Best Real Estate Crowdfunding Platforms

Best Real Estate Crowdfunding Platforms for 2023

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.

What is Real Estate Crowdfunding?

Real Estate Crowdfunding - City Skyline

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.

Logo - CrowdStreet
Our Rating:
4.5
Founded:
2013
Type:
Marketplace

Types of Investors

Accredited

Investor Details

# of Investors:
>300,000
Investor Fees:
1% – 2%+

Min Investment:
$25,000+

Deal Types

Real Estate Equity, Debt / Credit

Real Estate Asset Classes

Hotel / Hospitality, Industrial, Multifamily / Single Family, Office Buildings, Retail, Other

Deal Information

Amount Funded:
$4.16B
Deals Funded:
777
Deals Realized:
161

Returns (Historical Performance)

IRR:
18.1% historical IRR

Comments:
Average 1.54x multiple
Average project duration 3 years

PROs and CONs

Pros:
– 100% focused on real estate
– Wide range of asset classes
– Targeted funds (strategy, class, etc.)
– High historical returns
– Strong educational materials

Cons:
– Accredited investors only
– High minimums
– Not many open deals at this time

Our Opinion and Comments

This platform is 100% real estate focused and has generated strong returns for our investments.

We also appreciate the detailed deal information and educational materials provided. However, deal flow has been weak recently, which raises concerns.

Also, some investors (not us) were recently impacted by alleged fraud on the part of one sponsor. CrowdStreet has implemented new policies in response.

We consider CrowdStreet an excellent choice for accredited investors, and we participate in many deals on this platform.

Learn More
Logo - ArborCrowd - Horiz
Our Rating:
4.25
Founded:
2016
Type:
Marketplace, Sponsor

Types of Investors

Accredited

Investor Details

# of Investors:
Not Provided
Investor Fees:
1% – 2%+

Min Investment:
$25,000+

Deal Types

Real Estate Equity

Real Estate Asset Classes

Multifamily / Single Family

Deal Information

Amount Funded:
$40M
Deals Funded:
10
Deals Realized:
5

Returns (Historical Performance)

IRR:
~ 20% – 25%

Comments:
5 deals fully realized.

PROs and CONs

Pros:
– Deals are well vetted
– High projected returns (potential)
– Investors high up in credit stack

Cons:
– Accredited investors only
– High minimums
– Very low deal flow
– Fees can be high

Our Opinion and Comments

ArborCrowd offers accredited investors access to a small number of multi-family real estate projects from Arbor Realty’s deal portfolio.

These deals are highly vetted and offer potentially high returns. We also like that crowd investors are often high up in the credit stack (which reduces risk).

However, ArborCrowd’s deal flow is very low, which is surprising given the massive size of Arbor Realty’s portfolio.

When an ArborCrowd deal goes live, we move quickly.
Learn More
Logo - EquityMultiple
Our Rating:
4
Founded:
2015
Type:
Marketplace

Types of Investors

Accredited

Investor Details

# of Investors:
48,000
Investor Fees:
0% – 1.5%+

Min Investment:
$5,000 (Some Notes)
$10,000+ (Specific Deals)

Deal Types

Real Estate Equity, Debt / Credit

Real Estate Asset Classes

Hotel / Hospitality, Office Buildings, Retail, Other

Deal Information

Amount Funded:
$570M
Deals Funded:
150 (by June 2022)
Deals Realized:
245

Returns (Historical Performance)

IRR:
17% historical IRR

Comments:
5.88% weighted avg. return on notes
12.15% IRR on debt investments
54.32% IRR (1.79x multiple) on equity

PROs and CONs

Pros:
– Debt, notes, and equity investments
– Equity and preferred equity options
– Wide range of real estate asset types
– Very high historical IRR (equity deals)

Cons:
– Historical return info a bit confusing
– Small raises ($1M – $3M / deal)
– They are not a direct lender
– Some deals in weaker locations
– Deal information a bit limited

Our Opinion and Comments

EquityMultiple’s three-pillars offer something for everyone. “Earn” offers near-term income through real estate debt, “Grow” offers equity investments for long-term growth, and “Keep” offers short-term notes as an alternative to CDs and savings accounts.

