Best Real Estate Crowdfunding Platforms to Diversify Your Portfolio

Want to diversify into real estate, but don’t have $50,000 for a down payment on an investment property?

Consider real estate crowdfunding platforms, which let you invest with as little as a few dollars.

You also avoid the labor and expertise required to both find good deals on properties and manage them once bought. Real estate crowdfunding investments are truly passive, as opposed the headaches that landlords take on.

Before we dive deeper into the 18 most prominent real estate crowdfunding investments, here’s a “cheat sheet” table comparing eight of the best real estate crowdfunding platforms in 2023, all of which allow middle-class investors (not just wealthy accredited investors):

What Are Real Estate Crowdfunding Investments?

Crowdfunded real estate platforms come in several broad categories. Before choosing platforms to invest with, make sure you understand the variations between and within real estate crowdfunding investments.

Crowdfunded REITs & Pooled Funds

A real estate investment trust or REIT is a fund that owns a pool of real estate-related investments. Other pooled funds work similarly, but don’t qualify as REITs under the Securities and Exchange Commission’s (SEC’s) rules. More on that distinction shortly.

Those pooled crowdfunding projects might include properties directly owned by the fund, known as an equity REIT. In contrast, a debt or mortgage REIT owns debts secured by real property.

Equity REITs tend to offer more long-term growth potential. After all, they own properties, and real estate usually appreciates in value over time.

Debt REITs tend to offer better cash flow, paid out to investors in the form of dividends. Both long-term growth and ongoing cash flow and dividends play a huge role in reaching financial independence and retiring early.

Some REITs combine both direct ownership and loan investment strategies for a bit of both, such as Fundrise.

You can buy and sell shares in publicly-traded REITs through your regular brokerage account. But private crowdfunded REITs work differently: you buy shares directly from the company. That makes share prices far less volatile, since they don’t trade in real time on stock exchanges. But it also makes them less liquid, and difficult to sell. If you want to sell within the first few years of buying shares, many real estate crowdfunding platforms buy them back at a discount from what you paid.

Note that not all pooled funds operate as REITs. Real estate investment trusts must pay out at least 90% of their profits each year in the form of dividends. While that sounds peachy on paper, it prevents them from growing their portfolio by reinvesting profits in new properties. That severely limits their growth potential.

Pooled funds that don’t get taxed as REITs fall under no such restrictions. That gives them more flexibility to reinvest profits and grow their funds’ portfolios, and therefore grow share values.

Fractional Ownership in Individual Properties

Instead of investing in a pooled fund that owns many properties, you can buy fractional ownership in a single property.

For example, Arrived, Ark7, and Lofty all offer this type of investing. For $20-100, you can buy shares in a single-family rental property. You collect rental income from that property in the form of distributions, and when the property sells, you get a piece of the profits proportional to your ownership share.

Some platforms even let you sell you shares at any time on a secondary market. More details below when we drill deeper into specific real estate crowdfunding platforms.

Individual Secured Loans

If you prioritize cash flow over long-term appreciation, look to earn interest from secured real estate loans over equity ownership.

Some crowdfunded real estate platforms instead operate as investment property lenders, offering loans to real estate investors. They raise the money for these loans from the public: you. You can review the available loans to fund, and pick and choose which ones you like. You decide how much you want to invest toward any given loan; sometimes as little as $10 (such as Groundfloor).

These loans tend to be short-term, fix-and-flip loans. Loans to buy fixer-uppers, renovate them, and then either sell as flips or refinance as rentals (the BRRRR strategy).

That makes them short-term investments — a rarity in the world of real estate investing.

Secured loans offer strong passive income, but no long-term appreciation potential. You own debt, not equity investments in any real estate assets.

Accredited vs. Retail Investors

Because of the way real estate crowdfunding is regulated by the SEC, many crowdfunding platforms don’t allow retail investors ​​— mom-and-pop investors like you and me.

Instead, they can only accept money from accredited investors. These are wealthy investors who must meet one of two criteria to qualify:

1. 1. A net worth over $1 million (not including equity in their primary residence) or
   2. Annual income over $200,000 for each of the last two years, and the expectation that you will earn at least that much again this year ($300,000 for married couples filing jointly).

