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8 Smart Choices for Crowdfunding

Here’s another way to invest in real estate.

Adding real estate exposure to your portfolio can be a way to get a little more diversity in there. But what if you don’t have a lot of capital to buy property. While some investors choose to use publicly traded real estate investment trusts, or REITs, to add real estate, it’s also possible to get started with the help of real estate crowdfunding. You don’t have to have a lot of money to invest in real estate when you use crowdfunding. Here are eight real estate crowdfunding platforms designed for investors with smaller resources.

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Fundrise

With Fundrise, you only need $500 to get started. You get access to a basket of residential and commercial properties in the U.S., including apartments, home construction and commercial developments. You don’t get a lot of freedom in your portfolio until your account balance reaches $1,000. At that point, you can look at different plans that allow you to consider specific geographic areas and customize your portfolio a little more.

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Here’s another way to invest in real estate.

Adding real estate exposure to your portfolio can be a way to get a little more diversity in there. But what if you don’t have a lot of capital to buy property. While some investors choose to use publicly traded real estate investment trusts, or REITs, to add real estate, it’s also possible to get started with the help of real estate crowdfunding. You don’t have to have a lot of money to invest in real estate when you use crowdfunding. Here are eight real estate crowdfunding platforms designed for investors with smaller resources.

Fundrise

With Fundrise, you only need $500 to get started. You get access to a basket of residential and commercial properties in the U.S., including apartments, home construction and commercial developments. You don’t get a lot of freedom in your portfolio until your account balance reaches $1,000. At that point, you can look at different plans that allow you to consider specific geographic areas and customize your portfolio a little more.

Fund That Flip

Wish you could make money flipping houses but don’t have the capital to make it happen? Fund That Flip can help you out if you have at least $5,000 to invest. Much like peer-to-peer lending, you look through projects and decide which ones you want to help fund. You invest the money, and you receive returns based on repayment. You do need to be an accredited investor to participate, though. So you need to make at least $200,000 for the last two years, or have a net worth of $1 million excluding your primary residence.

RealtyMogul

If you’re an accredited investor, you get access to individual residential and commercial projects. You can choose direct investment, with a smaller amount of money than it would take to use a real estate investing club to accomplish the same thing. However, if you’re a nonaccredited investor, you only have access to RealtyMogul’s REITs. You do get a higher dividend yield with these REITs than you might get with publicly-traded versions, mainly because you have less liquidity. You have to lock in your funds for a set period of time. You need to invest at least $1,000 in one of these REITs.

Senior Living Fund

Looking ahead as baby boomers retire at an increasingly accelerated pace? If you’re an accredited investor, you can invest in senior living community building projects. The Senior Living Fund vets each project and you can get involved. Just be prepared to leave your money in the project for a lifecycle of up to five years or more.

Sharestates

You can start investing with as little as $1,000 with Sharestates, although many projects require you to commit $5,000. Basically, with this real estate crowdfunding platform, you can choose different projects that are funded by loans sourced and underwritten by leaders in the industry. Browse the listings in the funding round and decide where you want your money to go. It’s somewhat similar to peer-to-peer lending – but for real estate.

Rich Uncles

No matter your accreditation status, you can invest using Rich Uncles, primarily through their REIT options. You can start with as little as $500. Their latest effort is a student housing REIT, although most of the offerings are related to commercial projects. However, there are some restrictions if you want to invest in their commercial property REIT, including being a resident of one of the states where there are permits. Part of the issue is the fact that Rich Uncles holds actual properties that house retail and commercial ventures.

DiversyFund

Nonaccredited investors have access to the real estate exposure that DiversyFund offers through its private REITs. If you have $2,500, you can choose from growth and income REITs. Private REITs can potentially offer higher returns, but you sacrifice liquidity. It’s not always easy to sell your shares. However, a crowdfunding platform like DiversyFund allows you access to REITs that you might not be able to buy into with such a small investment. For accredited investors with more money to invest, though, there are opportunities for direct investment in California and Texas properties, as well as properties in other parts of the country.

stREITwise

Again, this is another real estate crowdfunding platform that focuses on REITs. You basically have to invest for at least five years if you want the full redemption value, though. For investors looking for better yield than what they’d see on a five-year CD from a bank, this might not be a bad choice. You only need $1,000 to invest and you can be nonaccredited. Plus, stREITwise sets itself apart by offering its investments for generally lower fees than competitors.

Smart choices for real estate crowdfunding

FundriseFund That FlipRealtyMogulSenior Living FundSharestatesRich UnclesDiversyFundstREITwise1 of 11Corrected on April 30, 2019: A previous version of this article incorrectly reported the minimum investment and location information of DiversyFund.

Miranda Marquit, Contributor

Miranda Marquit has more than a decade of experience covering financial markets, investing, ...  Read more

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