Real Estate Crowdfunding has gained significant attention in recent years as a means of investing in real estate projects. This article provides information, insight, and opinions on the best real estate crowdfunding investment platforms for 2023.
Table of Contents
What is Real Estate Crowdfunding?
Real estate crowdfunding is a method of raising capital through the collective effort of individuals, allowing businesses or projects to obtain funding from a large number of people facilitated by crowdfunding platforms. These online real estate platforms serve as intermediaries that connect investors with real estate investment opportunities.
Real estate crowdfunding sites provide individuals with access to various parts of the real estate market, such as multifamily real estate properties, commercial real estate properties, real estate debt, and more. Using these online real estate investing sites, normal people can invest in individual real estate offerings, real estate funds, real estate loans, and more.
Real estate investors can contribute varying amounts of money towards these projects, pooling their resources together to support the ventures they find attractive. This method has gained popularity due to its low investment minimums, the potential for diversification, the access to a range of investment properties, and the fact that some of the funds are secured by real estate.
While not for everyone, crowdfunding real estate is a great way to start building a real estate portfolio.
Quick Comparison of Top Real Estate Crowdfunding Platforms
(sorted by our rating and then alphabetically)
Pros of Real Estate Crowdfunding
- Access to institutional-quality commercial real estate investments
- Low minimum investment (compared to traditional real estate investing or investing in individual properties)
- Strong diversification options (asset types, geos, risk profiles, etc.)
- Ability to earn passive income from real estate
Cons of Real Estate Crowdfunding
- Lack of liquidity (depending on the platform and investment)
- Risk of loss
- Limited control over management decisions
Overall, while real estate crowdfunding offers opportunities for diversification and access to new investment options, it is important for investors to carefully evaluate the risks involved before committing their funds.
How to Choose the Best Real Estate Investing Platform
To evaluate these online real estate investing platforms, we researched and analyzed a wide range of factors, including:
- The variety of real estate-related investments and real estate assets offered by each platform (individual commercial real estate projects, residential real estate, private real estate investment trusts or REITs, short-term real estate debt or loans, or other alternative investments)
- The number of commercial real estate investments currently available on the platform
- The minimum requirements to invest (accredited status, minimum investment amounts, etc.)
- The fees (one-time and ongoing) charged to the investor
- The historical performance and reputation of each platform
- The educational materials and other information provided by each company
The Best Real Estate Crowdfunding Platforms
The list below includes our picks for the best real estate crowdfunding sites. Whether you’re investing $10, $1,000, or $100,000 (or more), these platforms will provide access to real estate investments previously unavailable to private individuals.
Periodically, we will review and update our top picks for the best crowdfunded real estate sites.
Frequently Asked Questions
How popular is real estate crowdfunding?
Hundreds of thousands of people looking to start investing in real estate have flocked to crowdfunding platforms and opportunities.
In a recent market size and forecast report, Zion Market Research valued the Global Real Estate Crowdfunding Market size at ~ $44.65 Billion in 2022. Furthermore, Zion expects the crowdfunded real estate market to grow to ~ $1,743 Billion (yes – that’s $1.7 Trillion) by 2023, which represents a compound annual growth rate (CAGR) of ~ 58% between 2023 and 2030.
The takeaway is that those looking to invest in commercial real estate and other forms of equity crowdfunding are taking advantage of the available real estate crowdfunding options.
How much money do I need to start investing?
Some real estate investment platforms allow investors to start with as little as $10 (typically by investing in funds), while other platforms have minimums of $10,000 or more.
Do I need to be an accredited investor?
Some real estate crowdfunding platforms allow accredited investors only, while others welcome all investors. See above for more information.
How risky is real estate crowdfunding?
Real estate crowdfunding offers the opportunity to invest in real estate with lower minimums and potentially higher returns, but there are certain risks associated with this type of investment.
This type of real estate investment requires careful due diligence to ensure the legitimacy and track record of the platform, the project sponsor, and the specific project being offered. Investors should carefully evaluate the risks before participating in real estate crowdfunding deals.
To mitigate platform risk, investors should consider distributing their investments across various real estate crowdfunding platforms.
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The information on this website is for educational purposes only. Hybrid Mike, LLC does not offer investment advice or brokerage services of any kind. Furthermore, we are not recommending that website visitors buy or sell any particular product, service, or investment. Website visitors should conduct their own due diligence before making any investments.