The post Best Real Estate Investment Companies by Benzinga Contributors appeared first on Benzinga. Visit Benzinga to get more great content like this.
Did you know that you can invest in real estate without physically having anything to do with the property? Such is the power of real estate investing companies. These companies equip you to hold a stake in real estate without worrying about issues such as maintenance or handling tenants. By taking the administration and landlord issues off your shoulders, real estate investment companies set you up to make passive income without worrying about the finer details of property management.
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Working with Real Estate Investment Companies
There is a wide slate of real estate companies from which to choose. Not every company offers the same type of investments however. Investors have the option to use a private real estate investment trust (REIT), a crowdfunding platform or a real estate market place. Here is how you can start investing with the best real estate investment companies.
Best Crowdfunding Platforms for Real Estate Investing
A growing trend in real estate is crowdfunding. The hands-off benefits of crowdfunding is similar to that of REITs, but offer a little bit more control over the investment. Both crowdfunding and REITs allow investors to direct money toward properties and see returns without needing to actively manage the property. The main difference is with crowdfunding, you can funnel your money directly into tangible real estate assets. With REITs you are investing money with the company who in turn goes and invests money in real estate. A few crowdfunding platforms include:
Best for Low Minimum Investments: Arrived Homes
Arrived Homes is a real estate investment platform that focuses on building wealth through investing in rental properties. While most real estate platforms and REITs focus on commercial properties, Arrived Homes focuses on single-family homes as its source of rental income.
This focus on smaller properties allows Arrived Homes to sell ownership shares on individual real estate properties to non-accredited investors with buy-ins as low as $100. Learn more about Arrived Homes with Benzinga’s review.
Best For
- Small- to medium-sized investors
- Investors interested in rental income
- Investors looking to diversify
- Buy-ins as low as $100
- Open to non-accredited investors
- Offers ownership shares in real property (and all the tax benefits)
- Multiple ways to earn dividends (rental income and property appreciation)
- Great way to diversify portfolio
- Open to self-directed individual retirement accounts (IRAs)
- Long hold periods
- No secondary market to liquidate shares
Arrived Homes has brought real estate investing to the masses with its platform that allows non-accredited investors to purchase shares of rental properties with a minimum investment of only $100. The company takes care of all of the property management headaches while passive investors collect cash flow from the rental income and wait for the property to increase in value over time.
Pros
- Buy-ins are as low as $100
- Open to non-accredited investors
- Offers ownership shares in real property
- Multiple ways to earn dividends (rental income and property appreciation)
- Open to self-directed individual retirement accounts (IRAs)
Cons
- Long hold periods
- No secondary market available to liquidate shares
Best for Institutional-Quality Commercial Real Estate Investments: CrowdStreet
Crowdstreet is an online real estate investment platform that lets investors choose from a wide range of real estate investment offerings to crowdfund. Crowdstreet investors are free to buy into managed funds, individual buildings or even build a bespoke investment portfolio that includes both kinds of deals.
CrowdStreet’s platform has a diverse range of property types, ranging from multifamily to office, industrial, self-storage and others.
Best For
- Accredited investors
- Long-term investors
- Investors looking to diversify from stocks
- User-friendly interface
- Diverse investment offerings
- Great investor resources
- Proven performance history
- Many offerings eligible for inclusion in self-directed IRA
- Accredited investors only
- Most offerings require a $25,000 minimum investment
If you’re looking for access to institutional-quality commercial real estate investments, then CrowdStreet is definitely the platform to turn to. The types of investments on CrowdStreet’s crowdfunding platform have traditionally been unavailable to the average investor. The company regularly adds new investment offerings that range from ground-up developments to stabilized cash-flowing properties.
Pros
- Easy to use interface
- Diverse investment offerings
- High quality investor resources
- Proven performance history
- A number of offerings eligible for inclusion in self-directed IRA
Cons
- Accredited investors only
- Most offerings require a $25,000 minimum investment
Best for Accredited Investors: Gatsby Investment
Gatsby is a real estate investing platform that relies on syndication and crowdfunding to provide investor capital for a range of small- to medium-sized real estate deals. Real estate investing can be hugely profitable. That’s why it’s such a key component of any diversified investment portfolio. Unfortunately, the price of real estate keeps most investors from joining the club. The Gatsby platform wants to change that.
