Want to jump straight to the best? Diversyfund is definitely the best real estate investing platform for most people.
Almost since the beginning of recorded history, the acquisition of real estate has been a surefire way to build wealth. This was as true in ancient Rome as it is today. Unfortunately, throughout history, real estate has typically been available only at price points that are prohibitively high for most people.
At least until now. Why? Because the advent of real estate investment trusts (REITs) and crowdfunding allow everyday people to invest in real estate without coming up with the massive amounts of money necessary to buy entire buildings or large tracts of land.
Why Invest in a REIT?
Real estate investment trusts allow people to invest capital into large real estate portfolios in much the same way a stock allows them to invest capital into a large corporation. Like stocks, REITs are operated by publicly traded companies that appear on indexes like the New York Stock Exchange (NYSE). However, with a REIT, investors are buying a slice of the assets in the REIT’s portfolio as opposed to a percentage of the equity in a particular company.
REITs offer investors a significant number of advantages over purchasing real estate outright. First of all, investors can buy into REITs for significantly less money than it would cost to make a down payment on any piece of real property.
Secondly, shares in a REIT are a lot easier to liquidate than an entire building. Shares of REITs can be sold within minutes, whereas an entire building could take months or even years to sell because finding qualified buyers for real estate can be difficult even in hot markets.
Lastly, and perhaps most importantly, REITs have access to wider, more diversified portfolios than any 1 investor could feasibly put together. What this means is that REITs typically do better market research than individual investors, and the diversification across a number of properties lowers the risk of a major loss on 1 property crippling the investor’s financial outlook.
Who Does a REIT Benefit?
For the reasons listed above, REITs can be extremely beneficial to both smaller investors and the principal property owners. REITs allow for increased capital flow and portfolio expansion to the REIT itself, which should translate into greater dividends for its investors.
What Does a REIT Invest in?
REITs invest in a full range of income-producing real estate, from commercial to residential. The properties in REITs are typically spread across a wide geographic area to limit loss exposure in the event that 1 or more markets go south at the same time. Because REITs are focused on income-generating properties, the typical REIT investment into a residential property is usually a multifamily asset such as an apartment complex rather than a collection of single-family homes. However, REITs also invest heavily in commercial projects such as shopping malls, medical centers and industrial complexes.
Why not Just buy Real Estate?
The simple answer to this is that real estate is expensive — very expensive. This goes doubly so for investment property because the mortgages for investment properties are not insured by any federal government programs. That means the maximum term for financing is 15 years, and there is no 1st-time buyer option that offers a 3% down payment like you might find for a residential home purchase.
For most investors, the lack of capital for down payments combined with difficulty securing financing leaves income property beyond their means. The beauty of REITs is that they solve this problem because you can buy shares in a REIT for thousands of dollars instead of the tens or even hundreds of thousands it would cost to buy property flat out.
What is DiversyFund?
DiversyFund Inc. is a private REIT that has been set up to allow investors to buy shares for as little as $500. In addition to the low buy-in, DiversyFund doesn’t have a minimum net worth requirement for its clients, which many REITs do. This allows small investors to participate in the real estate market in such a way that has historically only been available to high net worth individuals.
DiversyFund still buys and sells real estate like a traditional REIT, but with an added focus on being user-friendly for small investors. In addition to the low buy-in, DiversyFund offers a number of user-friendly additional benefits, including:
- Webinars where investors can learn about REITs and how DiversyFund works
- Huge FAQ page that answers many questions potential investors may have
- Transparency — DiversyFund is publicly traded and subject to federal and state regulations regarding investment vehicles
In addition, DiversyFund actually is easy to contact through email and encourages its investors (or potential investors) to reach out with questions. This is a marked departure from many investment firms, where the person you want to talk to or ask questions is usually unavailable.
Why Invest in Real Estate Debt?
The high cost of real estate means an overwhelming majority of buyers need to borrow money to complete their purchase. One of the kick-on effects of this is that investing in the debt secured by real estate financing is almost as reliable as investing in real estate itself. There are several reasons for this.
