From risk assessment and grading to diverse investment strategies, real estate crowdfunding sites offer a range of options to grow your portfolio. When evaluating crowdfunding platforms, we considered minimum investment amounts, historical performance, fees, the offered asset types, and the platform’s track record. These features, plus an assessment of your risk tolerance and investment goals, will assist you in choosing the platform that aligns best with your preferences.
Whether you’re an experienced investor or just starting, explore our in-depth evaluation of the five best crowdfunding sites for investors to find the best fit for your investment goals:
- Best for risk assessment and grading: Groundfloor
- Best for strategy-focused investing: Fundrise
- Best for commercial real estate crowdfunding: Yieldstreet
- Best for investing in single-family properties: Roofstock One
- Best for 1031 exchange options: RealtyMogul
Real estate investments carry inherent risks, and thorough due diligence is crucial before committing funds. If you’re new to real estate investing or crowdfund investing, it’s advisable to start cautiously and seek advice from financial professionals if needed.
Best Crowdfunding Sites for Investors at a Glance
(requires a $1,000 initial deposit)
12 to 18 months
Phone and email
3 to 72 months
Phone, email, and live chat
Phone and email
Varies by investment
Phone, chat, and email
Choosing the right real estate crowdfunding site is the first step in successful investing. Start by taking our quiz to see which crowdfunding site is your best fit:
Which real estate crowdfunding site is right for you?
Real estate crowdfunding is when multiple investors pool money into real estate purchases and rehabilitation projects. It is a way for borrowers to access money to invest or repair a property and the crowdfunding investors to earn a return on their investment (ROI).
It is an excellent option for investors who don’t want to purchase and manage physical property and instead receive principal and interest payments from borrowers. It’s also an opportunity for real estate investors to borrow money for investing in real estate.
Loan terms and interest rates vary, but investors can expect shorter terms and higher interest rates than typical lending strategies. Some crowdfunded real estate loans reach maturity in as little as three months, while others are long-term investments of five or more years, with other ranges in between. Rates depend on many variables, such as investor risk, loan terms, and prevailing rates.
If you’re new to real estate investing, you may encounter a few unfamiliar terms in this article about the best crowdfunding sites for investors. We’ve included them for your convenience.
- Accredited investors: Individuals or entities that meet specific financial criteria can invest in private securities due to higher income or net worth.
- Skin in the game: The personal financial stake that a borrower or investor has in a project, demonstrating their commitment and alignment of interests.
- Annualized rate of return: The percentage rate representing the compounded annual growth of an investment over a specific period.
- Investor-borrower: An individual who borrows money for their investment project.
- REIT (Real Estate Investment Trust): A company that owns, operates, or finances income-generating real estate assets, allowing investors to buy shares in the trust, providing them with income and potential capital appreciation.
- Minimum investment: The lowest amount required to participate in an investment opportunity.
- Liquidity: The ease with which an investment can be converted into cash without significantly impacting its market price.
- Fully managed investment: An investment overseen and handled by a professional management team, relieving investors of active involvement.
- Diversification: Spreading investments across different assets to reduce overall risk and increase potential returns.
- Holding period: The duration for which an investor holds an investment before selling or redeeming it.
- Dividend reinvestment plan (DRIP): An option for investors to automatically reinvest their dividends into the same investment rather than receiving cash payouts.
- Distributions: Payments made to investors from their investments, typically in the form of dividends or interest.
There are upsides to real estate crowdfunding for investors and investor-borrowers, but there are also some cons. One upside is that investor-borrowers may get funding for a project that traditional lenders won’t fund. Still, the downside is that it may come with higher interest rates, larger monthly payments, and a short repayment period. Or, a crowdfunded project could produce excellent returns, but it could take years for investors to receive their funds.
