Best Real Estate Crowdfunding Platforms for 2021

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You don’t have to be a high roller, billionaire, or “even” millionaire to start investing in real estate

In fact, with modern real estate crowdfunding platforms, you start investing in real estate (and start seeing the high potential returns) with just a $10 investment.

Investing in real estate is key to building wealth and diversifying your portfolio.

90% of millionaires invest in real estate

Source: CNBC

If you want to build wealth, why not follow in the footsteps of the wealthiest?

And that’s where real estate crowdfunding platforms come into play.

So, if you want to find out the best real estate crowdfunding platforms for 2021, then you’ve come to the right article.

Let’s dive right in.

Best Real Estate Crowdfunding Platforms for 2021

 

Best for New Investors: Groundfloor

Groundfloor is a fantastic real estate crowdfunding platform for non-accredited and accredited investors who want to start slow when it comes to investing in real estate, with as little as $10.

Personally, I’m a very big fan of having the option to invest as little as $10 – especially when it comes to investing in real estate where everything seems to be so overpriced.

If you’ve never invested with a real estate crowdfunding platform before and are a bit unsure of what to expect, Groundfloor may be a good way for you to get your feet wet.

Groundfloor claims that investments typically return over 10% annually on average.

groundfloor average return

Source: Groundfloor

Check out what Groundfloor can offer you below 👇

Groundfloor

Founded

2013

Average Return

10% (between 6 to 12 months)

Default Rate

2% to 4.5%

Average Fee

None

Account Minimum

$10

Accredited Investors Only

No

Real Estate Types

- New construction projects
- Renovation or “flipping” projects

Other Notes

Illiquid and risky

Below are some pros and cons I thought you may want to review before investing with Groundfloor.

Groundfloor Pros Groundfloor Cons

Relatively low fees

High-risk investments

Anyone can invest

May be difficult to understand

Portfolio diversification

Lack of true ownership

Short lock-up periods (for real estate standards)

Low minimum investment of $10

A downside I would mention is that Groundfloor does not offer a mobile device app – however its website is optimized for mobile use.

Groundfloor is one of the few real estate crowdfunding platforms that offer short-term investment opportunities (aka your money isn’t tied up for 5+ years).

The best thing about Groundfloor is that it has an extremely low minimum of $10, so virtually anyone can invest with Groundfloor.

Once the property is completed, it would then have to be sold or rented so you’ll receive your original loan plus profit.

fiona smith the millennial money woman

The Bottom Line:

Groundfloor is arguably the best real estate crowdfunding platform for beginner real estate investors. All you need is $10 to start and your money is typically only locked up for 6 to 12 months, which is relatively short for real estate deals. The downside is that Groundfloor is very risky, and has a reported default rate of 2% and 4.5%, so there is a chance that you may lose your money.

Best Real Estate Crowdfunding for Non Accredited Investors: Fundrise

Fundrise is a great real estate crowdfunding platform for non-accredited and accredited investors.

Fundrise lets you invest in real estate with just $500 (which is a minimal amount of money, considering most private real estate deals start at a minimum of $5,000 to $100,000+).

I like that anyone can invest $500 and still see potential returns between roughly 7% and 12%.

Take a look at the Fundrise performance numbers over the past few years, when compared with pretty standard benchmarks from Vanguard’s Total Stock Market ETF and Vanguard’s Real Estate ETF:

fundrise vs vanguard total stock market ETF vs vanguard real estate ETF

Source: Medium

Check out what Fundrise can offer you below 👇

Fundrise

Founded

2010

Average Return

7% to 12.42% (assuming you reinvest)

Average Fee

1%

Account Minimum

$500

Accredited Investors Only

No

Real Estate Types

- Residential
- Private commercial

Other Notes

Highly illiquid and long-term investment

Below are some pros and cons I thought you may want to review before investing with Fundrise.

