With some services we recommend, vetting/due diligence is relatively easy because of the nature of the business. Insurance might be the prime example, but I also include student loan refinancing, mortgages, and even financial advisors in that list. The services take place relatively rapidly and many readers use each of those services in any given month. Due to the long-term nature of real estate investments, this process is dramatically more difficult, so I consider our real estate company list more of an “introduction list” than a “recommended list.” I have invested myself with many of these companies, but usually only with a single deal or two over a few years. Just finding their name on this site doesn't excuse you from having to do your own due diligence, which should include reading this post about some of the risks and downsides of investing in private real estate. In 2019, we began requiring companies listed here to submit an application. Please read them before investing as they contain questions and answers that I think you should ask/know prior to investing.
The page is divided into five different categories:
- Private real estate funds
- Real estate platforms
- Real Estate Investment Trusts
- Turnkey Real Estate Companies
Although many companies don't fit easily into a single category, I've tried to place them where I feel they best fit. In case it isn't crystal clear, I have a business relationship (either flat fee ads or an affiliate relationship) with each of these companies.
If you are a real estate company interested in advertising with The White Coat Investor, please fill out the application below and submit by email to [email protected].
Private Real Estate Funds
One of my favorite ways to invest, a private fund provides a great deal of professional expertise in selecting and managing investments and ready diversification between deals. While equity funds are usually quite illiquid, some of the debt funds do provide significant liquidity after a year. Minimum investments generally range from $50,000 to $1 Million per fund.
One subset of this category is what I call an access fund provider. In exchange for an additional level of fees, this type of platform helps you choose a fund, reduces the cost of entry to the fund (often to something like $25,000), and may even provide other special incentives for investors going through the platform such as a reduced fund fee.
# 1 – DLP Capital Partners
DLP Capital is an impact investment company that is focused on doing well while doing good–meaning working diligently to provide great returns to investors while simultaneously tackling four crises in our country. Their investments are straightforward, easy to understand, and historically profitable. They recently relaunched their fund portfolio to ensure their offering aligns with their primary mission. DLP Capital now offers five funds giving more options to a wider range of investors– two that are brand-new to the market and three existing funds. All funds have the following criteria: 1) all DLP funds are evergreen, 2) they invest in critical workforce housing, 3) they are targeted to provide above-market returns, and 4) they pay preferred returns before DLP takes a management fee.
One new DLP fund is the DLP Building Communities Fund, which provides equity investments in the development and construction of new rental housing communities. It has the highest targeted net return of all DLP funds at 13%–with annual distributions and annual liquidity.
The second new fund is the DLP Preferred Credit Fund, which invests in real estate loans for larger, higher-quality borrowers, and has the highest targeted preferred return (9%) of the current DLP funds.
In addition to the two new funds, DLP Capital still offers the DLP Housing Fund, which is a Private REIT and invests equity in existing multifamily rental communities. It offers a 6% preferred return and targets a 10-12% net return to investors.
The DLP Lending Fund is also a REIT that is highly diversified and offers 90-day liquidity. It is designed to moderate risk, while still providing solid returns. It has an 8% preferred return and a target of 9% net return to investors.
For White Coat Investor referrals, the minimum investment for all of the above funds is only $200,000, compared to their normal investment minimum of $500,000.
Finally, DLP Capital also offers the DLP Positive Note Fund. Secured by a note agreement, this fund offers guaranteed fixed returns of 5-7.5%, with monthly distributions and the lowest cost of entry at just $100,000.
There’s a lot more to these funds than presented here, but this at least gives an overview of what you can expect from your investment with DLP Capital. If you connect with them, they can help you dig into the details further and show you how to get started.