Let’s examine more pros and cons of crowdfunding real estate:
|Accessible to a broader range of investors
|Limited control over management and decision-making
|Investors can diversify their portfolios
|Market fluctuations, and economic downturns can impact property values and rental income
|Passive income potential
|Some require significant initial investments or are only open to accredited investors
|Lower capital requirements than purchasing properties
|Investments are often illiquid, so investors may have limited ability to sell their shares or withdraw funds
|Crowdfunding sites typically provide comprehensive information about investment opportunities
|Investor-borrowers may default on the loan, putting the investment at risk
|Investors can choose to monthly distributions or reinvest into other projects to grow their net worth
|Real estate projects could experience construction delays, unexpected expenses, changes in market conditions, or fail to meet projected returns
Groundfloor: Best for Risk Grading & Assessment
Our Expert Opinion on Groundfloor
Groundfloor provides detailed information on each investment and ranks them from A to G, with A being the lowest risk and G the higher risk. Investors can sign up for a free account and start investing in a real estate crowdfunding platform project with as little as $10, although you are required to submit a $1,000 initial deposit to begin. It’s an easy-to-use platform where investors can link their funding source through Plaid. Investors can crowdfund a project until it reaches the full funding request amount.
Real estate investor borrowers can also use the platform to apply for a loan for their investment project. Loans are 12 to 18 months with a minimum credit score of 640 and no hard credit pulls. Groundfloor directly funds these loans and will lend up to 90% loan-to-cost (LTC) and 70% loan-to-after-repair value (LRV).
The short term on the loans is a downside for crowdfunding investors. These loans don’t provide enough time for your money to grow unless you invest large sums in potentially high-risk investments. The service could improve by providing a calculator with investment opportunities so investors can calculate their actual return on investment since the quoted rates are based on time.
- Connect your account with Plaid: Plaid is a trusted financial app that you can connect to your bank, credit union, or other account to safely and efficiently add investment funds and start investing immediately.
- Choose the frequency of investment: Fund your account once and choose investments or set up recurring funds transfers to keep money in your account. You can also set up recurring investments by choosing a risk level and how much money you’re willing to allocate to each type of investment. This can be useful because some loans sell out fast.
- A to G risk ratings: Provides detailed loan information, including the risk involved. A-rated loans carry a lower risk (also lower ROI), while G-rated is at a higher risk of borrower default. Some of the criteria for borrowers include their experience level, credit score, property equity, and how much money they’ve put up for their project.
Groundfloor’s real estate crowdfunding reviews show a consumer rating of 3.9 out of 5. One positive reviewer states that he received a 30% return on his initial investments; another said she averages 11% to 12%. Investors like how easy the platform is to use and how transparent the risk of the investments are. Investors also raved about the low entry point investment amount. Investors only need $10 to get started.
Unhappy investors said many of the loans they invested in are in default, with some going into multiple years while they still await their principal. Some other negative reviews state that the quoted interest you can earn isn’t the actual interest you receive. This is because they calculate your return based on the remaining loan term starting from the day you invested, and interest rates are annualized. If you’re looking for a long-term crowdfunded investment, check out Fundrise.
Fundrise: Best for Strategy-focused Investing
Our Expert Opinion on Fundrise
Fundrise is one of the best crowdfunding sites for strategy-focused investors with the company’s four strategy approach of fixed income, core plus, value add, or opportunistic investing. Once you’ve chosen your goal, Fundrise will curate an investment portfolio to help you attain it, or you can browse their assets and search by goal or investment type. The strategy focus helps investors diversify their portfolios.
You do not need to be an accredited investor to invest with Fundrise since it is a type of REIT where you’re purchasing shares in their assets, and you only need $10 to get started. It’s a good option for diversifying your real estate investment. Customer service was very responsive to my queries, and it only took a few minutes to set up an account.
One area where the company could improve is to allow users to preview the platform before linking their bank accounts. It also would be helpful to provide a snapshot or brief overview of the prospectus and user agreement and require e-signatures after having a chance to browse.
- Diverse portfolio: Fundrise’s over $7 billion portfolio consists of single-family rentals, multi-family apartments, and over 2,310,800 square feet of industrial space, providing investors with multiple options to match their chosen strategy.
- Direct-to-consumer interface: Investors can access institutional-quality alternative investments through its online and mobile platforms without paying the hefty fees and markups associated with traditional channels.
- Fund management and servicing: The proprietary software can manage tens of thousands of individual investor accounts, including handling tax reporting, fund administration, and transaction management at a fraction of the cost.
Fundrise has a rating of 4.4 out of 5. Satisfied clients report high returns on their initial investment when they’ve invested long term. Some investors also appreciated that they could invest in quality real estate with little money and grow their portfolio over time.