Although the platform heavily promotes its debt and note offerings, its real estate equity deals generate the highest returns by far (cited as an unbelievable 50%+ on the company’s website). We like this platform, even through our realized IRR on the platform is far below this 50%+ figure.

Also, some equity deals are in questionable geos (in terms of growth).
Learn More
Logo - RealtyMogul
Our Rating:
4
Founded:
2012
Type:
Marketplace

Types of Investors

Accredited, Nonaccredited

Investor Details

# of Investors:
280,000
Investor Fees:
1% to 1.25%+

Min Investment:
$5,000 (Funds)
$35,000 (Specific Deals)

Deal Types

Real Estate Equity, Debt / Credit

Real Estate Asset Classes

Hotel / Hospitality, Industrial, Multifamily / Single Family, Office Buildings, Retail, Other

Deal Information

Amount Funded:
> $1B
Deals Funded:
Not Provided
Deals Realized:
226 (total) / 78 (equity)

Returns (Historical Performance)

IRR:
22.5% historical IRR (equity)

Comments:
Target IRR of 15% (overall)
Realized IRR 20.6% (overall)

PROs and CONs

Pros:
– Focused on real estate only
– Offering debt, fixed income & equity
– Strong equity deal flow
– Offers detailed deal info

Cons:
– Almost 60% realized deals in debt
– Average equity raise < $2M
– $35k min. for equity deals
– Some deals in weaker locations

Our Opinion and Comments

RealtyMogul is a strong crowdfunding contender. A high % of transactions are for debt, but equity deals represent the majority of funds invested.

Unlike some other platforms, RealtyMogul’s equity deal flow remains strong (currently showing 5 open deals and two REIT options). Also, RealtyMogul is generating higher than projected returns on individual equity deals and within its equity funds.

However, some deals are in questionable geos (in terms of growth).

We have yet to invest on this platform, but that may change soon.
Learn More
Logo - DiversyFund
Our Rating:
3.75
Founded:
2014
Type:
Marketplace, Sponsor

Types of Investors

Accredited, Nonaccredited

Investor Details

# of Investors:
28,000
Investor Fees:
2%+

Min Investment:
$550 (Venture Investment Fund)
$25,000 (Opportunity Fund)
$50,000 (Direct SPVs)

Deal Types

Real Estate Equity, Venture Capital

Real Estate Asset Classes

Multifamily / Single Family

Deal Information

Amount Funded:
Unknown
Deals Funded:
12
Deals Realized:
5

Returns (Historical Performance)

IRR:
~ 20%

Comments:
5 deals fully realized
Average 1.46x multiple
Hold times were 2 to 2.5 years

PROs and CONs

Pros:
– 100% focused on real estate
– Acting as marketplace and sponsor
– High historical returns (but few closed deals)
– Videos offer in-depth deal information

Cons:
– Invests in multi-family only
– Does not offer income deals
– Very limited deal flow
– Limited track record (5 realized deals)
– Few options for non-accredited investors
– Total fees seem a bit high

Our Opinion and Comments

DiversyFund has generated average IRRs of ~20% for accredited investors, but across a sample set of only 5 realized equity deals. Also, hold times were shorter than projected.

DiversyFund promotes the option to invest in DiversyFund (via two venture capital funds) above all other opportunities, which we see as a conflict of interest as DiversyFund’s revenue comes at the expense of investor returns.

Finally, instead of boasting about its high IRRs and its deal vetting process, DiversyFund brags about its 73% open rate on marketing emails. It also shows third-party ads on its website.

