The real estate market has the potential to pay investors a passive income, keep pace with inflation, and earn high yields from single family rentals, multifamily units, and commercial properties. But coming up with a big chunk of change for a downpayment is no mean feat. With crowdfunding, the industry is changing.
Crowdfunding allows investors to pool their money together to collectively make larger purchases than any single person could afford to do as a solo investor.
Below we examine the best real estate investing websites from owning single family rentals outright to claiming your share of commercial property without paying a fortune.
Best Residential Crowdfunding Site: Roofstock
Roofstock specializes in connecting investors to single-family properties across the United States.
Homes available through Roofstock are located in high-potential markets according to rental growth yields, trends in the local economy, and House Price Appreciation indexes.
Many single family rentals on offer already have existing tenants, and they’ve all been checked out in terms of potential returns on investment. In other words, not just any property is offered through Roofstock.
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InvestorMint Rating 5 out of 5 stars |
via Roofstock secure site
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Roofstock Guarantee
To inspire confidence among buyers, Roofstock offers a 30-day money-back guarantee.
If you’re dissatisfied with your purchase, you can hand the property back over to Roofstock and walk away from the deal.
One of the best parts of going this route versus the solo path is that you don’t have to make the day-to-day decisions that you would otherwise have to be responsible for as a landlord.
You can work with property managers who have already been screened and lined up. So, you don’t have to be bothered with hiring plumbers to fix leaky faucets or finding someone to mow the lawn.
Roofstock Fees
When you make a purchase, you’ll only be charged 0.5% in transaction fees.
Sellers are charged 2.5%.
These lower costs offer significant savings compared to the 6% commission that’s fairly standard across the industry.
Is Roofstock Worth It?
It’s important to remember that with Roofstock, you’ll be financially responsible for a single-family rental home.
You’ll have to be prepared to fork over at least 20% of the price for your down payment, and while you can expect to earn passive income each month from the rent, you’ll probably want to stick with this investment for a medium- to long-term period.
>> Related: Compare Roofstock Vs Fundrise
Best Commercial Real Estate Site: Rich Uncles
Rich Uncles solely offers investments in commercial properties.
As one of the best real estate investing websites, it has helped to open up the commercial real estate industry to everyday investors.
While you may have once been required to deposit a large chunk of change to buy commercial real estate, the barrier to entry is much lower these days.
With Rich Uncles, the minimum amount needed to claim your portion of a private real estate investment trust (REIT) is only $500.
You’ll be able to combine your money with the funds of other investors, and that pool will go toward investing in commercial rental properties.
| RICH UNCLES SPOTLIGHT | |
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InvestorMint Rating 4.5 out of 5 stars |
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Rich Uncles Tenants
According to Rich Uncles, tenants have all been highly vetted, and they include retail giants that are in virtually every suburb across the country — think restaurants, banks, drug stores, gas stations, etc.
This means that you can have higher confidence in the property tenants. It’s unlikely that a CVS, for example, is going to be unable to pay its rent.
Is Rich Uncles Right For You?
As an investor, you might not see high returns immediately because Rich Uncles aims for steady, long-term growth.
If you expect you will need cash near-term, Rich Uncles may not be the right choice for you because higher fees are charged to exit quickly.
The longer you hold the investment, the lower the fees usually.
>> Compare Rich Uncles Vs Fundrise
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Best Online Real Estate Site: Fundrise
Fundrise lets you invest in properties even with limited funds.
With just $500, you can play a small part in the overall investment of a particular property.
Still, you get a seat at the table and could reap your fair share of rewards.
Of course much larger amounts can be invested too if you want a greater share of the “pie”.
How To Invest In Fundrise?
With Fundrise, you can invest in the market either through an eREIT or an eFund.
A Fundrise eREIT gives you direct access to professional commercial real estate investors who handle private deals.
These deals would be otherwise inaccessible to most people.
Administrative fees are also reduced because Fundrise eliminates the “middleman”.
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InvestorMint Rating 4.5 out of 5 stars |
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Putting your money into an eFund means that you are part of a group that buys property in high-potential markets.
You have the potential to diversify your portfolio while earning passive income.
Is Fundrise Worth It?
Fundrise eREITs and eFunds are both long-term options, so either one of them would make sense if you have some time on your hands.
According to the terms of your contract, you won’t be able to access your invested cash for a fixed period, and you’ll be taxed on your dividends at your income rate.
You could use an IRA account, however, so that your dividends can be exempt from taxes.
>> Related: Compare Fundrise Vs Realty Mogul
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Best Real Estate Site for
Accredited Investors:
Origin Investments
If you’re an accredited investor, you probably already have a foot in the door, but you might still be able to do even more with your resources if you join Origin Investments.