Fundrise Pros Fundrise Cons

Low fees

Risky

Anyone can invest

May be difficult to understand

Portfolio diversification

Long lock-up periods (5+ years)

Income-producing real estate

Low minimum investment of $500

Plus, it doesn’t take long to install Fundrise on your phone or computer.

In fact, Fundrise is one of the very few real estate crowdfunding platforms that actually offers an app (which makes it pretty easy to invest).

fiona smith the millennial money woman

The Bottom Line:

Fundrise gives you the chance to diversify your portfolio into real estate for a very small price (as low as $500). With Fundrise, anyone can invest in what they call eREITs (aka diversified real estate investment trusts) that offer you a passive stream of income across a diverse type of real estate properties (residential and commercial). The investment is risky and illiquid by nature, but the returns are high.

Best for Accredited Investors: EquityMultiple

If you’re an accredited investor and are looking for investment opportunities in institutional commercial real estate, then you may want to consider investing through EquityMultiple.

EquityMultiple is a real estate crowdfunding application that offers investors access to:

  • Equity investments
  • Senior debt investments
  • Preferred equity investments
  • Institutional commercial real estate

To break these terms into plain English for you, check out the chart I made below:

Term What it Means

Equity Investments

You invest your money in a company by buying shares. The company is normally traded on the stock exchange. If the company goes bankrupt, you lose your money.

Senior Debt Investments

You invest in a company’s first tier of debt (which is often more secure than any other type of debt). In other words, you’re investing in a debt that’s relatively stable and a low chance of you losing money.

Preferred Equity Investments

You invest in a company that’s typically traded on a stock exchange. Unlike equity investments, where you lose your money if the company goes bankrupt, you have a much higher likelihood of getting your money back if you invest in preferred equity.

Institutional Commercial Real Estate

Type of real estate property that is often used by special institutions including universities, hospitals, government agencies, etc.

As a quick reminder, the only time you should consider investing in commercial real estate is if you are:

  • A long term investor
  • An accredited investor
  • Comfortable investing in real estate
  • Comfortable having your money locked up for a long time

I’d also recommend against investing the majority of your net worth in real estate. 

That would mean you are cash-poor and asset-rich.

In other words, you have a bunch of money tied up in your property investments but you have no – or very little – money in your savings and investment accounts (aka you can’t withdraw money easily).

With EquityMultiple, specifically, your money may be tied up between 1 to 10 years. 

There are a few things to keep in mind before investing with EquityMultiple, take a look below.

EquityMultiple

Founded

2015

Average Return

Total average of 14.5% (for 2020)

- Senior debt = 7% to 12%
- Preferred equity = 7% to 12%
- Common equity = 14% +

Average Fee

- Debt & preferred equity investments = 1%
- Ongoing fee = 0.5% to 1.5%
- Common equity investments = 10% on all profits

Account Minimum

$5,000 to $10,000

Accredited Investors Only

Yes

Real Estate Types

Institutional investment opportunities:

- Hotels
- Offices
- Condos
- Industrial
- Mixed-use buildings 
- Multifamily properties

Other Notes

Highly illiquid, risky, and long-term investment.

Offers tax-advantaged investment opportunities in:

- 1031 exchange properties 
- Qualified opportunity zones

According to EquityMultiple, its deal screening process is very rigorous.

Below are some pros and cons I thought you may want to review before investing with EquityMultiple as an accredited investor.

EquityMultiple Pros EquityMultiple Cons

Diverse investment options

Only accredited investors

Portfolio diversification

High minimum investment

Relatively low minimum investments

High illiquidity (up to 10 years)

Offers tax-advantaged investments

Investors (you) have to pay fees

If you are a very tax-conscious (and accredited) investor who is looking to minimize tax consequences as much as possible, then I would suggest looking more into EquityMultiple, because you do have the ability to invest in tax-advantaged properties, such as:

  • 1031 exchange properties
  • Qualified opportunity zone properties

I would mention that EquityMultiple does not offer a mobile device app – however its website is optimized for mobile use.

fiona smith the millennial money woman

The Bottom Line:

EquityMultiple is a unique crowdfunding platform in that it offers 3 different types of capital structures including senior debt, preferred equity and equity investments. EquityMultiple focuses its investments on commercial real estate investing and institutional real estate investing. The investment minimums are still relatively high, but lower than other accredited investor crowdfunding platforms. If you’re tax-conscious, don’t mind your money to be locked up for potentially 10 years, and want to invest in tax-advantaged properties, then EquityMultiple may be the right option for you.

