the property.
There are over 100 real estate crowdfunding platforms to choose from. Here are six crowdfunding platforms that cater to the average investor.
Fundrise offers investment in real estate projects ranging from single-family rental homes to commercial property renovations. Investors can invest for as little as $500 with Fundrise’s Starter Portfolio. For a minimum investment of $1,000, you can upgrade to one of three Core Plans — Supplemental Income, Balanced Investing, or Long-Term Growth.
RealtyMogul allows investors to invest in multi-family properties and debt securities through their two Real Estate Investment Trusts (REITs) — MOGULREIT I and MOGULREIT II. MOGULREIT I requires a $1,000 minimum investment. MOGULREIT II requires a $5,000 minimum investment.
Investors can invest in multi-family properties and student housing through Rich Uncles’ BRIX REIT. The NNN REIT gives investors the opportunity to invest in commercial, industrial, and retail properties leased to corporate tenants. Both REITs only require a $500 minimum investment.
The 1stREIT Office REIT provides investors the option to invest in commercial office properties for a minimum investment of $1,000. Since its inception, the fund has returned a dividend of 10%.
The Upside Avenue REIT gives investors the chance to invest in multi-family apartment buildings, senior living facilities, and student housing for a minimum investment of $2,000. The REIT has been in existence since 2002 and has averaged a 15 percent return on investment since inception.
Unlike the other crowdfunding platforms mentioned, Groundfloor uses crowdfunded investments to provide real estate investment loans to borrowers. The rate of return on these loans ranges from 5.5 percent to 26 percent, based on the risk level.