Have you considered investing in real estate, but don't have the large amount of capital that is often required to get started? Or, perhaps you get turned off by the idea of dealing with tenants? Then you may want to consider using a crowdfunding real estate company. These companies are a new type of platform that allows individuals to invest in real estate projects by pooling their money together. Thus, allowing them to access a wider range of investment opportunities. They also enable you to generate rental income.
One of the key benefits of using a crowdfunding real estate company is that it allows you to invest in real estate without needing to have a lot of money upfront. This is because these platforms allow you to invest small amounts of money into different real estate projects. Thus, allowing you to build a diverse portfolio without having to put all of your eggs in one basket. Well, that's not entirely true. We’ve seen plenty of these crowdsourcing real estate companies pop over since 2012. Some of which target accredited investors only and have minimum investments from $5,000 like RealtyMogul, or even as high as $50,0000 like First National Realty Partners.
Another advantage of these platforms is that they offer a variety of different real estate investment opportunities. Such as the ability to invest in commercial or residential properties, as well as in real estate development projects. This means that you can choose the type of investment that best suits your goals and preferences.
In addition, many of these platforms provide investors with access to a wide range of tools and resources. These help them make informed investment decisions. This can include access to detailed information about the properties and projects available for investment, as well as market analysis and expert opinions.
Today we are going to highlight one of our favorite crowdsourcing real estate platforms, Arrived Homes. Perfect for the average everyday investor, looking to specifically gain exposure into residential real estate.
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Arrived Homes is a crowdfunded real estate investing platform that was founded in 2019. It allows everyday investors to invest in shares of rental properties, providing access to residential real estate properties. The interests are treated as real estate investment trusts and are kept in an LLC, offering shareholders protection from potential lawsuits. The platform offers passive income and has a low $100 initial investment, making it accessible to a wider range of investors. It was created by Alejandro Chouza, Kenny Cason, and CEO Ryan Frazier and is backed by billionaires Jeff Bezos and Marc Benioff.
Arrived Homes platform uses advanced data science and real estate investing experience to identify properties with the highest potential for returns. It streamlines the investment process for investors, handling all aspects of property management.
The four-step process for investing with Arrived Homes is as follows:
Arrived Homes is a real estate crowdfunding platform that charges fees in three main ways.
This fee structure is similar to other crowdfunding platforms. The annual asset management fee is on the low end compared to competitors.
Like any investment, there are always risks. As an investor it is important to understand those risks and ensure any investment you make fits your overall objectives. With Arrived Homes you can be sure the company is doing what it can to mitigate those risks specific to the residential real estate space. It uses independent LLCs for each property, which protects shareholders from personal liability. It also uses professional property management companies and has a cash reserve to help cover negative cash flow. While it is still a new company, its practices are similar to other crowdfunding platforms. They appear to be as safe as other companies in the industry.
Ironically, the two biggest drawbacks for Arrived Homes could also be a signal of its strength. Despite having only a short track record, the platform has become so popular for rental income there is a limited supply of properties to invest in.
With a successful Series A funding in May 2022 for $25 Million, including notable investors like Jeff Bezos, and Spencer Rascoff (Former CEO of Zillow). We are hopeful the funding will allow an expansion in the investment options available. Plus, it may provide more capacity for investors currently sitting on the sideline.
