Introduction

The best real estate crowdfunding sites allow everyone, from seasoned investors to newcomers, to get their foot in the real estate market door. The ideal system for you is the one that meets your requirements and exceeds your expectations. CrowdStreet may be a good fit if you are an accredited investor looking for access to offerings with the same calibre as those made available to institutions.

If you're looking for a fund with low minimum investments and no management fees, consider DiversyFund. EquityMultiple is a great option for accredited investors because of the wide range of investments available and the low cost of such investments. Fundraise provides a minimal minimum investment for investors that are not accredited. Peer Street is a great option for accredited investors looking for competitive interest rates. If you're not an accredited investor but still want to put money into real estate, RealtyMogul is a fantastic alternative.

Crowdfunding in the real estate industry is used to amass funds for property purchases. When real estate experts or developers identify promising investment prospects, they may be hesitant to put up all the capital necessary (or they may not be able to). So, they use crowdfunding to solicit small donations from various backers. In this way, investors can put their money into the real estate market without taking on property ownership, financing, or management responsibilities.

Groundfloor

As well as accredited investors, non-accredited investors are welcome to invest in Groundfloor. This organization prefers to make investments in debt instruments to shares of stock. Borrowers use the money from loans to refinish or fix single-family homes—crowdfunded real estate investments using borrowed money. Potential investments are ranked from A+ to G, giving investors a sense of the level of risk involved. Typically, an investment made through Groundfloor will not last more than 18 months.

CrowdStreet

For most investments, the minimum amount to join CrowdStreet is $25,000. These investments are in commercial real estate. CrowdStreet stands out from competing platforms since it is dedicated only to commercial real estate investments. As such, CrowdStreet is one of the few crowdfunded organizations that openly welcomes authorized investors to make direct investments in commercial real estate. If you want to invest in commercial real estate through another crowdfunding platform, you will still have to go through the lender or management business.

You can find deals with a minimum predicted yield of 20% if you decide to invest directly, giving you a greater chance of making money. There is an increased possibility of loss, as the investing corporation cannot use its other investment assets to mitigate its losses. There is currently a 5% acceptance rate for borrower applications on CrowdStreet, which is good news for you. There is typically a 10% approval rate on crowdfunding sites.

The Real Estate Crowdfunding Market

The SEC provides and recommends some recommendations on crowdfunding in general to help guarantee you do not take on too much risk, even though you can invest in these platforms as a non-accredited investor. This isn't meant to discourage you from using real estate crowdfunding platforms; rather, it's meant to assist you in protecting your money and making sure you understand the potential downsides. Although crowdfunding for real estate is distinct from investing in the stock market, it is also susceptible to macroeconomic and real estate trends.

Streitwise

The 1st Streit Office REIT is open to all investors and aims to pay out between 8 and 9 percent in dividends. Non-accredited investors with a minimum of around $5,000 can participate. Your invested funds will be unavailable for withdrawal for one year, and you'll need to keep them there for at least five years to get the full redemption value.

Investing in Streitwise is thus like buying a CD for the same amount of time. However, the current dividend rate is much greater than the average return on a 5-year bank CD, which is now around 1%. You may find this to be a more secure and lucrative investment platform. You were also allowed to cash out during the epidemic, should you need to do so to cover unexpected costs or make a timely investment. Streitwise typically has lower fees than other crowdsourcing platforms. Dividends are subject to a 2% annual asset management fee. The company's founders have put $5 million of their own money into the real estate investment trust. This investment strategy can help prevent scams, and you may like it because the leadership benefits when you do.

HoneyBricks

HoneyBricks takes a slightly different approach to real estate investing than the other companies we've discussed. HoneyBricks allows users to buy tokens representing fractional ownership in prime commercial real estate. Investing in tokenized real estate with HoneyBricks has many advantages, including reduced transaction fees, tax savings from direct ownership, and higher liquidity. HoneyBricks is developing a secondary market where token holders can trade their tokens after certain periods have passed.

However, HoneyBricks' groundbreaking technology isn't the only thing that sets it apart; its approach to real estate is also exceptional. Together, the members of their investment team have amassed over $5 billion in investments spread across thousands of properties in the United States. Only around one percent of the evaluated homes end up on the market.

Conclusion

Investment in real estate through crowdfunding is now open to people of all financial means. It's a viable strategy for generating passive income without being exposed to the ups and downs of the stock market. Compared to publicly traded REITs, the investment horizon for crowdfunding real estate ventures must be far longer. However, real estate investments that would typically cost a fortune are readily available to investors.