At the risk of getting preachy, the SEC basically says, “We don’t think anyone but the rich is sophisticated enough to invest in high-risk, high-return investments, so we’re not going to let them invest how they see fit.” Good thing we have paternal Uncle Sam telling us what we can and can’t do with our own money.

So, in any discussion of the best real estate crowdfunding investments, you have to divide them into two camps: those available to accredited investors only and those available to all the rest of us.

Best Real Estate Crowdfunding Platforms in 2023 (Non-Accredited Investors)

Since most of us don’t qualify as accredited investors, let’s start with the best crowdfunded real estate platforms for retail investors.

Note that nearly all of these offer long-term investments only. Most real estate crowdfunding sites expect you to leave your money invested for at least five years.

Rather than fixating on management fees for these crowdfunded real estate platforms, I focused on rate of return. The sad fact is that real estate investment platforms can hide fees easily, so their disclosed fees mean little. For example, if they do maintenance in-house, they can bill as much as they want as an hourly rate, to pad their profit margin.

Finally, we removed LEX Markets and Rich Uncles/Modiv from this list. LEX Markets closed down their real estate crowdfunding platform in early 2023 due to lack of usage. And after NNN REIT bought crowdfunded real estate platform Rich Uncles and rebranded it as Modiv, they launched it as a publicly-traded REIT. So, neither counts as a current real estate crowdfunding investment.

1. Fundrise

I invest in Fundrise myself, and have been largely happy with it so far.

They operate using the pooled fund model, like a REIT. Technically, they operate many REITs, and spread your money among them depending on your investment settings.

Fundrise invests in a combination of residential projects (mostly apartment buildings) and secured loans. They do own commercial properties in their investment portfolio as well, along with some single-family rental properties. Your money spreads among many of their real estate projects, which helps you diversify.

The more you invest, the more control you have over how your money is allocated. At the $10 and $1,000 levels, you have no control at all. With a minimum of $5,000, you have a little control, opting between their Supplemental Income, Balanced Investing, and Long-Term Growth allocations. If you invest $10,000 or more, you get access to their Plus plans, which allow you to “allocate a portion of your portfolio to more sophisticated real estate strategies that evolve over time based on new market opportunities.”

They also offer a Premium option with a minimum investment of $100,000, available only to accredited investors. This allows access to more private offerings, including fractional ownership in individual rental properties.

Fundrise allows you to set up automated monthly investments and automated dividend reinvestment. They’re also partnered with a custodian to allow investing through a self-directed IRA.

Fundrise paid an average return of 22.99% in 2021. Their Long-Term Growth fund earned 25.12%. In 2022, Fundrise earned a far lower return — but still delivered a positive return. Compare that to the S&P 500 and publicly-traded REITs, which lost 15-20%.

Read our full Fundrise review here for more information.

Bottom Line: A great starting point for diversified real estate investing.

Minimum Investment: $10

Type: Pooled funds holding residential & commercial real estate and secured debts.

2. Groundfloor

Groundfloor takes a completely different approach to real estate crowdfunding investments.

Unlike pooled REITs such as Fundrise and Streitwise, Groundfloor is a hard money lender. They issue short-term fix-and-flip loans to real estate investors, and you can pick and choose which loans you want to invest in. Most loans are for 12 months, plus or minus a few months.

Best of all, you can invest as little as $10 toward any given loan.

When the borrower sells the property or refinances, you get paid back with interest. You can turn around and reinvest the money in new loans or pocket your money and walk away.

Of course, all loans come with risk of default. But because Groundfloor lends investment property loans, they aren’t subject to the regulation on homeowner mortgages. Groundfloor also lends a much lower loan-to-value ratio (LTV) than homeowner loans, usually in the 50-80% range. So if the borrower defaults, Groundfloor simply forecloses and sells the property to recover their — your — money.

I invest in Groundfloor myself and have been mostly happy with it so far. A few loans have had borrowers default, and I continue to watch how Groundfloor handles the process. But the overwhelming majority of their loans repay on time.

The trick? To invest a little money in a lot of loans.

As for returns, Groundfloor grades each loan on risk, and charges borrowers accordingly. They pay between 6.5-14% interest on loans, depending on risk grade.