Best For
- Real estate investors looking to make small- or medium-sized investments
- Real estate investors looking for shorter-to-medium-length hold periods
- Newer accredited investors who want access to pre-vetted properties
- Carefully selected deals
- Available offerings with medium-to-low buy-ins
- Variety of offerings across several real estate sectors
- Shorter hold periods on some offerings
- Only open to accredited investors
- Properties centered in one geographic market
Gatsby Investment was founded in 2016 by Dan Gatsby to provide accredited investors with a place where they can find a range of residential and commercial properties providing regular returns.
The firm gives investors access to house flips, renovations, new developments, short-term rentals and long-term rental properties. Plus, these investment opportunities all come from the L.A. real estate market—one of the most vibrant and valuable in the world.
A real estate syndication structure allows investors to pool funds and invest in large properties they could not have purchased on their own. Plus, the company can handle renovations, maintain these buildings, provide a good experience for tenants and generate profits.
With a minimum of $10,000, you can get started today and track the properties you’ve invested in at any time.
Pros
- Deals are carefully selected
- Variety of offerings across several real estate sectors
- Offerings available with medium-to-low buy-ins
- Shorter hold periods on some offerings
Cons
- Accredited investors only
- Properties are centered in one geographic market
Best for Experienced Investors: CityVest
CityVest is a web-based real estate investment platform that was established to give small-to-medium-sized investors access to real estate investment opportunities that typically require 6-figure minimum investments. CityVest does this by pooling multiple investor contributions into 1 bundle large enough to satisfy the minimum investment requirements of the best institutional private equity real estate investment funds.
Best For
- Individual investors seeking access to institutional investments
- Experienced investors looking to diversify their portfolio
- Investors seeking investments with strong due diligence and screening
- Access to high-performance institutional funds
- High returns
- Intense vetting of investment opportunities
- Third-party due diligence on all funds
- No registration needed to review investment opportunities
- Quarterly distributions
- Only available to accredited investors
- Not a lot of investor control of fund options
CityVest is a real estate investment platform that provides accredited investors unique access to institutional real estate investment opportunities that typically require minimum investments of $1 million, or more.
The company does this by pooling multiple investor contributions into one bundle large enough to satisfy the minimum investment requirements of the top institutional real estate funds that are otherwise unavailable to individual investors.
Pros
- High-performance institutional funds available
- Vigorous vetting of investments
- Third-party due diligence on all funds
- No registration is needed to review investment opportunities
- Quarterly distributions
Cons
- Accredited investors only
- Lack of investor control of fund options
Best for Diverse Range of Alternative Investments: Yieldstreet
Yieldstreet is an online investment platform that specializes in alternative investment offerings designed to generate passive income and wealth for investors. The platform offers a 1-stop shop for a range of alternative investments ranging from real estate to structured notes and even art collections.
Best For
- Accredited investors looking to diversify
- Alternative investments to stocks and bonds
- Investors looking for passive income
- Easy-to-use platform
- Carefully selected offerings
- Excellent mobile app
- Full spectrum of alternative offerings
- Options for non-accredited investors
- Majority of investments only open to accredited investors
Ready to access alternative investments, especially those that used to only be available for hedge funds and large institutions? Yieldstreet’s offerings give you access to innovative income-generating products with low stock market correlation backed by collateral.
Specifically, Yieldstreet’s offerings currently focus on a number of alternative asset classes, mainly for accredited investors:
- Commercial and residential real estate
- Litigation finance
- Marine finance
- Commercial and consumer finance
- Art finance
You can make 1 allocation spread across multiple classes and sectors, diversify your portfolio, reinvest your dividends and gain immediate portfolio acceleration.
Pros
- User-friendly platform
- Carefully selected investment offerings
- Excellent mobile app
- Full spectrum of alternative investment offerings
- Open to non-accredited investors
Cons
- Majority of investments only open to accredited investors
Best for Saving for Retirement: Mortar Group
Mortar Group has been New York’s multifamily real estate investment leader for nearly two decades. Committed to creating value, Mortar Group looks to fulfill every role of the real-estate process as an architect, developer and asset manager. Its experience in creating distinctive, timely livable spaces and within budget even in challenging markets leads to prosperous buildings for a long time.
Mortar Group’s streamlined process maximizes efficiency, increases value and minimizes risk across complex deal structures. Currently, Mortar is looking to set up a new development project in a vibrant, established neighborhood in Williamsburg, Brooklyn.
