Marketplace

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Roofstock

(All 50 States)

Roofstock is all about buying single family homes for investment. They have properties all across the United States available for sale, some with tenants and others that are vacant. If you live in a high cost of living area but are interested in owning homes for cashflow or appreciation and want to invest outside of our market (i.e. in the "heartland"), Roofstock will likely have properties for you.

Roofstock also has an extensive knowledge center and Roofstock Academy to help you get up to speed on investing in residential properties. Think of Roofstock like a platform such as Trulia, Zillow or Redfin, except these are all investment properties.

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Fundrise

(All 50 States)

Fundrise markets itself as the real estate alternative to investing in traditional stocks and bonds. Rather than investing on a deal-by-deal basis, Fundrise has a series of eREITs and eFunds. These Real Estate Investment Trusts can be a great way to get access to real estate exposure if you are more comfortable investing in a fund than taking on specific deal risk.

Fundrise has some products available to non-accredited investors.

Fundrise has a minimum investment requirement of $500.

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EquityMultiple

(All 50 States)

I'm a fan of this platform for two reasons: (1) quality deals; and (2) the founder is an ex-Biglaw real estate lawyer. Given his background, I think EquityMultiple takes a conservative approach to the deals that make it onto the site.

This may lead to slightly lower deal volume compared to other sites but I believe that's due to their high standards and cautious vetting process. This fits with my investment philosophy where rule #1 is to never lose money

Full Disclosure: I currently have two investments on the EquityMultiple platform: an office space on the west coast occupied by a government tenant and a 100-unit apartment complex in Florida.

EquityMultiple offers debt, preferred equity and equity structuring on their platform.

EquityMultiple requires a minimum investment of $10,000.

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Peerstreet

(All 50 States)

PeerStreet is a great platform if you're interested in hard-money lending. Hard money loans are short term loans provided to real estate developers who are typically fixing and flipping property. PeerStreet vets the real estate developers and deals before allowing them to join, making it easy to connect investors and developers on one of the developed best platforms.

I like PeerStreet because its founding team includes ex-Google employees who were responsible for developing Google Analytics and an ex-Biglaw lawyer, making it a perfect combination in my mind.

With the pandemic, PeerStreet's deal flow has slowed down considerably and the individual deals on the platform are facing significant default risk as real estate developers struggle to complete projects and make payments on time. I am still optimistic that PeerStreet will be able to return principal to investors given that the investments are backed by the underlying real property assets.

Full Disclosure: I have been invested on over 35 deals on the PeerStreet platform.

You must be an accredited investor to invest on the PeerStreet platform.

The minimum investment amount for PeerStreet is $1,000.

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CrowdStreet

(All 50 States)

Crowdstreet has overseen more than $1.25 billion on its platform with a self-reported IRR of 23.1%. I like CrowdStreet because it focuses on providing investors with direct access to vetted commercial real estate opportunities.

They separate themselves from the other crowdfunding platforms by offering access to commercial properties that would be difficult for an average investor to access. For example, it's not unusual to see student housing, senior housing, medical offices or commercial office space deals available.

CrowdStreet has good deal flow meaning that there are often opportunities available on the platform at any given time (even during the Covid-19 pandemic).

CrowdStreet offers mainly equity deals on its platform.

You must be an accredited investor to invest with CrowdStreet.

The Best Real Estate Crowdfunding Sites

The JOBS Act continues to have an ENORMOUS impact on expanding the number of investments available to investors, thanks to making it legal to crowdsource funding for equity and debt investments. This has been readily apparent in the field of real estate investing, where successful real estate crowdfunding platforms have been enjoying success online with investors. Because investors can conduct due diligence through the platforms, invest by pressing a button, and track the results of their deals online, real estate crowdfunding companies have enjoyed immense success over the past few years.

For me personally, as someone who spent 10 years living in NYC, real estate crowdfunding made it possible to allocate a portion of my investment portfolio in real estate deals in a way that isn’t possible when you live in an expensive urban environment. I simply didn’t have hundreds of thousands of dollars to invest in local deals, but I desperately wanted exposure to leveraged real estate deals where I could reasonably expect to see double digit returns.

For example, in 2018 I purchased a small piece of a 235,661 square foot Class B suburban office building located on a 12-acre plot. It had a stable government tenant (the Department of Social & Health Services) that occupied most of the space but the building needed some renovation work to spruce up the 1984 interior. Once the renovations were complete, the team planned to achieve 100% occupancy of the property and eventually sell it to investors looking for stable cashflow.

Average Joe investors simply didn’t have access to those types of investment opportunities until the JOBS Act made them available on a widespread basis.

And it’s not just commercial office space that is available. Real estate crowdfunding platforms offer everything from fix-and-flip homes to multi-family apartment buildings to self-storage and car wash facilities. If it involves real estate, you can invest in it.

Best of all, the real estate crowdfunding platforms make it much easier to perform due diligence, since you can review the project sponsor and their past performance online, as well as the particular details of the deal.

The problem is that there have been dozens of companies that have entered and exited the real estate crowdfunding space over the past few years as they fight among each other for dominance in the market (RIP RealtyShares). So how do you find the top real estate crowdfunding sites? It’s pretty difficult actually.

I’ve been following the real estate crowdfunding space since it started in 2012. In addition to performing due diligence on the individual deals, I’ve also had the opportunity to meet with the founding teams of many of the platforms. I have either invested (or would invest) on all of the sites mentioned on this page and regularly review their offerings to identify investments that fit with my investment philosophy, asset allocation, and desired risk profile.

If you scroll up and review my list, you can see my personal thoughts on each crowdfunding site. Where possible, I try to relate my own personal experience with the site as an investor and explain where I think each crowdfunding marketplace sits in relation to the others. As the market grows in complexity, it’s helpful to understand which platforms specialize in which deals.

Typically, I look for the following qualities when reviewing deals available on real estate crowdfunding platforms:

  • Quality of sponsors (by far the BIGGEST variable)
  • Reputation among industry veterans
  • Reputation of platform founders (I get excited when I see a lawyer on the founding team)
  • My own personal experience on the real estate crowdfunding site as an investor

If you have any experience with private equity, you know that there’s an enormous world of private investment opportunities not available to the public. The JOBS Act continues to expand the investments available to the broader public and I’m excited to see where that takes us.