Groundfloor also raises money by borrowing money directly in the form of private notes. They currently pay 7% interest for 12-month notes.

Bottom Line: A high-yield, easy way to invest in real estate-secured debt without a long-term commitment. (Read our full Groundfloor review here.)

Minimum Investment: $10

Type: Individual short-term loans, private notes.

3. Stairs by Groundfloor

Groundfloor also offers another option for investing even shorter-term, through their Stairs mobile app.

It works similarly to Concreit (more on them momentarily), where you invest money in a pooled fund owning many loans secured by real estate. They market Stairs as an alternative to a high-yield savings account, where you can withdraw the money at any time with no penalty. But make no mistake: it’s still an investment, not a deposit at a bank guaranteed by the FDIC.

Stairs pays a baseline interest rate of 4%, but you can earn an extra 1% by setting up recurring transfers into your account. You can add a further 1% in returns by agreeing to round recurring transfers up to the nearest dollar, for a total potential return of 6% on your money.

It makes for a great short-term investment to park your money while saving up a down payment for a rental property!

Bottom Line: Simple, diversified investment in loans secured by real property.

Minimum Investment: $1

Type: Pooled short-term loans secured against real estate.

4. Concreit

Similar to Stairs by Groundfloor, Concreit shakes up the real estate crowdfunding model by letting you withdraw your money at any time.

That kind of liquidity is nearly unheard of among other real estate crowdfunding platforms. There’s no early withdrawal penalty on your principal, although if you pull money out within the first year, they ding your dividend payout by 20%.

Concreit pays a fixed 5.5% annual dividend yield. But they pay dividends every single week, making it another strong investment for compound interest. So, even if you withdraw your money in the first year and take the 20% dividend penalty, that still leaves you with a dividend yield of 4.4%.

Like many other platforms, Concreit owns a portfolio of loans secured by real property. At last check, they owned 155 loans across the US.

Because these are short-term loans, they turn over quickly and leave Concreit with plenty of liquidity. You can pull your money out whenever you feel like it, although Concreit can’t guarantee instant liquidity because they’re not an FDIC-insured bank. When you go to withdraw funds, Concreit flashes a warning that it can take 30-60 days to actually hit your bank account.

It’s a beginner-friendly crowdfunding platform, and you can start investing with as little as $1.

Bottom Line: A reliable, relatively liquid way to invest in real estate short-term, with a 5.5% dividend yield. (Read our full Concreit review here.)

Minimum Investment: $1

Type: Pooled fund owning short-term real estate-secured loans.

5. Arrived (Formerly Arrived Homes)

Rather than pooled REIT funds or loans, Arrived buys single-family rentals, and sells fractional shares in them.

You can buy fractional ownership in a rental property for as little as $100. That’s pretty spectacular for buying into an individual property, and beaten only by Ark7 and Lofty (more on them momentarily).

Investors earn both rental cash flow and property appreciation. Arrived pays out rental cash flow quarterly to all investors, proportionate to their ownership percentage. And when they sell the property, typically after five to seven years, the profits get split proportionally among all investors. For each property, they show a city-level average of both historic appreciation and annual cash flow, to provide a sense for expected returns on each.

They do charge a one-time, up-front fee for finding the deal, plus a 1% asset management fee each year.

In 2022, Arrived started offering short-term Airbnb rental properties in addition to long-term rentals. That helps you further diversify your real estate portfolio. 

See the 90-second demo video below for how buying shares on Arrived works.

Bottom Line: A simple and affordable way to buy partial ownership in individual rental properties. (Read our full Arrived review here.)

Minimum Investment: $100

Type: Fractional ownership in single-family rental properties (both long-term and short-term vacation rentals).

6. Ark7

Created in 2019, Ark7 works similarly to both Arrived and Lofty: you buy fractional shares in single-family rental properties, short-term rentals (Airbnb), and multifamily properties.

Shares start at $20, and after an initial holding period, you can sell your shares at any time through Ark7’s online marketplace. While the website urges a minimum holding period of one year, the platform lets you sell after just three months. That adds liquidity to a type of investment that historically has none — a huge advantage over Arrived.