# 2 – 37th Parallel Fund I
37th Parallel has been doing multi-family syndications for years and is now opening its first fund. This $20-40M fund has a $100K minimum. It will have a value-add strategy targeting 100-450 door Class A- to C+ apartment complexes in 12 markets across Texas, North Carolina, South Carolina, and Georgia. They will be calling capital over 30 months and the fund will last up to 10 years. Fee/waterfall structure includes an 8% preferred return and an 80/20 split after that. Track record shows an average gross IRR of 19.06%. I have personally invested with 37th Parallel in the past, will be investing in this fund, and have negotiated a $500 fee discount for you if you go through this link. If you prefer individually choosing which properties you invest in, they will still be doing individual syndications too.
Invest in 37th Parallel Fund I Today!
#3 Origin Investments
Origin Investments helps high-net-worth investors, family offices and registered investment advisors grow and preserve wealth by providing best-in-class real estate solutions. They are a private real estate manager that builds, buys and lends to multifamily real estate projects in fast-growing markets throughout the U.S.
Since their founding in 2007, they have executed more than $2.6 billion in real estate transactions and their Co-CEO’s have invested more than $60 million alongside their investors. Their performance ranks them in the top decile of private real estate North America-focused fund managers by Preqin, an independent provider of data on alternative investments.
Origin is currently accepting new investors for their open Growth Fund IV, QOZ Fund II, and IncomePlus Fund, which seek to provide tax efficiency, enhance portfolio yield, maximize growth and minimize portfolio volatility.
Real Estate Syndicators/Developers
Syndicated real estate is popular among white coat investors because it provides economies of scale a single investor cannot get and allows investment into large properties (such as apartment complexes) a single investor cannot afford. By banding together with up to 98 other investors, you get a lot of the benefits of direct ownership with little hassle.
# 1 – Mortar Capital Management
Mortar Capital Management, a real estate investment firm, based out of New York is happy to introduce you to their new project, District Lofts. The planned investment strategy will involve the purchase, renovation, operation, and sale of a pre-war apartment building in Williamsburg, Brooklyn with a total of 35 residential units. This value add opportunity is an income producing asset providing quarterly distributions at 6% starting year one along with expected appreciation. The primary exit strategy is the sale of the property after a 2-year stabilization period and a 3-year period of rent collections.
Mortar Group represents a premier real estate development and investment management team with over 50 years of collective experience and expertise in construction, real estate development, investments and management. Over the last 20 years, their team has worked on various successfully completed real estate projects in the New York City area. Their projects have generated superior returns on both a rental and sales basis. In 2021, the valuation of Mortar’s current group of projects in development has grown to $239 million with $47 million in investor capital.
# 2 – 37th Parallel
While 37th Parallel are starting their first fund (see above), they are going to continue offering value-add, multi-family investments a la carte. You'll appreciate their long track record and conservative strategy. (They've never had a losing investment.)
Real Estate Platforms
These companies are most commonly thought of as online crowdfunders that connect real estate syndicators/developers with investors. Although you still usually need to be an accredited investor, minimum investments are generally lower than going directly to the syndicators.
# 1 – EquityMultiple
EquityMultiple offers equity and debt investments to accredited investors.
Two great things about EquityMultiple are their transparency and the fact that they invest alongside their investors on every deal. Since they have skin in the game, we expect them to be a little more conservative with their due diligence. Their volume is not as high as some companies, but perhaps that is a reflection of higher quality of the deals that do show up. Minimum investments are typically $5-10K.
Jim has one current investment with EquityMultiple.
Invest today with EquityMultiple! (Management fee waived on your first investment when using this link)
# 2 – CrowdStreetCrowdStreet offers mostly equity, some debt investments, and funds to accredited investors. They recently put out their report on best places to invest in 2022.
Crowdstreet is one of the highest volume platforms and is highly-ranked by those “in the know.” They offer various types of real estate investments across asset classes, risk profiles, geography, and more. Their website has many educational resources for investors, including their Investment Thesis, their deal review process, webinars & livestreams, and much more. Minimums tend to be a little higher than with most platforms ($25K-50K).
I have no current or prior investments with CrowdStreet.
