Real estate has been turning average people into millionaires for years. It is a tool that people have used to generate wealth for centuries.
Now, in the era of the internet and technology, there are more options than ever for real estate investment. One of the newest opportunities is online crowdfunded real estate investing.
This is where people from all over pool their money together to back real estate projects. This could be an equity investment where you are an owner of the property. Or, it could be a debt investment where you are simply providing financing for a developer.
We already covered the best real estate crowdfunding sites for non-accredited investors. Now, we will be going over the best options available right now for accredited investors looking to get in on this new investment opportunity.
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First of all, let's identify what an accredited investor is.
The vast majority of these online real estate investment opportunities are available to accredited investors only.
Is this some elite "invite-only" club? Not quite.
There are massive regulatory agencies out there called the SEC and FINRA that screen through investment opportunities. The aim of these agencies is to protect average investors. The problem is, it is impossible for them to screen every single investment opportunity available.
Due to these regulations, some investment opportunities are only available to accredited investors. Since some investment opportunities are unregulated, government agencies expect that individual investors will perform his or her own due diligence before investing.
As we will explain in a minute, these accredited investors are often high-income or high-net-worth clients. These regulatory agencies understand that this type of investor has greater risk tolerance, meaning they can more safely be involved with these unregulated investments.
In order to be an accredited investor, you must meet one of these two requirements:
That said, if you meet either of these requirements, you qualify as an accredited investor. That means you are able to invest in both accredited and non-accredited investment opportunities.
EquityMultiple is an online platform designed for accredited investors to engage in professionally managed commercial real estate ventures.
This platform provides access to a variety of real estate investment opportunities across different markets. Unlike many other real estate platforms, EquityMultiple offers investments in equity, preferred equity, and senior debt.
It's tailored for experienced investors with a minimum net worth of $1 million or an annual income of $200,000 ($300,000 for couples).
EquityMultiple blends crowdfunding and traditional real estate investing, allowing investors to grow their wealth through avenues like self-directed IRAs, trusts, entities, and joint accounts.
As of 2023, the platform has achieved a net return rate of 17%, returning a cumulative total of $298 million to investors.
Click here to view EquityMultiple investments!
This platform is ideal for hands-on investors with at least $5,000 to invest, particularly those willing to hold onto their investments for several years due to the relatively illiquid nature of real estate investments.
If you're seeking more liquid investment options, other real estate platforms focused on publicly-traded REITs and individual properties might be more suitable.
AcreTrader is a crowdfunding platform founded in 2018, based in Fayetteville, AR, offering a distinctive investment opportunity.
Instead of traditional real estate, AcreTrader allows you to purchase shares in farmland. This enables portfolio diversification beyond residential or commercial properties.
Led by CEO Carter Malloy, who comes from a farming background and financial services, the company comprises a team of over 120 experts in finance, technology, and agriculture.
Investors can benefit from this platform by investing in farmland shares.
There are two primary avenues for potential returns: the appreciation of the land's value over time and annual rental payments, functioning as dividends.
Click here to view AcreTrader investments!
Anticipated returns range from 3% to 5% with lower risk than most other investments out there.
AcreTrader meticulously evaluates parcels of land, with only a small fraction, less than 5%, meeting their criteria.
The chosen parcels are then placed within distinct legal entities, separate from AcreTrader, which investors buy shares in. Investors indirectly own the land through these legal entities.
Investments often require a minimum of $8,000 to $20,000, and property holding durations usually span from five to ten years. Some properties offer minimum investment options of an acre or more.
The company's BBB accreditation and A+ rating testify to its trustworthiness and professionalism in the field.
CrowdStreet is an online commercial real estate investing platform that launched back in 2014.
CrowdStreet is an online platform that simplifies the process of investing in commercial real estate projects across the United States.
It connects individual investors with reputable project developers, making it easier for investors to access commercial real estate opportunities that they might not have discovered on their own.
CrowdStreet carefully reviews and vets developers, including conducting background and reference checks, to ensure the quality and legitimacy of the projects listed on the platform. This initial screening helps save time for investors who may not have the expertise or resources to perform such evaluations themselves.
However, investors are still encouraged to conduct their own due diligence on both the developers and the projects to understand the potential risks involved.
Click here to view CrowdStreet investments!
The minimum investment amount varies depending on the specific offering and is determined by the project sponsor.
In general, most individual projects and real estate funds available on CrowdStreet require a minimum investment of $25,000.
RealtyMogul formally launched in 2013.
RealtyMogul is an online platform that enables both non-accredited and accredited investors to invest in commercial real estate.
They offer two main investment options: public, nontraded REITs and private placements.
Click here to view RealtyMogul investments!
Private placements, available to accredited investors, include opportunity zone eligible investments and typically involve single property or small portfolio deals with varying investment minimums and a two to 10-year time horizon.
RealtyMogul boasts a significant track record, having financed over 27,000 apartment units valued at more than $5.7 billion and amassed a membership base of over 250,000 registered members.
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