It has become fairly obvious to me that there are a lot more people that would like to be able to participate in real estate crowdfunding if they could. The #1 inquiry I received on the heels of my episode of the bigger pockets podcast has been– What are the options available for non-accredited investors to participate in this asset class?
As previously mentioned, Groundfloor.com represented the only site that I know of and have used that from its inception has been dedicated to non-accredited investors. Because of regulatory hurdles they have to go through a time consuming state by state approval process to allow new investors to participate. At the time of this writing they only operate in 10 states despite being around since 2013.
After some more research, there are some additional options although the overall landscape remains limited. I ran across a very informative blog posts on this topic over at Lendacademy.com. This has been one of my primary learning resources as they cover the full spectrum of online lending from consumer to business to real estate. The founder, Peter Renton, has an excellent podcast where he routinely interviews thought leaders and CEOs of many of the platforms I have invested on.
The blog posts was called Peer-to-peer and Marketplace lending opportunities for nonaccredited Investors. In it he spotlights the platforms Fundrise.com and Realtymogul.com who now offer nonpublicly treated REITS for non accredited investors.. REITS or real estate investment trusts are funds you can invest in that go out and buy a portfolio of properties. If this sounds familiar that is because there are several publicly treated REITS listed on the major stockings changes. Fundamentally, the crowdfunding sites are offering the same thing with the notable exceptions that the overall size of the funds will be much smaller and not subject to the potentially large price swings that can occur with the stock market.
In reviewing one of Realtymogul’s funds, the investment minimum is $1000 and to this point they have distributed returns to shareholders averaging 8% annually. Thus far it is acquired 5 different properties.
So while these do represent alternative options, if you one a more traditional crowdfunding experience where you are choosing the specific property, developer, and geography; it looks like groundfloor.com remains you’re only option – its significant geographic restrictions notwithstanding.
I would encourage any fellow potential investors to constantly checked back as new platforms are being added to the landscape every month and seems. I predict that eventually there will be ample opportunities for the non accredited investor as the profile of real estate crowdfunding continues to grow.
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