First, most real estate financing is done over long terms, usually between 15 and 30 years, and with set interest rates that lock in profit for the lender or whoever owns the debt. Secondly, most property owners will defer almost any other expense in favor of servicing the debt created by their mortgage. This is true for both residential homeowners and commercial property owners. Lastly, even if the borrower defaults, the loan is secured by the property, which means lenders won’t be left holding the entire bag if the loan goes sour.
This has created a cottage industry for banks and private lenders who profit off the interest generated by real estate loans. That’s why, in addition to traditional banks, there are hard money lenders and companies like Groundfloor who finance properties, sell notes and invest in real estate debt by purchasing loans.
What is Groundfloor?
Groundfloor is a unique real estate investing option that is built on crowdfunding and offers a higher level of investor control. Unlike a REIT, where you invest in a particular property portfolio that’s been preselected by a fund manager, Groundfloor operates as a lender for a wide range of real estate investments around the country and provides the capital for that lending through investor funding. Then, Groundfloor allows individual investors like you to pick and choose which property (or properties) you want to invest in.
Groundfloor offers a menu of options for investors to choose from and a buy-in as low as $10! Each individual investment opportunity on Groundfloor features its own profile and an individual prospectus with its own interest rate, loan term and loan to after-repaired-value (ARV) ratio. This puts the power completely in your hands. This makes Groundfloor a great source of funding for home flippers or people who like to recondition distressed assets for profit.
Additionally, Groundfloor offers individual retirement accounts (IRA) to investors and even offers opportunities to become brokers.
Which Real Estate Investing Platform is Right for you?
As with all investments, beauty is in the eye of the beholder. If you’re someone who likes to dig into the details of what you’re investing in, or have a higher level of control over where your money goes, Groundfloor may be the best option. On the other hand, if you prefer to leave the investment decisions to a seasoned fund manager, DiversyFund or another REIT might be the way to go. But perhaps the best part about DiversyFund and Groundfloor is that the buy-ins are so low, you can really invest in both.
Benzinga’s Best Real Estate Investments
DiversyFund and Groundfloor are just 2 of many real estate investment options available for investors. If you want to know more about the best real estate investment platforms to invest in, Benzinga has a great list to consider.
securely through CrowdStreet’s
CrowdStreet is a commercial real estate investing platform where people can invest directly in commercial projects. Unlike a brokerage firm, CrowdStreet isn’t a middleman. Instead, the platform acts as a marketplace where investors can pick and choose the best deals for their time horizon and strategy.
Available investments range from family living spaces to office buildings to storage facilities and investors can sign up for a free membership. Your investment options are limited to what’s live on the Marketplace and you’ll need capital to build a diverse real estate portfolio. Only accredited investors can access deals through CrowdStreet.
- Investors looking for diversification away from stocks
- Real estate investors interested in new opportunities
- Accredited investors with lots of capital at their disposal
- Unique opportunities available
- Makes real estate accessible and understandable
- Investors can devote capital to both debt and equity offerings
- Offers quality education materials and answers to FAQs
- Real estate is highly illiquid
- Most properties require a minimum $25,000 investment
- You’re limited to what’s on the CrowdStreet Marketplace
DiversyFund isn’t your average crowdfunding platform. You’ll find that the company puts a twist on the traditional everyday crowdfunding platform, beyond anything you can find online with a simple Google search. You only have to look under DiversyFund’s skin one layer to surmise that DiversyFund is a conscientious developer and sponsor and helps hedge risk through improved vetting.
DiversyFund offers a multifamily real estate investment trust, the DiversyFund Growth REIT, and its main goals are to increase cash flow and resale value. It’ll automatically give you access to multi-million dollar real estate assets.
