Ark7 Review: Fractional Shares of Rental Properties with Full Liquidity?

The Big Picture On This Comprehensive Ark7 Review:

• • Ark7 is a real estate crowdfunding platform that enables investors to purchase fractional shares in rental properties, including single-family homes, multifamily units, and short-term rentals. With a minimum investment of $20, it offers an accessible entry point for both accredited and non-accredited investors. 
  • The platform provides a secondary marketplace where investors can buy and sell shares after a one-year holding period, enhancing liquidity compared to traditional real estate investments.
  • Ark7 maintains a transparent fee structure, charging a 3% acquisition fee and property management fees ranging from 8% to 15%. Additionally, it offers integrated IRA investing through a partnership with Millennium Trust Company, facilitating tax-advantaged investment opportunities. 

If you’ve been looking for a way to buy shares in single-family rentals, Ark7 offers a great option with low investment minimums.

A relative newcomer, Ark7 blends the fractional property ownership of Arrived with the liquidity and secondary market of Lofty. They do you one better: there’s no convoluted cryptocurrency involved, unlike Lofty’s real estate investing platform.

Here’s how Ark7 works and why over 100,000 investors have bought shares through the real estate company.

Ark7 at a Glance

Minimum Investment: $20

Prospective Returns: 5–15%+

Fees: 3% acquisition fee, 8–15% property management fee

My Take: An easy, polished, low-cost way for non-accredited investors to buy fractional shares in many rental properties.

What Is Ark7?

Ark7 is a real estate crowdfunding platform that lets you buy fractional ownership in multifamily and single-family rental properties. This includes traditional long-term rentals, medium-term corporate rentals, and short-term vacation rentals. While Ark7 originally restricted short—and mid-term rentals to accredited investors, it opened them up to everyone in 2023.

It starts with Ark7 finding and buying properties, leasing them out, and offering shares for sale on their marketplace. New property shares are priced at $20 per share. Ark7 retains a 1–10% ownership interest in each property and sells the rest as shares.

Once the initial shares have been sold and after a one-year waiting period, they start trading on a secondary marketplace. You can buy or sell shares at the pricing you set.

When you buy a share in a property, you’re entitled to receive both rental income as distributions and appreciation as the property rises in value.

Investment Structure Snapshot

Each property on Ark7’s platform undergoes thorough due diligence, including professional inspections, market analysis, and financial underwriting, before being offered to investors.

How Ark7 Works

After creating an account, you can browse available properties on Ark7’s marketplace. That includes both new property offerings and properties trading on the secondary market.

The platform features detailed information about each property, from the local real estate market to nearby schools to financials. The latter includes a breakdown of acquisition costs and fees, the cash flow numbers from rent to operating expenses, historical and projected appreciation, and more.

You collect passive income through monthly distributions while you own shares. These fluctuate based on the property’s cash flow but tend to be pretty consistent.

You can sell your property shares after a minimum holding period of a year. Ark7 offers a secondary market where buyers and sellers set the prices they will pay or accept for their shares.

You can invest in property shares on Ark7 through a self-directed IRA. Ark7 partnered with IRA custodian Millennium Trust Company to make IRA investing seamless (more details below).

Review of Ark7 Advantages

If Ark7 seems like it has plenty of pros, it does. Here are a few reasons I like Ark7 and have invested in properties on it myself.

Low Minimum Investment

Everybody has $20. And if you don’t, you have probably have bigger problems than wondering how you’ll add real estate to your investment portfolio.

Snark aside, the low minimum investment makes diversifying your real estate portfolio easy. You can invest as little as $20 apiece in many different properties, which helps spread and reduce risk.

Ark7 owns properties in 10 different real estate markets and continues expanding.

Non-Accredited Investors Allowed

You don’t have to be rich to invest in property shares on Ark7. (If you did, they’d set the minimum investment much above $20.)

Non-accredited investors can invest in long-term single-family rentals and, increasingly, in multifamily rental properties and short-term Airbnb rentals that previously only accredited investors could access.

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Liquidity & Secondary Market

Investors can buy and sell shares on Ark7’s secondary market, so you’re not stuck holding properties for five or more years like so many real estate investments. The secondary market works like a stock exchange: sellers set an asking price, and buyers offer a bid price. When the two overlap, a transaction takes place at that share price.

However, shareholders must hold the shares for at least one year before they can list them for sale on the secondary market. A one-year hold still makes Ark7 a rare short-term real estate investment.

Minimum holding period aside, this liquidity lets you diversify your real estate investments without the strong correlation to the stock market that REITs have.

Transparent Fee Structure

Ark7 charges a 3% sourcing fee to cover their expenses when they buy a new property.

After that, they only charge for in-house property management fees. These vary from 8% to 15% depending on the property, with long-term rentals typically costing 8% to 10% for property management and short-term rentals costing more.

Built-In IRA Investing

You can open a self-directed IRA on Ark7’s platform as a traditional IRA or a Roth IRA account.

Ark7 partnered with Millennium Trust Company, the same custodian that powers Fundrise IRAs, to serve as your IRA custodian. For their IRA custodian service, Millennium charges $100 per year per property, capped at a maximum of $400 per year. They waive this fee if your total IRA account balance exceeds $100,000.

With a self-directed IRA, you can also invest in almost any other type of real estate investment. Read more on investing in rental properties with an IRA and on how to invest in real estate with a 401(k).

Polished Web Interface & Mobile App

The Ark7 dashboard is clean and straightforward to use. You can easily browse properties and click on each to view its details.

Ark7 offers a full-functional mobile app that is intuitive and easy for mobile-first users.

Bank-Level Security & Encryption

Ark7 is quick to boast about its digital security features. Since you connect your bank account to it for funding investments and receiving payouts, Ark7 should also keep a close eye on security.