Negative reviewers said it takes months to get your money out when you cancel your investment. Others reported that if you withdraw early, you pay exorbitant fees. A few investors said they lost money over the long term. One investor stated that he invested over three years ago and has only seen a 2.7% return. If you’re looking for a short-term real estate crowdfunding site, check out Yieldstreet.
Yieldstreet: Best for Commercial Real Estate Crowdfunding
Our Expert Opinion on Yieldstreet
Yieldstreet is the best crowdfunding site geared toward accredited investors, and it offers a wide range of investment options in the commercial real estate sector. With a minimum initial investment of $10,000, investors can access diverse and lucrative deals in various industries. While the investments on Yieldstreet are considered illiquid due to their long holding periods (often exceeding five years), the potential for substantial returns makes it an attractive option for investors with a long-term focus.
As for improvements, Yieldstreet could enhance its fee transparency, ensuring investors clearly understand any additional charges that may apply. Furthermore, expanding opportunities for non-accredited investors could broaden their investor base and cater to a wider audience.
- Prism Fund: Yieldstreet has opened up multi-asset class investment opportunities, which include art, commercial, consumer, legal, real estate, corporate, and more. The minimum investment is $10,000.
- Stringent vetting: Yieldstreet’s team approves less than 10% of the billions of dollars in real estate deals they evaluate, reducing crowdfunding investor risks.
- Growth and income REIT: Investors can put their money into a real estate investment trust, a portfolio of real estate assets with a minimum $10,000 investment. Unlike other real estate projects, this fund is always open and available.
Yieldstreet has a rating of 2.86 out of 5. Satisfied customers reported that the platform and app are very user-friendly, and asset selection is high quality. One investor raved about the opportunity to diversify his investment across multiple asset classes and the access to investments previously only open to accredited investors.
Some negative reviews said it was difficult to get their money back from the investment, and several were dissatisfied with customer service, stating it was challenging to reach someone. Other reviews reported insufficient real estate investment opportunities and disliked the sizeable initial investment requirement. Most of their real estate portfolio offerings are only open to accredited investors. If you want to invest in real estate with a minimum investment open to all investors, check out Groundfloor.
Roofstock One: Best for Investing in Single-family Properties
Our Expert Opinion on Roofstock One
Roofstock One is one of the best crowdfunding sites for investors seeking to invest in single-family properties and gain ownership portions without the hassle of active management. With a minimum initial investment of $5,000, investors can access a curated selection of properties and enjoy the potential for passive income.
The platform’s active portfolio management ensures the properties’ upkeep and timely payment of taxes, insurance, and HOA dues, providing a hands-off investment experience. Investors can also take advantage of the flexibility to take over the property if they own at least nine shares, offering a unique path to direct ownership.
While Roofstock One caters exclusively to accredited investors, its single-family turnkey real estate offering through the Roofstock parent company presents an attractive option for those seeking managed properties. However, greater fee transparency would be beneficial, providing investors clearer insight into potential costs.
- Active portfolio management: Ensures the upkeep and timely payment of taxes, insurance, and any associated HOA dues for the properties in your portfolio so that you can invest passively.
- Customized portfolios: Shares of Tracking and Common Stock in Roofstock One are purchased by investors to create a customized portfolio that best meets their needs and financial objectives.
- Roofstock turnkey real estate: If you’re not accredited yet and still want to purchase managed properties, you can invest in single-family turnkey real estate over at Roofstock. You would then own the asset, and many of their turnkey offerings come with property management services.
Roofstock received a score of 2.9 out of 5. These limited reviews are for Roofstock, not just the Roofstock One crowdfunding option. One reviewer said the platform is easy to use, and they liked the database of investment properties available. Another said the platform was “OK” but considered investing expensive.
Negative reviewers stated that customer service was impossible to reach, and one reviewer said they had a bad experience as a tenant in a Roofstock turnkey rental, stating that there were unaddressed maintenance issues. If you’re looking for a crowdfunding platform with great customer service reviews, check out Yieldstreet.
RealtyMogul: Best for 1031 Exchange Option
Our Expert Opinion on RealtyMogul
RealtyMogul offers a diverse set of real estate investment opportunities, making it an attractive platform for investors seeking a range of investment options. The inclusion of a 1031 exchange option is particularly appealing for those looking to leverage tax advantages in their real estate investments.