# 3 – AcreTrader
AcreTrader is an investing platform that makes it easy to buy shares of farmland and earn passive income, starting in just minutes online. U.S. farmland has historically outperformed most asset classes, with almost no correlation with the stock market. Further, it has experienced positive returns during economic downturns. Unfortunately, buying and maintaining farmland directly has been extremely difficult, which has prevented most investors from participating. AcreTrader makes it easy to place direct investments in farmland, and handles all aspects of administration and property management. AcreTrader carefully reviews each farm, selecting less than 1% of the total parcels considered, then places each farm offering in a unique legal entity and offers shares to investors through their online platform. See their Current Offerings to view what is available today!
#4 – Realty Mogul
Founded in 2012, RealtyMogul members get access to equity investments – mostly in the form of value-add multifamily deals – and two REITs that require a minimum investment of just $5,000.
The RealtyMogul team is known for their industry-leading due diligence. In fact, just 1% of the opportunities they evaluate make it onto their Platform.
As of September 30, 2021, RealtyMogul members have collectively invested over $700 million into over $4 billion of real estate nationwide.
Private Real Estate Investment Trusts (REITs)
Many investors know about REITs from their publicly traded cousins available in an investment such as the Vanguard REIT Index Fund. REITS have a unique legal structure that requires them to pay out essentially all of their profits each year to investors. Although somewhat comparable to funds, REITs have different tax treatment (benefit from the 199A deduction but don't have depreciation passed through to investors) and generally have more liquidity and lower investment minimums. You may not even have to be an accredited investor to invest in these.
#1 The Peak Group
The Peak Housing REIT is a privately held, evergreen investment vehicle that owns 1,700 single-family homes throughout Texas, Indiana, and Missouri. The Peak Housing REIT’s strategy entails building, buying, and operating SFR properties at scale. Managed by The Peak Group, all SFR units in the REIT have property management, construction, and maintenance covered through a vertically stacked platform. This vertical alignment enables the firm to bring a competitive edge from other buyers as they avoid delays from third-party participants, close faster, and arrive at smart solutions for the seller. The fund grew to 1700 homes by the end of 2021 and with a forecasted growth of 1,500-2,000 homes annually, the REIT will reach 10,000 homes by 2026. Since the inception of the fund in April 2020, investors have enjoyed consistent quarterly dividends and nearly a 22% increase in net-asset-value (NAV) for the period ending Q4 2021. With a minimum investment of only $25k, this is more accessible than many other investment options.
# 2 – RealtyMogul
RealtyMogul has two high-performing REITs in addition to their crowdfunding platform that offers equity investments, mostly in the form of value-add multifamily deals. The two REITs require a minimum investment of just $5,000.
# 3 – FundriseFundrise offers REITs and funds to non-accredited investors.
Fundrise has completely transitioned over to a REIT/fund structure offered to non-accredited investors, although the one investment I've had with them was prior to this transition (and in fact, the asset was sold to one of the REITs!). They now have seven REITs/Funds with various focuses, including income, growth, and various geographic areas. Minimums are the lowest I've seen, just $500.
I have one past investment (preferred equity) through Fundrise, which performed exactly as expected.
Invest with Fundrise today!
Turnkey Real Estate Companies
When you go through a turnkey real estate company, you own the real estate directly and singly. You get all the benefits (depreciation, control, profits) and all of the downsides (risk, lack of diversification, illiquidity). However, the company builds (or fixes up) the property and puts a tenant in it before selling it to you. They then manage the property and often even sell it for you when you're read to be done. While there are fees for this service, it is a great way to reduce the hassle of direct ownership, especially in locations away from your local area.
# 1 – Roofstock
Roofstock is a marketplace for buying and selling single-family rental homes, enabling investors to acquire income-producing real estate in 40 markets across the country. Roofstock is a great solution for owners who want the benefits of direct ownership and want to have more control over their investment – you are buying the home directly and own it outright, with traditional home loan financing options available for most investors. Their team is available to guide you through the entire process from exploring the marketplace all the way through closing, and they also provide a 30-day money-back guarantee on every home.
What do you think? Have you invested in crowdfunded real estate? Which companies have you used? What did you like or dislike about them? Comment below!
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