- Those looking for an alternative investment beyond stocks and bonds
- Individuals who aren’t sure they want to be landlords in the traditional sense
- Investors who aren’t accredited
- Only need to pony up $500 to get started
- Open to investors all over the world
- No expensive broker fees
- You’ll only be able to access “blind pool” investments, which means that you can’t opt out of specific properties
- There’s only one real investment option, the DiversyFund Growth REIT
securely through Arrived Homes’s
1% asset management fee
Arrived Homes is the latest player in the real estate investment industry. Differing from many of their counterparts, Arrived provides investment opportunities in the single-family homes, with a minimum investment of just $100.
Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investment. Groundfloor has great volume with more than 10 investments.
Individuals with small portfolios will also like the low $10 minimum and 0 investor fees. However, most of the loans are given to house flippers, and there is a risk of borrowers defaulting on their loans.
- Non-accredited investors: It is a good option for non-accredited investors who want to invest in an individual capacity.
- Private investors with small portfolios: Groundfloor charges a relatively small premium of $10, which private investors with small portfolios find attractive.
- Active-investors: Groundfloor is also ideal for investors who want to actively maintain and control their real estate portfolio.
- Charges the lowest minimums in the industry
- 0 investor fees
- Open to non-accredited investors
- Offers no bankruptcy protection
- High rate of an uncured default
- Many loans are for judicial-only states
securely through Roofstock’s
Between 8% and 10% of the purchase price
Roofstock is a registered real estate broker and marketplace specializing in single-family rental properties. Unlike its competitors, Roofstock isn’t selling shares of properties through trusts or LLCs — they’re connecting buyers and sellers directly. Roofstock properties are carefully vetted by a qualified home inspector and come with a rental income guarantee. That’s right, Roofstock will pay you rent even if your property stays vacant.
Financial data on each property is available even to those who are not clients and nonaccredited investors are welcome to join free of charge. Cash and financing options are available when making a purchase, but Roofstock will tack on their own fees in addition to closing costs.
As the solitary owner of your property, you’ll be expected to fund repairs out of your own pocket. Still, Roofstock is a great way to get a foot in the door of the real estate industry and their fees are much lower than most of the competition.
- Nonaccredited investors
- Real estate investors with limited capital
- Investors looking for income through rental properties
- Free to sign up
- No investment minimum
- Ownership of real assets
- Low fees 30-day money back guarantee
- Single-family homes only
- Need to finance repairs yourself
- Requires down payments
securely through Yieldstreet’s
Yieldstreet is an alternative investment platform that allows you to access unique, diversified and expert-reviewed investments. From real estate offerings to works of art, Yieldstreet offers investments that have low correlations with the general markets, meaning they can act as a new source of portfolio diversity.
Yieldstreet’s platform is easy to initiate and use — open an account in just a few minutes and begin browsing available investments before your account is fully verified. Due diligence information is easy to find and clearly laid out, and most investments include additional resources to learn more about the investment’s industry or category. Although the majority of investments are only open to accredited investors, anyone can invest in Yieldstreet’s Prism Fund.
- Passive income generation
- Accredited investors
- New investors looking for an intuitive platform
- Wide range of expert-reviewed alternative investments
- Investments that are pre-funded by Yieldstreet
- Prism Fund open to non-accredited investors
- Majority of investments only open to accredited investors
securely through Realty Mogul’s
Vary based on investment type
This unique online platform enables investors to handle the entire commercial real estate investing process right from their RealtyMogul dashboard. With rigorously vetted property listings, expertly managed REITs, and a commitment to providing top-notch service and support to its members, RealtyMogul makes commercial real estate accessible to everyday investors.
- Newer accredited investors who want access to pre-vetted properties
- Non-accredited investors seeking consistent cash flow from well-managed REITs
- Experienced real estate investors who want access to deal-specific information that allows them to perform their own due diligence more easily.
- Do everything from finding the investment property through to signing the legal documents and monitoring your portfolio, all in one platform.
- All properties are pre-vetted through RealtyMogul’s transparent and rigorous due diligence process.