Ark7 doesn’t charge transaction fees when you sell either, for a fast, free exit. When and if you sell shares, you also don’t have to mess around with receiving funds in cryptocurrency, unlike competitor Lofty.

I also like that Ark7 maintains some ownership interest in each property, to maintain skin in the game. Ark7 holds onto 1-20% ownership, depending on the property. They keep their fees extremely transparent: they charge a 3% acquisition fee when they buy the property, and that’s it. No annual asset management fees, no liquidation fees, nothing. Ark7 manages around three-quarters of their properties directly, and charges 8-15% in property management fees (vacation rentals cost more to manage).

One drawback to Ark7? They’re still relatively small. They own 20 properties in six states, although they’re expanding quickly.

Ark7 pays out monthly distributions on the fractional shares in rental properties that you own, for a steady source of passive income.

Bottom Line: A simple, transparent, liquid way to buy shares in rental properties with just $20.

Minimum Investment: $20

Type: Fractional ownership in single-family rentals, short-term rentals, and multifamily properties.

7. Lofty

I just recently discovered Lofty.ai, and I confess I’m impressed.

They operate on a similar model as Arrived and Ark7: you buy fractional ownership in single-family rental properties. Lofty.ai prices newly issued shares at $50 apiece, for an even lower minimum investment. But they take the fractional ownership model a step further, assigning that ownership to blockchain tokens.

Why the high tech approach? Because it lets investors buy and sell shares in rental properties on a secondary market. In other words, you can buy or sell your shares to other investors at any time. That makes Lofty.ai shares a much more liquid investment than offered on most real estate crowdfunding site.

That all being said, selling shares comes with a few caveats. First, they charge a 2.5% fee when you sell shares on their secondary market. Second, you receive payment in one of several cryptocurrencies, which doesn’t exact rev every investor’s motor. However, one of those cryptocurrency options is USD Coin (USDC), a stablecoin backed 1:1 by cash and U.S. Treasuries. But you still have to convert it to U.S. dollars and transfer it to your bank account to, you know, actually spend or use it. Lofty.ai assures us that payout in U.S. dollars is coming soon.

Regardless, it’s still an outstanding platform for fractional investing in rental properties, with far more liquidity than most real estate crowdfunding platforms. As a special offer for our readers, you’ll get a $25 referral bonus from Lofty.ai after buying your first property share.

Bottom Line: Buy shares in single-family rental properties with just $50, earn daily rental income and sell at any time — if you don’t mind jumping through a few cryptocurrency hoops. (Read our full Lofty review here.)

Minimum Investment: $50

Type: Fractional ownership in single-family rental properties.

8. Streitwise

I also have money in Streitwise, which owns several commercial office buildings.

Specifically, Streitwise targets secondary markets including Indianapolis and St. Louis. The founders have over $5 million of their own money tied up in the investments, for skin in the game.

From 2017-2022, they paid out average dividends of 8.96%. However, in late 2022 the dividend yield dropped to 5.6%, and the net asset value (NAV or share price) dropped to $9.23. That marks a drop from the original NAV of $10.

Why have the yield and the share price dropped? Because Streitwise’s flagship tenant opted not to renew their commercial lease, and Streitwise has not completely refilled the office space yet.

Like Fundrise and most other real estate crowdfunding investments, Streitwise expects you to leave your money in the pot for at least five years. If you sell early, they buy back your shares at a discount.

Unfortunately, Streitwise requires a high minimum investment of $5,000. That puts it out of reach for some investors and will spook away other crowdfunding-curious investors.

I appreciate Streitwise’s transparency around their returns. It bothered me when Fundrise removed their future return forecasts from their website, even though returns didn’t decline. (Although I get that they did so to avoid nasty letters from the SEC.)

Regardless of their current struggles, Streitwise’s sponsor Tryperion Holdings has a strong track record. I expect them to both fill the commercial property and expand their portfolio over the next year or so.

Bottom Line: A higher-yield, easy starting point for passive commercial real estate investments. (Read our full Streitwise review here.)

Minimum Investment: $5,000

Type: Pooled REIT fund holding commercial real estate.

