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Best Crowdfunding Sites for Real Estate

Fundrise is the most accessible real estate crowdfunding site

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Real estate investing was once considered the type of investing that only investors with deep pockets could afford to take part in. But thanks to real estate crowdfunding, which uses the power of the internet and social media to connect investors to investment properties, less affluent investors have an opportunity to invest in commercial real estate as well.

To help you choose the best real estate crowdfunding sites, we reviewed account minimums, fee structures, returns, and site interfaces of more than a dozen platforms to find our top picks.

Best Real Estate Crowdfunding Sites of 2022

Best Overall : Fundrise


Why We Chose It

Fundrise made our cut as the best overall real estate crowdfunding platform because it accepts clients regardless of income or net worth. The company also offers low fees and the ability to invest with as little as $500, making it a solid entry point for a lot of investors.

Here's a look at each of Fundrise's account options:

Plan Minimum Investment
Starter $500
Basic  $1,000
Core $5,000
Advanced $10,000
Premium $100,000

Each upgrade allows you to utilize more portfolio and account features. For example, the Basic plan allows you to create and manage your investment goals while the Core plan offers those features but also provides exposure to REIT (real estate investment trusts) funds and the ability to customize your investing strategy.

A lot of real estate crowdfunding platforms require investors to be accredited, but this isn't the case with Fundrise. It's an easy way for retail investors to diversify their portfolios into real estate without going through the arduous process of becoming an accredited investor.

Let's take a look at Fundrise's fee structure. The company charges a 0.15% annual advisory fee, meaning that over a 12-month period, investors pay a $1.50 advisory fee for every $1,000 invested. The platform also charges a 0.85% management fee. That means for every $1,000 you invest annually with Fundrise, they'll take $8.50. These are the only fee listed on the company's website, and they're pretty standard.

Even though Fundrise's customer reviews are mostly positive, a lot of investors note that they cannot withdraw funds.

Pros & Cons
Pros
  • Only $500 required to open an account

  • Low fees

  • Non-accredited investors allowed

Cons
  • Can take years to see a return on investment

  • Difficult to withdraw funds

Runner-Up : Crowdstreet


Crowdstreet

Crowdstreet

Why We Chose It

CrowdStreet is one of the better-known real estate crowdfunding sites and has an established track record offering two types of investment funds, allowing you to diversify your portfolio. This is why it's our pick as runner-up for best real estate crowdfunding platform.

CrowdStreet offers three investment options to choose from: 

Plan Minimum Investment
Diversified Funds $25,000
Individual Deals Varies by deal
Tailored Portfolio $250,000

Although the amount can vary, most of CrowdStreet’s funds require a minimum investment of at least $25,000. And as you can see, the minimum investment for a tailored portfolio is a steep $250,000, putting this tier out of reach for a large number of investors.

Fees typically range from 0.50% to 2.5% for funds but can vary with each offering. You can typically expect about 11.5% to 26.4% return, depending on the investment. Total investor distributions are around $135 million.

Note that the company only allows accredited investors, meaning that your individual net worth, or joint net worth if you're investing with a partner, must exceed $1 million, or you must have an income of at least $200,000 or a joint income above $300,000, with a reasonable expectation of reaching the same income level in the current year.

Pros & Cons
Pros
  • Easily see details about investment opportunities right on the website

  • Choose an individual deal or a portfolio overseen by an investment manager

  • Easy-to-navigate website with customer support available by chat

Cons
  • Only accepts accredited investors

  • Large amount of money required to make even a minimum investment

  • Can take several years to see a return on an investment

  • Can’t withdraw funds early

Best for Beginners : DiversyFund


Why We Chose It

DiversyFund is open to non-accredited investors and you can open an account for as little as $500. That's why it made our list as best real estate crowdfunding platform for beginners.

DiversyFund operates a little differently than most of the real estate crowdfunding sites on our list in that it owns and manages the properties directly instead of acting as a broker that joins investors to developers with specific projects. 

The company offers investors a 7% preferred return, meaning the company doesn’t take its cut until investors receive 100% of their returns on the initial 7%. It can take several years to see your investment pay off, however, since you won’t see the returns until DiversyFund sells the property. 

The company charges no management fees, which is a plus when you are just starting to invest. It’s also well-suited for those who want to invest in real estate but don’t know a lot about it since the company handles your money for you and there are no decisions for you to make about which properties to invest in.

Although DiversyFund is a good vehicle for new investors who are just getting their feet wet, it doesn’t offer retirement accounts if you’re looking for long-term tax benefits.

Pros & Cons
Pros
  • Owns and operates its investment properties

  • Good for first-time investors

  • No management fees

Cons
  • Limited investment options

  • Money not available until property sells

  • No retirement accounts offered

Best for Accredited Investors : Origin Investments


Origin Investments

Origin Investments

Why We Chose It

Origin Investments specializes in Build-to-Core properties, meaning that after the properties are built, they will convert to Class A properties, producing a steady cash flow for investors. This makes it a great choice for accredited investors.