Best for Private Real Estate Loans: PeerStreet

PeerStreet is a debt-only online platform for accredited investors to invest in high-quality private real estate loans.

PeerStreet is similar to a peer-to-peer lending platform. However, the difference is that the loans through PeerStreet are backed by actual assets (aka real estate). 

The real estate property loans offered through PeerStreet typically only pertain to:

  • Residential properties
  • Single-family properties

PeerStreet would be an optimal platform for you if you are:

  • A real estate investor
  • A long-term investor
  • A high-risk investor

Essentially, you would be investing in private real estate loans and generate a passive income stream

And although the real estate loans are structured to decrease risks, you’re never entirely risk-free. 

Below are a few things to keep in mind before investing with PeerStreet.

PeerStreet

Founded

2013

Average Return

6% to 8%

Average Fee

0.25% to 1%

Account Minimum

$1,000

Accredited Investors Only

Yes

Real Estate Types

Only real estate debt investments:

- Refinancing
- Industrial loans
- Multi-family loans
- Rental investments
- Residential acquisitions
- Commercial real estate loans

Other Notes

Illiquid investments and risky

Below are some pros and cons I thought you may want to review before investing with PeerStreet as an accredited investor.

PeerStreet Pros PeerStreet Cons

Diverse investment options

Debt only (loan investments)

Portfolio diversification

Only accredited investors

Ability to automate investments

High minimum investment

Earn interest on cash that’s not invested through PeerStreet Pocket

Transparency

Although I’m not entirely a fan of investing in debt – I do want to point out that PeerStreet is considered one of the safer platforms.

In fact, 96%+ of PeerStreet loans were paid off to investors, making PeerStreet a relatively safe platform to use.

I would mention that PeerStreet does not offer a mobile device app – however its website is optimized for mobile use.

fiona smith the millennial money woman

The Bottom Line:

PeerStreet approaches crowdfunding differently since it’s a little more like a peer-to-peer lending platform in that you can only invest in debt and not in actual properties. The good news is that the debt loans are backed by real estate properties. As with any investment, you do run the risk of not being paid. However, if there is a risk of you not getting your money back, PeerStreet will step in and work on your behalf to collect the money you are owed.

Best Researched & Vetted Property: RealtyMogul

RealtyMogul offers non-accredited and accredited investors the chance to invest in private (aka non-publicly traded) REITs.

RealtyMogul’s main focus is on lower-risk real estate investments.

Some sectors RealtyMogul invests in, include:

  • Hotels
  • Multifamily housing
  • Apartment buildings

According to RealtyMogul, lower-risk investment opportunities are offered to investors (like you) because of RealtyMogul’s high standards. 

Less than 1% of proposed deals meet RealtyMogul’s strict requirements – and that should give you some peace of mind. 

The downside?

The minimum investment for a non-accredited investor is very high (in my opinion), at $5,000. 

Plus, non-accredited investors can’t participate in RealtyMogul’s crowdfunding activities – non-accredited investors are only limited to investing in private REITs.

Check out what RealtyMogul can offer you below:

RealtyMogul

Founded

2012

Average Return

Limited data, so no concrete numbers. 2020, a difficult year, saw no losses.

Average Fee

1% to 1.5%

(plus many smaller, additional fees could apply)

Account Minimum

$5,000

Accredited Investors Only

No

Real Estate Types

- Hotels
- Self-storage
- 1031 exchanges
- Office buildings
- Individual properties
- Apartment complexes

Other Notes

Highly illiquid, somewhat risky, and long term investment

Below are some pros and cons I thought you may want to review before investing with RealtyMogul.