9. RealtyMogul

RealtyMogul splits the difference, offering two REITs for non-accredited investors. Their Income REIT pays higher dividends with less emphasis on long-term growth. It currently pays a 6% annual dividend, distributed monthly. As of early 2023, it’s paid an average annual return of 9.21%.

Their Growth REIT pays a lower dividend yield of 4.5%, with a greater emphasis on long-term appreciation. It hasn’t actually delivered beaten the Income REIT yet though, with an average return of 8.08% to date.

Both REITs hold multifamily real estate and commercial properties. The minimum investment remains high however at $5,000.

RealtyMogul also offers private placements, where you can buy fractional ownership in single properties. Investors can even take advantage of 1031 exchanges with some of these real estate syndications. However only accredited investors can participate in these, and the minimum investment ranges from $25,000 to $50,000.

Launched in 2013, RealtyMogul has a relatively long history in the real estate crowdfunding investment space, and has generated solid returns over that time. They enjoy a strong reputation among investors for their transparency and ease of use.

Bottom Line: A reliable crowdfunded real estate platform, with both income-oriented and growth-oriented options.

Minimum Investment: $5,000

Type: Pooled REITs that buy and manage commercial and multifamily properties.

10. Yieldstreet

Yieldstreet offers a mix of many alternative investments. In addition to real estate, they provide access to art, consumer loans, commercial loans, vehicle loans, legal finance, cryptocurrencies, nonfungible tokens (NFTs), and more.

However Yieldstreet only offers two funds for non-accredited investors: their Prism Fund and more recently their Growth & Income REIT. The Prism Fund is a mixed-asset fund that owns a blend of the assets outlined above. As the name suggests, the Growth & Income REIT only owns real estate investments, which include three multifamily properties (in Tucson, Dallas-Fort Worth, and Atlanta). Yieldstreet plans to expand the fund to include more properties in the near future.

Unfortunately, Yieldstreet raised the minimum investment in these funds from $500 to $5,000 in 2022.

I like that Yieldstreet doesn’t charge an early share sale penalty. But they do limit share buybacks to 5% of their total outstanding shares per quarter, on a first-come, first-served basis.

Some of their other investment offerings available to accredited investors include:

• • Art Equity Fund II: High-end art. Minimum Investment: $10,000
  • Pantera Early Stage Token Fund I: Digital assets such as NFTs and cryptocurrencies. Minimum Investment: $25,000
  • Dallas-Fort Worth Multifamily Equity I: A three-story apartment complex in the Dallas-Fort Worth metro area. Minimum Investment: $15,000
  • North Shore Boston Multifamily Equity: A mid-rise apartment building on Revere Beach in Boston’s North Shore suburb. Minimum Investment: $5,000
  • Harbor Group Multifamily Equity Portfolio II: A portfolio of 19 multifamily apartment buildings across several cities. Minimum Investment: $40,000

Yieldstreet also offers a series of structured note portfolios, funds which own loans to blue chip companies.

When you’re ready to diversify beyond real estate into even more alternative investments, start with the Yieldstreet Prism Fund.

Bottom Line: A broad range of asset classes for diversification, but only accredited investors can pick and choose individual funds and investments.

Minimum Investment: $5,000

Type: Funds owning real estate, art, digital assets, secured debt, and more.

11. DiversyFund

As a growth-driven REIT, DiversyFund takes a different approach, reinvesting all of their profits in new properties to build their real estate portfolio faster.

They estimate they can return 10-20% per year on investors’ money through their aggressive growth strategy. Impressive returns by any standard, if they deliver on their forecasts.

The drawback is that investors receive no dividends in the meantime. Investors must rely on long-term appreciation and growth to deliver their returns in 5-7 years.

Which raises a related issue: you can’t easily sell your shares early. DiversyFund is a long-term investment, hard stop.

However DiversyFund does allow a low minimum investment ($500), making it accessible to many individual investors. Their strategy centers around multifamily apartment buildings spread among many cities nationwide.

Bottom Line: A long-term investment focused on growth rather than dividends.

Minimum Investment: $500

Type: Pooled REIT that buys and manages multifamily properties.

12. HappyNest

A relative newcomer, HappyNest offers a fund owning three commercial properties.