The platform’s liquidity feature, allowing quarterly share buyback, enhances accessibility for investors seeking potential exit strategies. Additionally, RealtyMogul’s offering of REIT shares for non-accredited investors expands the investment opportunities to a broader audience.
However, the platform’s requirement for a $5,000 initial investment and potential additional fees of up to 3% should be carefully considered by investors, especially those with limited capital or cost-sensitive investment strategies.
- Join for free: Sign up at no cost; you can browse the dashboard and investment opportunities by property type and investment strategy.
- Individual property investments: Open to accredited investors, the platform offers equity investments in several property types, including office, multi-family, retail, and industrial. Minimum contributions typically vary from $25,000 to $50,000, with typical investment horizons of three to seven years.
- Income and growth REIT options: The income REIT pays consistent cash distributions, and the growth REIT focuses on capital appreciation.
Realty Mogul has a score of 3.2 out of 5. One happy investor said he had been delighted with the crowdfunding investment platform and his consistent returns and plans to invest through his retirement accounts. Another investor stated that he invests in several real estate crowdfunding platforms, and RealtyMogul has the best customer service. Many other reviewers also rave about customer service.
The majority of negative reviews are about the illiquidity of the investment. Reviewers were unhappy that it was taking years to get their money out. However, the company is transparent about its long-term investment and has added its buyback program. Other negative reviews are centered around declines in the investors’ principal when they were under the impression that the crowdfunding investments weren’t high-risk. Consider Groundfloor if you’re looking for a short-term crowdfunding option with money down.
How We Evaluated the Top Real Estate Crowdfunding Sites
We evaluated the best five real estate crowdfunding sites based on various criteria to help investors make informed decisions. We looked at the initial investment requirements, user-friendliness of the platform, and consumer reviews. We also evaluated features and access to support.
Groundfloor emerged as number one, with a score of 4.95 out of 5. It excelled in risk assessment, providing detailed investment information and a user-friendly platform. With a minimum investment of $10, Groundfloor offers accessibility to many investors. The platform’s emphasis on transparency and convenience makes it the top choice for investors seeking a balanced approach to risk and returns.
Criteria used to determine the best real estate crowdfunding sites for investors include:
40% of Overall Score
We thoroughly examined the features offered by each real estate crowdfunding site. Our efforts focused on essential aspects such as asset management, accredited investor vs non-accredited investor status, automated investing options, direct investment opportunities, and investor education.
25% of Overall Score
Opportunities for investment with little money down and the ability to reinvest dividends for growth. The average return on investment and fees charged by the crowdfunding companies.
20% of Overall Score
We took into account valuable feedback from real estate investors who have used these crowdsourced investing platforms. Customer reviews provided insights into the user experience, customer support, and overall satisfaction with each real estate crowdfunding site.
10% of Overall Score
Ease of use was crucial to our evaluation. We considered the crowdfunding real estate platforms’ user interfaces, intuitiveness, and overall user experience to ensure that real estate investors could navigate and utilize the databases effectively.
5% of Overall Score
A responsive and knowledgeable customer support team can make a substantial difference in the user experience. We evaluated the availability and quality of customer support services offered by each real estate crowdfunding provider.
Frequently Asked Questions (FAQs)
Real estate crowdfunding can be a good idea for investors seeking access to investments with lower capital requirements and diversification opportunities. It allows individuals to invest in various properties and potentially earn passive income without active management responsibilities. However, investors should consider the risks of individual projects and platform selection to make well-informed investment decisions.
Real estate crowdfunding sites charge varying fees to investors and property sponsors. These fees can include transaction, management, and success fees, usually as a percentage of the investment amount or returns. Investors should carefully review the fee structures of different platforms before making investment decisions to consider these costs in their overall investment strategy.
The average return on real estate crowdfunding can vary significantly depending on the platform, specific investment opportunities, and the performance of individual projects. Generally, real estate crowdfunding returns can range from around 8% to 12% or more, but some projects may offer higher or lower returns. It also can take some time to access funds. It’s essential for investors to thoroughly research each opportunity and understand the risks involved before committing their funds.