4 Best Real Estate Crowdfunding Sites For Non-Accredited Investors

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For years, one of the best investment opportunities has been in the world of commercial real estate. However, it has been almost impossible for the average investor to participate in commercial real estate investing. That has changed recently with the rise of crowdfunding platforms.

These real estate crowdfunding platforms allow for peer-to-peer investing with a low minimum investment requirement. While some of these platforms only allow accredited real estate investing, there are others that welcome non-accredited investors.

What is a non-accredited investor?

A non-accredited investor is someone who does not meet the income or the net worth requirement set by the Securities and Exchange Commission (SEC). [1] Currently, in order to be an accredited investor, you would have to have a net worth of more than $1 million, excluding a primary residence, or an income of more than $200,000 (or $300,000 for a married person).

Top 4 Real Estate Crowdfunding Platforms for Non-Accredited Investors 

If you are interested in investing in real estate, then you should become familiar with the top real estate crowd platforms for non-accredited investors. Here’s a look at the top five platforms and what they offer.

Fundrise

Fundrise is unique in that it allows non-accredited investors for all of its available deals. However, the platform operates a little differently from the rest. With Fundrise, you can participate in something called Electronic Real Estate Investment Trusts or eREITs. With eREITs, you generate a quarterly income through the investment of commercial real estate projects.

Fundrise also offers Advanced and Premium tier levels. These higher levels give you access to a greater number of real estate projects as well as offer more features and benefits.

Overall, Fundrise is a great place to start if you are looking to generate a regular income from your real estate investing portfolio.

Minimum investment requirements

Fundrise has a low minimum investment requirement of just $500. This makes Fundrise extremely attractive to those with smaller portfolios or for investors who are looking to get started with crowdfunded real estate investing.

Fees

The annual fee on the platform is 1%. [2]

Average yield

Fundrise’s average returns vary from 8.67% to 12.42%. 

Pros of Fundrise

  • Low minimum investment – You only need $500 to get started on the Fundrise platform. 
  • Open to all investors – The entire platform is open to non-accredited investors. 
  • IRA accounts available – You can open an IRA account on the Fundrise platform. 

Cons of Fundrise 

  • Highly illiquid investments – The investments on Fundrise are not as liquid as other platforms. 
  • Fees can be difficult to understand – The fee structure can be a little confusing compared to other crowdfunding platforms. 

best-cities-for-commercial-real-estate

RealtyMogul

RealtyMogul is one of the most popular platforms for both accredited and non-accredited investors. The platform offers a number of commercial real estate projects from office buildings to apartments and retail space.

Accredited investors are able to participate in private placements while non-accredited investors are able to invest in the platforms Real Estate Investment Trusts (REITs). The platform offers both regular income distributions as well as capital appreciation.

Getting started with RealtyMogul only requires an initial investment of $1,000. Overall, RealtyMogul offers something for just about every type of accredited and non-accredited investors.

 

Minimum investment requirements

RealtyMogul has a minimum investment requirement of $1,000. 

Fees

The platform charges an annual fee of between 1% to 1.15% depending on the type of investment. [5]

Average yield

RealtyMogul has had an average annulled yield between 7.7% and 8% since its inception. [4]

Pros of RealtyMogul

  • REIT products open to non-accredited investors – You don’t need to be an accredited investor to participate in all of the platform’s REIT programs. 
  • High targeted rates of return – The platform targets a high rate of return for its REIT products.

Cons of RealtyMogul  

  • Short track record – RealtyMogul is relatively new to the real estate crowdfunding world. 
  • Complex fees that vary by investment – The fee structure can be complex compared to other platforms. 

 

Modiv

Formerly known as Rich Uncles, Modiv is one of the most affordable ways to participate in the world of real estate crowdfunding. The platform allows you to invest in commercial real estate through its Real Estate Investment Trusts (REITs). In 2020, it combined its two REIT programs into one $400 million REIT called RW Holdings.

While this REIT is not sold on public exchanges, it is registered with the Securities and Exchange Commission to give prospective investors better peace of mind.

While Modiv has a small investment requirement, investors are required to have a net worth of more than $250,000 or a gross annual income of over $70,000 with a net worth over $70,000.

Minimum investment requirements

Modiv has a minimum investing requirement of $1,000

Fees

There is a 3% fee at time of share purchase. Other fees may apply. 

Average yield

Modiv has advertised returns of 7%. 

Pros of Modiv

  • Low minimum investment requirement – Modiv only requires a $500 minimum investment. 
  • Provides monthly income – The platform is an excellent option for those looking for a monthly income. 

Cons of Modiv

  • High purchase fee – The 3% purchase fee is among the highest in the industry. 
  • Investment locked in for three years – Investments are locked in for three years. 

real estate crowdfunding

Groundfloor 

Groundfloor is a unique crowdfunding real estate investment platform that allows investors to gain short term returns by providing residential property loans for independent home builders. The builders use the funds to build a property and then pay back the loan by selling the property.

This platform is an ideal choice for investors who do not want their money locked up in a REIT for several years. Also, the platform allows you to provide funding for these short term loans for as little as $10.

Finally, Groundfloor has high deal flow which allows you to profit from a short term loan and put your money back to work. Groundfloor should be considered a riskier platform compared to other alternatives.

Minimum investment requirements

The minimum investment requirement is just $10. 

Fees

There are no investor fees on the platform. The borrower pays the fees. 

Average yield

On average, Groundfloor investments return about 10% per year. 

Pros of Groundfloor

  • Low minimum investment required – You can get started with as little as $10. 
  • High deal flow – Groundfloor originates about 60 to 70 loans per month. 

Cons of Groundfloor

  • High loan default rate – Because these are essentially “hard money” construction loans, the default rate can be high. 
  • Lack of property diversification – The platform only offers residential real estate projects. 

 

Overview of Top Real Estate Crowdfunding Sites for Non-Accredited Investors 

Here’s a look at the real estate crowdfunding statistics for the top five platforms for non-accredited investors.

Platform Minimal amount required Fee Average Yield Pros Cons
Fundrise $500 1% 8.67% to 12.42% Low minimum investment required. Highly illiquid investments.
Reality

Mogul

$1,000 1% to 1.15% 7.75% to 8% All REITs open to non-accredited investors Short track record.
Modiv $500 3% of purchase price 7% Low minimum investment required. High purchase fee.
Groundfloor $10 None 10% Low minimum investment required. High default rate. 

 

Finding real estate investing opportunities for your portfolio 

There are a number of different types of real estate crowdfunding platforms to choose from. Be sure to carefully consider the pros and cons of each. With the right research, you will be able to find the ideal real estate crowdfunding opportunity for your investment portfolio. 

Author
C. James

C. James is the managing editor at Wealth Gang. He has a degree in finance and a passion for creating passive income streams and wealth management.

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