Their mobile app is undeniably slick, with a “round up your spare change” feature for automated saving and investing. Better yet, it works with your existing credit and debit cards. To cap off their pitch, they let you invest with as little as $10.

Sadly, that’s where the advantages end. Their portfolio of properties is tiny: a CVS store, an AutoZone store, and FedEx Ground shipping center. Hardly a poster portfolio for diversification.

HappyNest also doesn’t make it easy to sell shares. If you sell within the first three years, they hit you with a penalty. And they don’t guarantee they’ll buy back your shares — ever.

Worst of all, they hide their fee structure deep within their SEC circular, while advertising “No broker or platform fees!” all over their website. In reality, they pay 3% of gross money raised to the Sponsor, plus 3% in additional fees when they buy or sell a property. They charge a further 0.0417% monthly asset management fee to their Advisor. The thing is, they are the Sponsor and Advisor.

Not exactly a beacon of transparency in the world of real estate crowdfunding sites.

Bottom Line: A slick mobile app, but equally slick marketing tricks to hide fees on an unenticingly small property portfolio.

Minimum Investment: $10

Type: Fractional ownership in commercial real estate buildings.

Best Real Estate Crowdfunding Investments for Accredited Investors

Have more than a few nickels to rub together?

Wealthier investors have more options for real estate crowdfunding investments. Here are a few of the better ones.

1. CrowdStreet

CrowdStreet is considered by many to be the best real estate crowdfunding platform in the market.

They’ve consistently scored high returns for investors, ranging from 11.5-26.4%. Of the 473+ commercial real estate properties they’ve bought, they’ve sold 44 of them, with a strong track record on returns.

Accredited investors can invest in either a pooled portfolio of properties or individual deals, allowing plenty of flexibility. However investment minimums start at $25,000 — hardly chump change.

CrowdStreet also requires a long-term investment, with no easy options for selling shares early. Plan to leave your money invested in these real estate offerings for at least five years.

Bottom Line: Strong returns for accredited investors willing to leave their money tied up for years.

Minimum Investment: $25,000

Type: Both pooled funds and individual commercial and multifamily properties for syndication.

2. EquityMultiple

EquityMultiple allows you to invest in either property-secured debt or equity in individual properties. They claim strong returns since launching in 2015, averaging 16.8%.

The minimum initial investment is technically $5,000, although most projects require a minimum of $10,000-20,000. Still, that proves more reasonable than most real estate crowdfunding investments catering to accredited investors.

The platform focuses on commercial real estate. They’ve recently started offering several tax-friendly ways to invest in real estate, including Opportunity Zones and 1031 exchanges.

As with most real estate crowdfunding investments, expect to leave your money tied up for years. These are long-term, illiquid investments, but you get direct access to large scale real estate investment deals.

Bottom Line: Strong long-term returns with multiple investing options and several tax-friendly structures available.

Minimum Investment: $5,000

Type: Secured debt or equity in individual properties.

3. Roofstock One

Know the turnkey rental property marketplace Roofstock?

In 2019, they launched a crowdfunded investment program called Roofstock One. The platform allows you to invest in two distinct ways. First, you can buy Common Stock: shares in a pooled REIT that owns dozens of single-family rental homes across many states. The REIT’s assets constantly shift as they buy and sell properties.

Alternatively, you can buy Tracking Stocks: shares in portfolios of specific properties. For example, one portfolio might own eight rental properties in the Atlanta metropolitan area. You effectively become a fractional owner in each of those eight properties.

Both types of shares distribute dividends quarterly, and appreciate in value over time. Investors can generally expect dividends in the 3-4% range, plus annual appreciation in the 3-5% range.

My concern about Roofstock One is the lack of clarity around redeeming (selling) shares. There’s no secondary market to sell shares — although Roofstock One says they may build one — and there’s no guarantee that you can sell shares back to Roofstock either. Their offering circular outlines a Redemption Plan for Common Stock, but caps it at 1.25% of outstanding shares each quarter, with no legal obligation to redeem shares. As far as I can see, there’s no policy at all for buying back Tracking Stocks, although the platform will likely sell the properties after five or six years and pay out investors then.

