Note: As of November 7, 2018, RealtyShares is no longer accepting new investors. Check out our RealtyShares Alternatives here.
Real estate crowdfunding is one of the fastest growing trends in the investment community. They provide obvious value to investors who would otherwise be priced out of commercial and private equity deals. RealtyShares is one of these crowdfunding platforms, but they have a unique niche. They work with both institutional investors and “the crowd” of smaller investors to find a wide range of projects. These can be anything from single family homes to commercial office buildings. While the range of products may boost your investment returns, they can get complicated in a hurry. When you choose to invest in RealtyShares, you need to know what you’re getting into.
To invest in RealtyShares, you need to be an accredited investor. That means you need to hit one of the following criteria:
If you’re not yet an accredited investor, you can keep reading to learn more, but you might be better served with these articles:
If you’re interested in investing in RealtyShares, you can simply go to the website, “self-accredit” and start browsing available projects. The projects that RealtyShares with their smaller investors may already be funded through either an existing line of credit, an institutional investor, or a partner equity fund. You must handpick the investments you want to fund (and you have to wait 30 days after signing up to fund them).Your minimum investment is $5000, and you’ll pay a 1% investment fee on equity investments, and up to a 2% interest rate spread on debt.As a special to College Investor readers, if you use the code PARTNER100, you can get a $100 bonus on your account when you make your first investment.Once a project reaches it’s funding goal (100%), your funds will be invested on your behalf. Depending on the project, you may expect quarterly payouts to start immediately, or at some point down the line. Your principal investment will only become available after the loan comes to term, or the investment is liquidated.Of course, that’s all dependent on the investment performing as expected. There is always risk investing in real estate, and as an investor you need to understand that.
Compared to other crowdfunding platforms, RealtyShares gives their investors a lot more control. You can choose the type of project, and the equity position that suits your risk profile. RealtyShares is an illiquid investment, so you should not invest money that you may need in the mid term.It’s most appropriate for investors who need exposure to real estate, but don’t wish to invest in publicly traded REITs or own property themselves.