With the development of real estate crowdfunding platforms, micro property investment has become increasingly popular in recent years. By investing small amounts of money into real estate projects, individual investors can participate in this asset class that was previously only accessible to institutions and high net worth individuals. What are some successful example companies in the micro property investment sector? Let’s take a look at a few typical cases.
Groundfloor – Fintech lending platform for real estate
Groundfloor is one of the first real estate crowdfunding platforms founded in 2013 that focuses on short-term, high-yield real estate debt investments. The company uses technology to efficiently originate, underwrite, service and securitize real estate loans. Groundfloor has funded over $500 million worth of real estate projects to date. By allowing investors to directly participate in these loans, Groundfloor provides attractive risk-adjusted returns typically between 6-14%.
RealtyMogul – Diversified equity real estate investments
Founded in 2013, RealtyMogul is a real estate crowdfunding platform for accredited investors to pool money online and invest in institutional quality real estate such as multifamily properties, retail centers, and office buildings. RealtyMogul vets each deal, handles all the legal paperwork, manages the properties, and distributes income to investors. With low minimums starting from $5,000, RealtyMogul opens up real estate investments previously only available to the wealthy.
RealCrowd – Institutional-grade commercial real estate
RealCrowd connects real estate developers with accredited investors for equity investments in commercial real estate projects. With an average deal size over $20 million, RealCrowd focuses on larger, institutional-grade commercial real estate as opposed to residential fix-and-flips. Investors can browse vetted deals on the platform and invest in multiple projects to build a diversified portfolio with target returns of 18-25%.
Fundrise – Low cost diversified real estate portfolio
Fundrise pioneered the eREIT investment model that allows individual investors to invest in diversified portfolios of commercial real estate assets for as little as $500. Investors can choose between income-focused or growth-focused strategies. Fundrise eREITs have produced an average annualized return of 7.5-12.5% net of fees since inception. The ease of diversification and low investment minimums make Fundrise a popular choice.
Roofstock – Invest in single-family rental properties
Roofstock is an online real estate marketplace for investing in single-family rental properties. Accredited investors can browse thoroughly vetted properties and purchase individual rental homes starting from $5,000. Roofstock facilitates property management and leasing. Target net yields for properties on Roofstock range from 6-12% after all expenses. The ability to invest in cash-flowing rental homes with low minimums is appealing to many.
In summary, platforms like Groundfloor, RealtyMogul, RealCrowd, Fundrise, and Roofstock have enabled micro real estate investing by providing easy access, low minimums, and portfolio diversification. By leveraging technology and the wisdom of crowds, individual investors now have more options than ever to participate in institutional-grade real estate opportunities.