As a final nod, Roofstock publishes both an excellent real estate investing blog and one of the best real estate investing podcasts available today. I tip my hat.

Bottom Line: An easy way to diversify among single-family rentals, but double check your available exit strategies.

Minimum Investment: $5,000

Type: Fractional shares in portfolios of single-family rental properties.

4. HoneyBricks

A newer real estate crowdfunding platform launched in 2022, HoneyBricks offers an intriguing premise: trading tokenized shares of real estate syndications on a secondary market.

Token prices — share prices — are typically set at $1,000, and most sponsors allow you to buy a single token. That makes it the cheapest possible way to invest in real estate syndications.

After an initial holding period of at least one year, you can sell tokens on a secondary market hosted by HoneyBricks. That also makes it a far more liquid way to invest in syndication projects than traditional investing.

And fee-free for investors: HoneyBricks only charges fees to the sponsor, not to you. Of course, sponsors can still pass those fees along to investors, but you can evaluate each sponsor’s fees on a case by case basis.

HoneyBricks comes with its share of downsides however. They haven’t yet established much of a track record, having only offered six syndication projects by the start of the second quarter in 2023. Plus, they only allow accredited investors, which takes some of the shine off of the relatively low minimum investment for syndications.

As recently as six months ago, their website lacked some crucial information, such as details about the secondary market, and clear sponsor fees and return waterfalls for individual investments. They’ve made some improvements in that regard, with a more transparent website and Knowledge Base.

I love the concept behind HoneyBricks, and I’m curious to see how it continues to evolve.

Bottom Line: Low-minimum, high-liquidity way to invest in real estate syndications, but the platform is too new to demonstrate much of a track record.

Minimum Investment: $1,000

Type: Fractional shares in multifamily properties (multifamily real estate syndications).

5. AcreTrader

To diversify even further, you can add farmland to your portfolio with AcreTrader.

AcreTrader buys farmland to lease to farmers. Each parcel goes into a unique LLC, and as an investor you buy shares in that LLC, making you a direct owner of the property. Each share equals one-tenth of an acre.

You collect annual dividends in the 3-5% range, and when AcreTrader sells the property after five or ten years, you of course get a proportional payout on the appreciation. AcreTrader aims for an internal rate of return (IRR) of at least 7-9%, but claims that the historical IRR on farmland is 12%.

The minimum investment varies based on the price per acre of the parcels AcreTrader buys. AcreTrader typically requires you to buy at least one to four acres. Expect a minimum investment in the $10,000 – $25,000 range.

Technically, you can sell your shares privately to other investors. But don’t expect easy liquidity — AcreTrader doesn’t offer a built-in secondary market for buying and selling shares.

Bottom Line: Another way to diversify further, adding agricultural land to your portfolio.

Minimum Investment: $10,000 – $25,000

Type: Fractional shares in farmland parcels.

6. PeerStreet

Similar to GroundFloor, PeerStreet lets you pick and choose individual loans to fund.

You can also set up automated investments as new loans become available after setting your investing criteria.

On the plus side, the loans come with short terms, so you don’t need to tie up your money indefinitely. It also comes with a relatively low minimum investment of $1,000.

But I see little advantage here over GroundFloor — which lets retail investors participate, and provides more transparent interest rate and default rate information on its website.

Bottom Line: An easy way to invest in real estate-secured debt without a long-term commitment.

Minimum Investment: $1,000

Type: Individual short-term loans, private notes.

FAQs About Real Estate Crowdfunding Sites

Still not sure how to decide on the best real estate crowdfunding platforms in 2023?

If you have plenty of questions, you’re not alone. No one wants to invest their hard-earned money without feeling confident that they’ll actually get it back (hopefully with a hefty return). Here are a few common questions about real estate crowdfunding investments.

How Did You Choose the Best Real Estate Crowdfunding Sites?

We included all “mainstream” real estate crowdfunding sites in the list above. We don’t love all of them, as noted in our summaries for each. But we wanted to include information about all of the best-known crowdfunding platforms.

As for our favorites, that’s easy: we invest our own personal money in them, so we know the platforms well.

What Is Real Estate Crowdfunding?