As real estate investment platforms go, it’s extremely secure.

Short-Term Rentals & Multifamily Available

Beyond long-term rental properties, Ark7 also offers short-term Airbnb rentals and multifamily rental properties. In late 2023, they started adding medium-term furnished corporate rentals for travel nurses and other stays of three to nine months, adding more ways to diversify your investments.

Ark7 Downsides

For all those advantages, Ark7 also has its fair share of cons. Make sure you understand all the risks and disadvantages before investing in Ark7’s platform.

Limited Track Record

Ark7 was founded in 2018, so there’s not much to review in terms of long-term performance. 

But that’s the beauty of the secondary market — they don’t have to sell any properties, ever. Whenever you want to liquidate your shares, you can do so, regardless of Ark7’s plans to list the property for sale.

Limited But Improving Access for Non-Accredited Investors

Historically, non-accredited investors could only buy shares in long-term residential properties but not short-term rentals or multifamily properties. The latter was restricted to “Ark7+” members, who have verified their accreditation status.

That started changing in 2023, as Ark7 began filing all properties with the SEC to allow non-accredited investors.

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1-Year Minimum Holding Period

Make no mistake: the one-year minimum holding period for property shares is far shorter than the usual length of time investors own real estate. That goes for owning rental properties directly, investing in real estate syndications, and other real estate crowdfunding platforms.

However, unlike other investing options, such as stocks and bonds, Concreit still removes liquidity for the first year.

No Automation

I’m a huge fan of automation in my savings and investments, where practical. Many real estate crowdfunding platforms, such as Fundrise, Groundfloor, and Streitwise, allow various forms of automated investing, including recurring transfers and automatic investments.

Ark7 does not offer this automation, which I understand—you want to be able to select specific properties based on their financials and the market. But it’s still worth mentioning.

Ark7 Review: How It Compares

The two most direct competitors are Arrived and Lofty, which also offer fractional real estate investing in rental properties.

Both have a longer track record, with more properties on their platforms. Arrived prices shares at $100, and Lofty prices them at $50.

However, each comes with a significant drawback compared to Ark7. Arrived does not offer a secondary market for buying and selling shares—you’re stuck with your property shares until Arrived sells the property. Arrived also doesn’t maintain any equity interest in properties; they sell all of it in the form of shares.

Lofty does offer a secondary market, but when you sell property shares, you get paid in cryptocurrency. That means you must go through the laborious process of converting that niche cryptocurrency into a more mainstream crypto coin and then convert it again to U.S. dollars. Talk about friction.

Technically, you can buy fractional ownership in properties on Roofstock and Fundrise, although Roofstock limits that access to accredited investors. Read our full Fundrise review for more details.

And, of course, you can buy fractional ownership in apartment complexes and other commercial properties through real estate syndications. The minimum buy-in is dramatically higher: $50–100K if you invest by yourself or $5K through a real estate investment club like ours. Bear in mind that real estate syndications also don’t offer any liquidity. However, you can earn much higher returns, often 15–30% instead of the 5–15% you’re likely to earn on Ark7, Arrived, and Lofty.

How To Contact Ark7 Customer Support

For general questions and account assistance, you can reach their team via email at support@ark7.com.

Ark7 offers one-on-one consultations you can schedule through their calendar booking system for investors wanting more personal guidance.

There’s also a help center where you can find answers to common questions about the platform and investment process.

Although they don’t offer immediate phone support like some larger platforms, these mediums cover the basics that most investors need.

FAQs Related to Ark7

Like any investment platform, aspiring investors have questions. Here are the most common ones I’ve encountered about Ark7.

Q. What Returns Can I Expect from Ark7?

Returns vary significantly based on the properties you choose and market conditions. Most properties generate 3% to 6% annual distributions, plus potential appreciation over time. However, like any real estate investment, there’s always a risk of loss. Do your homework on individual properties before investing.

Q. How Does Ark7 Compare to Fundrise?

Although we’ve discussed this matter in the previous sections, here’s a more concise answer:

Fundrise operates on a much larger scale. Its massive portfolio includes diverse commercial real estate investments. Ark7 takes a more focused approach, specializing in single-family homes, vacation rentals, and smaller multi-family properties.

Choose Fundrise for broad diversification, but consider Ark7 if you prefer investing in specific properties.

Q. Is Fractional Real Estate Worth It?

The answer depends on your investment goals and risk tolerance. Fractional real estate can provide passive income and appreciation potential with a low barrier to entry.

However, you’ll need to weigh factors like potential vacancies, market fluctuations, and platform fees. 

Q. How Does Ark7 Generate Revenue?

Ark7’s revenue model is straightforward. They earn through their 3% sourcing fee when acquiring properties and their property management fees (8-15% of collected rent).

In addition, they maintain a 1-10% ownership stake in each property so they can profit alongside investors through cash flow and appreciation.

Should I Invest in Ark7?

If you like the idea of investing small amounts to acquire fractional ownership in individual properties, Ark7 is, in many ways, the perfect platform.

It offers monthly income and strong liquidity, at least after the first year. It’s open to non-accredited investors, who can invest as little as $20. That makes it easy to diversify and spread your money across various properties.

But if you’d only consider a real estate investing platform that’s been around for a decade and done hundreds of property deals (like Fundrise), you may not feel comfortable with Ark7’s limited track record. Others may prefer the instant diversification of buying shares in real estate funds rather than individual real estate properties.

Personally, I started small with Ark7, but I like the platform and am gradually growing my portfolio of properties there. Consider it one more option for passive investment in real estate, offering solid potential returns with none of the property management headaches.♦

Does Ark7 appeal to you as a real estate investor? How do you find the range of investment options — enough to build a diversified portfolio?

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