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EquityMultiple Review 2022 - Pros, Cons, And Features

EquityMultiple Review 2022 - Pros, Cons, And Features

What Is EquityMultiple?

EquityMultiple is a real estate investment platform for accredited investors based in New York. It was founded in 2015 by Charles Clinton and Marious Sjulsen, and it provides investors access to professionally managed funds and self-directed investing tools. It covers most property types and risk tolerances, so there's something for you no matter your investing profile.

Since its inception, EquityMultiple has invested over $392 million through its network of investors and has a total market value of $4.3 billion. EquityMultiple is one of the few real estate investing platforms that offer access to equities, preferred equities, and debt investments, all in one place.

In this EquityMultiple review, I will go over all the best features, like the investments available, the fees, and the returns you can expect, so you can decide if this is the right platform for you. Keep in mind this is a summary – if you want a more in-depth analysis, check out our full EquityMultiple review.

Pros & Cons of EquityMultiple

Pros

  • Exposure to a low-volatility asset class
  • High net rate of return (18.7% since inception)
  • Invest in expertly-made diversified funds
  • Strong focus on Multi-Family properties
  • All information is secured in AWS data centers
  • Self-directed investing for experienced investors

Cons

  • Minimum investment of $5,000
  • Accredited investors only
  • Low liquidity, inherent to all private REITs

Features & Benefits Of EquityMultiple

1) Types Of Investments

EquityMultiple provides access to three main types of investment. All three have different approaches and are backed by experts with decades of experience in the business.

Investors can acquire EquityMultiple Notes for as little as $5,000. Notes are debt securities, similar to bonds, with very short maturity dates ranging from 3 to 9 months. Notes pay distributions monthly, and at maturity, you will receive your principal on top of all the interests you earned along the way (5.5-7% APY).

If you’re an experienced investor, you may want to look into more profitable options. EquityMultiple Direct Investing offers accredited investors the option to choose their investments and has an expected return ranging from 7-24% APY, depending on the mix of Debt, Preferred Equity, and Common Equity in your portfolio (this is comparable to the returns you’d expect from a platform like Fundrise). The minimum investment is $10,000.

For investors who don’t have the time or inclination to research their investments, there are EquityMultiple Funds. These are expertly-made diversified bundles of Debt, Equity, and Opportunity Funds. The minimum investment for these is $20,000, and investors can choose from any of the funds available. Returns for these will depend on the focus (i.e., income, growth, or a mix).

If you are interested in any of these but find the $5,000 minimum too restrictive, you can try out a platform like Groundfloor. Groundfloor is available for accredited and non-accredited investors and has a minimum investment of just $10.

2) Expected Returns

Since its launch in 2015, EquityMultiple has had substantial returns thanks to a very thorough vetting process. They have distributed over $192.7 million to investors and have over $4.3 billion in total project value. The expected returns range from 5.5% to 24% and depend on each investment. Here are the average annual returns you can expect from each:

  • Notes: 5.5-7.0%
  • Debt: 7-12%
  • Preferred Equity: 10-18% (total preferred return)
  • Common Equity: 10-24% (internal rate of return)
  • Funds: Varies depending on the fund strategy (core, core-plus, value-add, etc.)

Distribution schedules can be either monthly or quarterly, and you can expect to receive your first payment within 45-60 of making your first investment.

investments

3) Supported Accounts

EquityMultiple accepts funding through IRA accounts and self-directed IRA custodians. After you create your account, you can check the complete list of all the available IRA custodians supported. LLC, LP, Trusts, and joint accounts are also supported, but you will need to provide documentation – you can follow the process step-by-step by visiting your dashboard and clicking My Accounts.

Keep in mind that for joint accounts and trusts, all members or beneficiaries must be accredited investors, or the entity must have over $5 million in assets.

First National Realy Partners is also a solid option if you are an accredited investor or an entity looking to invest big in nationally-branded, high-performing commercial properties.

4) EquityMultiple Security

EquityMultiple keeps all personal information encrypted and stored in secured databases in compliance with industry standards. The databases are kept in Amazon Web Service (AWS) data centers and located strategically to avoid environmental risks like flooding or seismic activity. Only AWS-approved employees can access information; they follow stringent guidelines and protocols to limit access to any other files.

EquityMultiple Fees

The minimum investment is $5,000, but keep in mind specific investment opportunities may have higher minimums. All investments offered by EquityMultiple are in multiples of $5,000.

Depending on your investment type, there’s a small fee associated. Here’s the breakdown:

  • Common Equities (Monitoring & Reporting Fees): 0.5-1.5% of your total investment
  • Debt and Preferred Equities (Servicing Fees): 1% of your total investment
  • Funds (Origination Fee): Depends on each offering
  • All Investments (Administrative Expenses Fee): $30-$70 per year

The Administrative Expenses Fee applies to all investment types, and it’s used to cover tax documentation and annual filings.

Sign-Up Process

The sign-up process for EquityMultiple is very quick, and it won’t take you more than 5 minutes. EquityMultiple is not limited to US citizens, but all investors must be accredited investors and have either an SSN or an Employee Identification Number.

After creating your account, you can immediately start browsing all the investment options. Here are the steps to sign-up:

  • Visit EquityMultiple’s site
  • Open the menu on the top right and click Sign Up
  • Enter your email and click next
  • Answer some qualification questions
  • Fund your account

Create your account using this link, and you’ll qualify for a welcome bonus. Keep in mind the welcome bonus may vary depending on your initial deposit.

Equity

Final Thoughts

EquityMultiple is an excellent platform for accredited investors. It has investing options for investors with low-, medium-, and high-risk tolerance, and offers competitive rates on all of its products. One downside is its somewhat high minimum investment of $5,000, but if you can afford it, it’ll be one of the best investments you’ll make. If you have any questions or need help you can contact the support reps at EquityMultiple; they’re actually very helpful and are more than happy to help.

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