- Investment minimums as low as $5,000
- Keep track of investments with regular updates posted directly to your dashboard
- Automated investing
- Individual property marketplace is only open to accredited investors
- Does not offer portfolio management
securely through Acre Trader’s
Between $3,000 and $10,000, depending
0.75% and 1% per year based on asset value
AcreTrader is an investing platform that makes it easy to buy shares of U.S. farmland and earn passive income, starting in just minutes online. The platform features actual parcels of farmland where investors can choose offerings to participate in based on their investment preferences.
Farm types range from Midwest Row Crop Farms to California Almond Orchards, but you don’t need to be an agriculture expert to get started. They have a very thorough underwriting process to vet the offerings, and present information in an easy-to-understand offering page on their website where you can get started with as little as $10k and 10 minutes.
- Investors looking for diversification away from stocks and other traditional assets
- Real estate investors interested in new opportunities
- Accredited investors with multi-year investment horizons
- Real, uncorrelated asset class with a history of consistently strong returns
- Highly qualified team with best-in-class underwriting practices
- The platform has some of the lowest fees that you’ll find in real estate investing
- Investment minimums are typically $10,000+
- Only open to accredited investors at this time
securely through stREITwise’s
Looking to diversify your portfolio and get into real estate? A real estate investment trust (REIT) that owns income-producing real estate may be a great place for you to start. Streitwise is a REIT that specializes solely in commercial real estate and has a low entry investment requirement of $5,000. Based in Los Angeles, Streitwise was created in 2017 by three veteran real estate investors who were frustrated that there wasn’t a good option for unaccredited investors to get into the commercial real estate market.
Streitwise focuses on investing in low-risk rental commercial real estate aimed at providing clients with consistent high-yield returns. The team invests in markets that are steadily growing and offer low-risk potential outcomes. While they’re still young and growing, the founders have built their business based on solid experience coupled with a vision for the future of investing. If you’re looking to diversify your current investment portfolio but feared real estate was too lofty a goal, Streitwise is worth exploring.
- Investors looking to diversify
- Investors with less than $200k in annual income
- Passive traders
- Consistent quarterly dividends
- Low, transparent fees
- Low investment minimum
- Convenient and easy to use
- Projections are uncertain
- Limited portfolio
- Limited technology
The beauty of modern investment vehicles like the DiversyFund REIT and the advent of crowdfunded real estate platforms like Groundfloor is that they shatter the financial barriers that have long separated regular people from making investments in real estate. Suddenly, you don’t have to put 20% down on a property or shell out tens of thousands of dollars on a rehab project to become a real estate investor.
For not too much more than the cost of a cup of coffee ($10 minimum on Groundfloor) or a fancy leather jacket ($500 minimum on Diversyfund), you can be a real estate owner. Better still, you can do it without having to break your back managing properties and collecting rents.
If you want more information about REITs or crowdfunded real estate opportunities, check out Benzinga where you will find a vast array of knowledge, investor advice and information — all designed to help you make the best decision about where to put your hard-earned investment dollars.
Frequently Asked Questions
Does DiversyFund pay Dividends?
That’s the idea. Assuming DiversyFund’s fund managers have selected good properties and real estate market conditions have been friendly (or at least gone according to the expert’s predictions), DiversyFund should pay a monthly dividend to its investors. To date, the company has paid dividends each month.
Can you lose money on a REIT?
Yes. All investments come with a risk of loss. While REITs are not necessarily as volatile as traditional stocks, there are a number of factors that can cause individual investors to lose money on a REIT. For example, an increase in interest rates translates to more debt service and less profit for many REITs. Also, a downturn in economic conditions can lead to increased vacancies.
DiversyFund accelerates your wealth creation by reinvesting cash flows from the properties — the DiversyFund Growth REIT is a public non-traded REIT designed to build wealth by investing in multifamily real estate and intends to build wealth over an approximate 5-year timeline. You don’t have to be an accredited investor to invest in Diversyfund. Open a Diversyfund account today.