These points make DiversyFund feel like a marketing company in a crowdfunding platform’s clothing.
Learn More
Logo - Fundrise
Our Rating:
3.5
Founded:
2012
Type:
Marketplace, Sponsor

Types of Investors

Accredited, Nonaccredited

Investor Details

# of Investors:
1.95 Million
Investor Fees:
1%+

Min Investment:
$10 (Taxable Accounts)
$1,000 (IRAs)

Deal Types

Real Estate Equity, Debt / Credit, Venture Capital

Real Estate Asset Classes

Industrial, Multifamily / Single Family, Office Buildings

Deal Information

Amount Funded:
$2B (Entire Platform)
Deals Funded:
292 Active RE Projects
Deals Realized:
147 RE Projects

Returns (Historical Performance)

IRR:
5.29% “Avg. Income Return”

Comments:
Provided return info is unclear.
Claiming 5.29% avg return overall.
No real estate IRR info provided.

PROs and CONs

Pros:
– Established well-known company
– Open to all investors
– Strong diversification
– Exposure to venture capital
– Strong focus on efficiency

Cons:
– Returns by asset class not provided
– Overall platform returns sub-par
– Cannot invest in individual deals
– Too focused on their software platform

Our Opinion and Comments

Fundrise is interesting in that it acts as both the marketplace and real estate property owner / operator. Also, Fundrise boasts about its efficiency, but that does not appear to translate into higher investor returns.

Fundrise’s performance is unclear to us for several reasons:

  • They don’t show returns by asset class.
  • Their calcs say the S&P 500 has offered avg. income returns of only 2% since 2017. This is highly suspect.
We have one active and underperforming investment with Fundrise, but we can’t tell if that’s an anomaly or par for the course.
Learn More
Logo - YieldStreeet
Our Rating:
3.5
Founded:
2015
Type:
Marketplace

Types of Investors

Accredited, Nonaccredited

Investor Details

# of Investors:
447,000
Investor Fees:
0% – 2.5%+

Min Investment:
$100 (Real Estate Funds)
$10,000+ (Specific Deals)

Deal Types

Real Estate Equity, Debt / Credit, Legal Finance, Collectibles (Art / Wine / etc.), Private Equity, Venture Capital, Other

Real Estate Asset Classes

Industrial, Multifamily / Single Family, Office Buildings, Other

Deal Information

Amount Funded:
$3.8B
Deals Funded:
400+ (231 real estate)
Deals Realized:
320

Returns (Historical Performance)

IRR:
9.6% historical IRR

Comments:
IRR excludes short-term notes
IRR on real-estate deals from 6-9.5%
All 4 RE deals were at or below target

PROs and CONs

Pros:
– Wide range of asset types
– Options for nonaccredited investors
– Low minimums (for funds)
– Easy access to historical return info

Cons:
– Real estate equity not primary focus
– Low real estate equity deal flow
– Sub-par historical real estate IRRs
– 10% of real estate deals defaulted
– Relatively high fees
– Many educational pieces sales-heavy

Our Opinion and Comments

Yieldstreet is a solid destination for those seeking a wide range of investment choices and low minimums (for funds/REITs).

But for real-estate investments, Yieldstreet struggles to compete. Other platforms offer more deals, higher IRRs, and (unlike Yieldstreet) often exceed their targets.

On the one hand, the few real estate deals we’ve funded on Yieldstreet met their projected (target) IRRs.

But we also invested in a vessel deconstruction project that went astray because the vessel was stolen. Lawsuits are in play, but so far only some of Yieldstreet’s legal fees have been recovered. Investors (like us) are still waiting.
Learn More

Periodically, we will review and update our top picks for the best crowdfunded real estate sites.

Frequently Asked Questions

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.

Disclosure

Some or all of the products & services described on this website are from partners who may compensate us for purchases made by visitors to this site. This compensation may influence the products & services we write about and the placement of information on the website, but it does not influence our reviews or opinions.

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.

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