This company has been around for a while, and they mean business. You need to come to them with at least $100,000 ready to go.
The principals at the company have also put a significant amount of cash down, so they’re fully invested just like any other partner investor. This means that they want to keep fees down and returns up just like you would.
| ORIGIN INVESTMENTS SPOTLIGHT | |
InvestorMint Rating 5 out of 5 stars |
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How Does Origin Investments Invest?
Origin invests in multifamily residential properties and office spaces. The management team tries to evenly split the focus between these two categories.
They’ve traditionally done well in their eight geographic regions, resulting in a historical average net annualized returns of 24%.
Over time, your returns may also be impressive but as with almost all real estate investments, leverage plays a role, so economic downturns can hurt returns.
Keep in mind also that this approach will affect your taxes and could make that yearly tax return a lot more complicated.
Best High-Yield Real Estate Site: LendingHome
Unlike some of the other real estate sites, LendingHome focuses on giving investors more immediate returns. Investors could see money coming back as soon as the day they invest, and there’s a potential for high yields.
LendingHome Investment Minimum
However, not just anybody can join in on the fun. LendingHome requires a minimum of $50,000 to start, and it only allows accredited investors to participate.
Also, the interest you earn is taxed as income, so those looking to lower their rates may want to think carefully about this.
| LENDINGHOME SPOTLIGHT | |
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InvestorMint Rating 4.5 out of 5 stars |
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How are the high yields produced? LendingHome is in the lending business, hence the name.
It offers borrowers a straightforward online lending process. Borrowers need to have all kinds of financial documentation and paperwork regarding the home they want to purchase so that LendingHome can be confident that they’ll be able to pay off their loans.
LendingHome does a lot of the legwork for borrowers, making the whole process simple.
As an investor in this process, you’ll be buying what they call platform notes, which are eventually pooled together and used to fund loans.
LendingHome is a big player in the industry, and you can select which types of investments according to risk level.
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Best Crowdfunding Real Estate Site: RealCrowd
RealCrowd connects two major parties together: accredited investors and real estate sponsors.
By taking the money offered up by those investors, the company can give real estate sponsors a significant amount of capital. That capital can then be turned into financial gains, which may be cashed out in anywhere from 1 → 10 years.
| REALCROWD SPOTLIGHT | |
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InvestorMint Rating 4 out of 5 stars |
via RealCrowd secure site
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Why place your trust in these sponsors? Because they’ve been thoroughly vetted.
Rising sponsors have transactional histories of at least $25 million, established sponsors have transactional histories of at least $50 million, and elite sponsors have transactional histories of at least $1 billion.
All sponsors invest in commercial properties.
RealCrowd Investment Minimum
If you want to take part in this process, you will need a minimum starting investment of between $25,000 and $50,000. In return, you’ll earn passive income and have the opportunity to diversify your portfolio.
It enables smaller investors to be a part of opportunities that may otherwise be financially out of reach.
Best Passive Income
Real Estate Site: EquityMultiple
EquityMultiple is another site that’s only open to accredited investors.
The benchmark necessary to join is having earned at least $200,000 in annual income for the past two years.
You could also be a part of EquityMultiple if you have at least $1 million in net worth, excluding your primary residence.
| EQUITYMULTIPLE SPOTLIGHT | |
InvestorMint Rating 4 out of 5 stars |
via EquityMultiple secure site
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Once you’ve passed this first test, things are pretty straightforward. You can get started with just $5,000, and you can choose whether to put your money in equity, preferred equity, or senior debt investments.
The people handling your cash on the other end are experienced sponsors who are continually researching opportunities in the commercial real estate field.
Properties could include:
- Offices
- Retail spaces
- Multifamily buildings
You have the potential to earn a regular amount of monthly income with EquityMultiple.
Syndicated debt offers the most protection and has a typical term between six months and two years.
Preferred equity is next with a typical term of one to three years.
With a targeted internal rate of return (IRR) of 14%, equity investors have the most risk and reward. That term is usually three to seven years.
You can log on to the site at any time to review investment opportunities and manage your account.
Best Real Estate Investing
Websites Wrap-up
When it comes to choosing how to approach these types of crowdfunding investments, be sure to carefully consider your overall portfolio, your investment goals and timeframe, and the resources that you feel comfortable investing.
| Real Estate Site | Investment Type | Minimum | |
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Single-family Rentals | 20% of purchase price | |
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Commercial | $500 | |
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eREIT / eFund | $500 | |
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Multifamily & Office Space | $100,000 | |
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Commercial | $50,000 | |
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Commercial | $25,000 | |
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Multifamily, Retail & Office Space | $5,000 |
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