RealtyMogul Pros RealtyMogul Cons

Relatively low fees

Could be riskier than publicly-traded REITs

Anyone can invest

High minimum investment

Portfolio diversification

Relatively illiquid

Strict vetting process

Complex fee structure

Returns were good during the COVID-19 pandemic

A downside I would mention is that RealtyMogul does not offer a mobile device app – however its website is optimized for mobile use.

fiona smith the millennial money woman

The Bottom Line:

RealtyMogul offers investment opportunities for both accredited and non-accredited investors. If you are a non-accredited investor then you will have access to two private REIT (aka real estate investment trust) options. The downside is that to invest, even as a non-accredited investor, you’ll have to come up with $5,000+.

Best Real Estate Crowdfunding Investment Platform: CrowdStreet

If you’re an accredited investor and want exclusive access to the cool club, then you may want to consider commercial real estate investing (aka CRE). 

Keep in mind that commercial real estate investing is only good for you if you are:

  • Long-term investor
  • A real estate investor
  • An accredited investor

Commercial real estate investing platforms like Crowdstreet, have become very popular recently, since CRE investing is a method to diversify your portfolio and reap some potential profits.

I should note that the commercial real estate industry did take a pretty massive hit after the pandemic, but it is expected for the industry to recover.

Check out the definition of commercial real estate investing below.

As I mentioned earlier, commercial real estate investing is pretty exclusive because the minimum investments are typically high, starting at around $25,000.

If you are looking to invest your money into commercial real estate deals, then I would suggest looking for a platform that is 100% dedicated to this type of investing.

And that’s why I would recommend you to look into CrowdStreet.

CrowdStreet is a real estate crowdfunding app that specializes in commercial real estate (CRE) investing. 

CrowdStreet is like a matchmaker, matching accredited investors with pre-screened CRE investment opportunities.

Here’s how CrowdStreet can help you:

  • Pre-screens CRE investment opportunities
  • Helps you connect directly with CRE project sponsors
  • Connects you with commercial (not residential investment opportunities)

Since CrowdStreet specializes in commercial real estate investments, you won’t be investing in residential properties, just commercial properties.

There are a few things to keep in mind before investing with CrowdStreet, take a look below.

CrowdStreet

Founded

2013

Average Return

17.7% (as of February 2021)

Average Fee

Free to create account

0.5% to 1% for the CrowdStreet Blended Portfolio (an investment)

Fees vary based on the deal, and you can find the fees on the real estate offering detail page

Account Minimum

$25,000 to $100,000

Accredited Investors Only

Yes

Real Estate Types

Commercial real estate investments, including:

- Data centers
- Charter schools
- Build-to-rent projects
- Multifamily developments

Other Notes

Highly illiquid, risky, and long term investment

(project length typically lasts up to 2 years)

Below are some pros and cons I thought you may want to review before investing with CrowdStreet as an accredited investor.

CrowdStreet Pros CrowdStreet Cons

Diverse investment options

Only accredited investors

Portfolio diversification

High minimum investment

Excellent educational resources for investors

Illiquid projects

Proven company history

User-friendly interface

Rigorous project vetting process

I should note that as of early 2021, only 3 investment projects have resulted in a loss, while 44 investment projects have been profitable.

I would mention that CrowdStreet does not offer a mobile device app – however its website is optimized for mobile use.

fiona smith the millennial money woman

The Bottom Line:

CrowdStreet offers commercial real estate investment opportunities strictly to accredited investors (although CrowdStreet is exploring ways to offer investment opportunities to non-accredited investors, too). CrowdStreet’s high minimum investment of $25,000 and minimum project length of around 2 years may deter most investors. However, CrowdStreet does rigorously vet its project deals and only accepts about 5% of deals.

What are the pros and cons of Crowdfunding?


As you can imagine, there are some pros and cons when it comes to investing with the best real estate crowdfunding platforms. 

Let’s take a look. 

Pros Cons