Origin buys real estate directly instead of managing REITs. The company focuses on just 11 cities for purchasing their investment properties: Phoenix; Dallas; Chicago; Charlotte; Raleigh, NC; Denver; Houston; Nashville; Orlando; Austin; and Atlanta.

Origin offers two funds for investors. The first, the QOZ Fund, is a tax-advantaged multi-family ground-up development. The second is the IncomePlus Fund consisting of multi-family properties that deliver passive, stable income to its investors. The company states that they have had no realized losses, although they do have the right to deny redemption requests so you should consider investing in their funds as a long-term plan. 

Though Origin doesn't list returns on the website, it appears to average between 8% and over 50% internal rate of return (IRR), depending on the project. The minimum investment amount varies but is usually somewhere in the neighborhood of $50,000 and only available to accredited investors.

Pros & Cons
Pros
  • No realized losses since inception

  • Long track record with no losses

  • Build-to-Core properties provide a safe and steady flow of income for investors

Cons
  • Minimum investment of $50,000 or more

  • Risk of denial on redemption request

Best for Commercial Real Estate : Equity Multiple


Why We Chose It

Equity Multiple only focuses on commercial real estate with offerings often starting as low as $5,000, making it a great entry point for investors looking to move into commercial properties.

The company provides three investing approaches to choose from:

Plan Minimum Investment
Direct Investing with Targeted Investments $5,000, sometimes $10,000
Fund Investing with Multiple Assets and Built-In Diversification $20,000
Tax-Deferred Investing with Codified Tax Benefits $40,000

Although most of their investment opportunities are for five to 10 years, the company does offer some investments that have a duration period as short as six months. The fee structure is only available by contacting the company and varies depending on the investment which is only open to accredited investors.

Pros & Cons
Pros
  • Minimum investment as low as $5,000 (typically $10,000)

  • Only focuses on commercial real estate

  • Return on investment in as little as six months

Cons
  • Only accepts accredited investors

  • Signup required to access most information

  • Fee structure varies by investment

Final Verdict

During our research, we found that real estate crowdfunding sites are a good idea for individuals who want to diversify their financial portfolio but minimize the amount of risk they take. While they can provide a good alternative to investing in stocks and bonds, you should prepare to have your money tied up for several years before you see a return on your investment.

While all of our selections have features we like, we found that Fundrise provided a good platform for both new investors and those with more experience. We also like that you can start investing for as little as $500 and you don’t have to get accredited to begin.

Compare the Best Real Estate Crowdfunding Sites

Site Minimum Investment Accredited Investors Only? Features
Fundrise Best Overall $500 No Accepts clients regardless of net worth or income
Crowdstreet Runner-Up $25,000 Yes Easily see opportunities to invest right on the website
DiversyFund Best for Beginners $500 No Accepts non-accredited investors and no management fees
Origin Investments Best Accredited Investors $50,000 Yes For real estate investors who want passive income and low-risk investments
Equity Multiple Best for Commercial Real Estate $5,000 to $10,000 Yes  Specifically targets commercial real estate

Frequently Asked Questions

What Is Real Estate Crowdfunding?

Real estate crowdfunding is a method used by businesses to raise a large amount of money for the development of property by allowing a group of individuals to invest small amounts of capital as an investment to help finance real estate projects. Since investors only invest small amounts, businesses can raise the needed amount of money quickly.

Although not without its risks, real estate crowdfunding allows individual investors to pair with real estate developers and other real estate professionals to invest in real estate without the worry of owning and managing properties.

How Much Do I Need to Start Investing?

The amount you need to invest varies from site to site and the type of property. In some cases, you can invest as little as $500. In other instances, a business could require a minimum investment of $25,000 or even $100,000 to buy-in.

Is Real Estate Crowdfunding Safe?

Like any type of investing, real estate crowdfunding comes with risks. Since the sponsor or person responsible for controlling the investment is in charge of how the money is spent, you have no say in how the money is handled once you choose to invest in a project. 

Market fluctuations and construction setbacks can also affect the return on your investment. Although most crowdfunding platforms have measures in place to help prevent loss, you should only invest money that you can afford to lose if the project doesn’t go as planned.

Can I Make Money With Real Estate Crowdfunding?

It is possible to make money with real estate crowdfunding. The amount you can make depends on the projected Internal Rate of Return (IRR), a metric used by investors to estimate how much each invested dollar is expected to grow for the period of time it is invested. 

You can typically expect to make 10% to 20% or more over your initial investment, but each project is different and the amount of return will vary. Since this type of investment takes time to pay off, you should expect your money to stay tied up for at least three to 10 years. 

Methodology

We reviewed a dozen real estate crowdfunding sites before choosing the best ones for our list. We considered how long the company has been in business, the types of investments that they offer, and how much of a return you can expect on your investment. In addition, we looked at the number of fees you can expect to pay and how transparent each company is in reporting its returns and losses.

All of our top choices offer competitive fees, have good reputations in the industry, and are available to both new and seasoned investors.

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