Real estate crowdfunding falls under its own regulation by the SEC, as private investments that are registered with the SEC and allowed to be marketed to the public. The underlying investments vary, but most often include fractional ownership in properties (equity crowdfunding), loans secured against real property (debt crowdfunding), or a pooled fund that owns multiple properties or loans (or a combination).

How Does Crowdfunding Work in Real Estate?

Rather than buying shares on public stock exchanges (like a publicly-traded REIT), you buy shares directly from the crowdfunding company. Crowdfunding is not liquid — you can’t typically sell at a moment’s notice. Again, these are private investments, and in most cases you redeem your investment by selling it back to the platform. They may hit you with a penalty if you redeem your investment early. 

How Can You Start in Real Estate Crowdfunding?

Visit each website directly, and there you can create an account and buy shares by entering your bank account information. Consider starting small with crowdfunding companies that let you invest with just $10 (such as Fundrise, Groundfloor, or Concreit) or $100 (such as Arrived).

Can You Crowdfund in Commercial Real Estate?

Most crowdfunded real estate involves commercial properties. That includes everything from office buildings to retail, multifamily apartment buildings to industrial.

But some real estate crowdfunding investments feature residential properties. For example, Arrived lets you buy fractional ownership in single-family rental properties. Groundfloor offers private loans secured mostly by single-family homes.

Can You Make Money from Crowdfunding?

Of course, or else no one would invest! I personally invest in and have collected money from many of the crowdfunding platforms above, including Fundrise, Groundfloor, Concreit, Streitwise, Arrived, and more.

Is Real Estate Crowdfunding Safe?

All investments come with risk, and real estate crowdfunding is no exception. The risk varies depending on the crowdfunding platform and the underlying investment, and the returns vary accordingly. For example, Concreit and Stairs by Groundfloor come with less risk and more liquidity than many investments, and pay moderate returns as a result. Other investments come with higher risk and higher returns. But one advantage to real estate is that the underlying investment can’t become worthless (unlike a stock). It might lose value, but the land and the building can’t disappear.

How Much Do I Need to Start Investing in Real Estate Crowdfunding?

As little as $10 or $100, for some platforms such as Fundrise, Groundfloor, Arrived, and Concreit. Other platforms require more, from $500 up to $25,000 or more.

What’s the Difference Between Public & Private REITs?

Publicly-traded REITs trade on public stock exchanges. You can buy and sell shares at any time, with no penalty. That provides great liquidity and lets you invest with little money, but it also comes with some downsides. Share prices tend to be volatile, and worse, they correlate with stock markets. That defeats much of the purpose of diversification.

In contrast, you buy shares in private REITs directly from the company, and typically sell them back to the company when you’re ready to redeem them. That makes for poor liquidity, but very little volatility or correlation with stock markets.

What Is an Accredited Investor?

A wealthy investor with either $1 million or higher in net worth or an income over $200,000 for the last two years ($300,000 for married couples).

Pros & Cons of Real Estate Crowdfunding

Pros include low correlation to stock markets, potentially low investment minimums (especially compared to buying properties directly), often strong cash flow, and the potential for high long-term returns. Cons include weak liquidity, often long-term commitments, and sometimes difficulty in finding all the information you want to know about an investment. Also, some real estate crowdfunding platforms only allow accredited investors, another major drawback.

Final Thoughts

I love real estate crowdfunding investments almost as much as I love buying rental properties myself. They offer a great way to diversify your portfolio, and therefore reduce risk, without sacrificing on returns.

In fact, I invest in real estate as an alternative to bonds. When you can earn similar annual returns on passive crowdfunding projects as you can from mutual funds or the stock market, while diversifying to a completely separate asset class, you reduce risk without sacrificing return on investment.

But no investment comes risk-free, and you need to fully understand the risks inherent in each real estate investment opportunity before committing your money. Do your due diligence, invest wisely, and come back and let me know about your experiences with crowdfunded real estate platforms!♦

About the Author

G. Brian Davis is a real estate investor and cofounder of SparkRental who spends 10 months of the year in South America. His mission: to help 5,000 people reach financial independence with passive income from real estate. If you want to be one of them, join Brian and Deni for a free class on How to Earn 15-50% on $5K in Real Estate Syndications.