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. 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–
- Real estate platforms,
- Private real estate funds,
- Real Estate Investment Trusts, and
- 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 Cindy (at) whitecoatinvestor.com.
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.
This is a unique platform that I reviewed here. WCI Network partner Passive Income MD is a partner in the firm. Volume is relatively low here due to the extensive vetting they do as a result of their unique fee structure and they’re really looking for long term relationships with both their investors and developers so expect a more personalized experience than most of these companies.
Offers equity and debt investments to accredited investors
My favorite two things about Equity Multiple are their transparency and the fact that they invest alongside their investors on every deal. Since they have skin in the game, I 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.
I have one current investment with EquityMultiple.
Invest today with EquityMultiple! (Management fee waived on your first investment when using this link)
Offers mostly equity, some debt investments, and funds to accredited investors
Crowdstreet is one of the highest volume platforms and is highly-ranked by those “in the know.” They offer a wide variety of types of investments. They charge fees to the sponsor/syndicator rather than the investor. Crowdstreet also allows you to interact directly with the sponsor rather than having to go through them. They provide a free 176-page ebook to teach you about real estate investing. Minimums tend to be a little higher than with most platforms ($10-50K).
I have no current or prior investments with CrowdStreet.
Offers debt investments to accredited investors
PeerStreet is perhaps the top-ranked site out there today, particularly for debt investments. They offer excellent transparency (every past deal is displayed), low default rates (1%), and low minimums ($1,000.) It has never actually lost investor principal on any of its loans. Volume is pretty good too. It charges a pretty typical 1% fee. They also offer a 1% bump in yield to WCIers if you invest through this link.
Yields are usually between 6.5% and 8%.
I have had and currently hold dozens of PeerStreet investments, although purchased indirectly.
Invest with PeerStreet today and get a 1% bump in yield!
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.
This is an access fund platform that generally lowers minimum investments to $25,000.
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.
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.
Offers equity and debt investments to accredited investors and REITs to non-accredited investors
I have been partnering with RealtyMogul for years, having met their CEO back in 2013, and have been investing with them for nearly as long. At one point they had pretty good volume for accredited investor investments, but seem to have shifted their focus toward the non-accredited market. Platform fees are average to slightly higher than average. Minimums can be a little on the high side for the individual deals (but are very low for the REITs).
I have one current investment through RealtyMogul, which has had a few issues but is almost back up to proforma.
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.
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.
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!