Best For
- Investors looking for alternative investments and passive income
- Professionals in the medical field
- Investors experienced with crowdfunding
- Investors saving for retirement
- Retired individuals seeking passive income or tax-deferred strategies
- User-friendly investment portal with 24/7 access
- 24-hour responsive investment relations manager through phone or email
- Simplified investment approach
- 30-day no-risk period for investors
- Personalized asset managers focused on the user experience
- Access to real-time investor financial information
- No upfront fees
- Established expertise
- Quarterly investor reports
- No mobile app
- For accredited investors only
If you want to move away from REITs or want to get started with a full-service crowdfunding firm, you can go with Mortar Group. The group has been a multifamily investment leader in New York for around 2 decades, offering value to all investors. Plus, the firm acts as both a developer and an asset manager.
Buying into Mortar Group is a streamlined process that can create passive income with no upfront fees and personalized service from the firm’s asset managers. Best for those saving for retirement, this crowdfunding platform is perfect for professionals who need a place to park their savings.
While only accredited investors may engage, this is a good place to start when you’ve just entered the world of accredited investing.
Pros
- User-friendly investment portal
- 24-hour responsive investment relations manager through phone or email
- Simple investment approaches
- 30-day no-risk period for investors
- Personalized asset managers
- No upfront fees
- Quarterly investor reports
Cons
- Accredited investors only
- No mobile app
Best Platforms for Non-Traded REITs
REITs are a simple and accessible way to invest in real estate without becoming a landlord or investing thousands of dollars at once. In most cases, buying REITs is just as easy as buying equities like stocks and bonds.
Best for Beginner Accredited Investors: RealtyMogul
This unique online platform enables investors to handle the entire commercial real estate investing process right from their RealtyMogul dashboard. With rigorously vetted property listings, expertly managed REITs, and a commitment to providing top-notch service and support to its members, RealtyMogul makes commercial real estate accessible to everyday investors.
Best For
- Newer accredited investors who want access to pre-vetted properties
- Non-accredited investors seeking consistent cash flow from well-managed REITs
- Experienced real estate investors who want access to deal-specific information that allows them to perform their own due diligence more easily.
- Do everything from finding the investment property through to signing the legal documents and monitoring your portfolio, all in one platform.
- All properties are pre-vetted through RealtyMogul’s transparent and rigorous due diligence process.
- Investment minimums as low as $5,000
- Keep track of investments with regular updates posted directly to your dashboard
- Automated investing
- Individual property marketplace is only open to accredited investors
- Does not offer portfolio management
RealtyMogul’s unique online platform enables investors to handle the entire commercial real estate investing process right from their RealtyMogul dashboard. With rigorously vetted property listings, expertly managed REITs, and a commitment to providing top-notch service and support to its members, RealtyMogul makes commercial real estate accessible to everyday investors.
RealtyMogul is an online property investment company that streamlines the commercial real estate investing process and provides investors with a wide range of opportunities and products to grow their portfolio. The innovative online platform is the first of its kind to make commercial real estate investing more accessible to regular investors.
Pros
- Access to legal documents and monitoring your portfolio, all in one platform.
- All properties are pre-vetted
- Investment minimums as low as $5,000
- Regular investment updates posted directly to your dashboard
- Automated investing available
Cons
- Accredited investors only
- Does not offer portfolio management
Best for Investors Looking to Diversify: Streitwise
Streitwise is a unique online real estate investing platform that was designed to give investors, both big and small, an equal opportunity to invest in real estate. At its core, Streitwise is a real estate investment trust, but it’s one of the few online real estate investing platforms that is available to non-accredited investors.
Best For
- Investors looking to diversify
- Investors with less than $200k in annual income
- Passive traders
- Consistent quarterly dividends
- Low, transparent fees
- Low investment minimum
- Convenient and easy to use
- Limited offerings
Streitwise is a private REIT that invests in commercial real estate assets. Aiming to provide equal investment opportunities for all investors, regardless of their size. Its real estate investment trust is one of the few online platforms accessible to non-accredited investors. The REIT is open to non-accredited investors and comes with an average dividend yield of over 8%.
Pros
- Consistent quarterly dividends
- Low and transparent fees
- Low investment minimum
- Convenient and user-friendly platform
Cons
- Limited investment opportunities
Real Estate Investing Platforms
Real estate investing platforms are online market places where investors can find both commercial and residential properties and either buy the property or buy shares in it. The platform where you find the properties will usually take care of the physical management of that property, still making it less of a hassle than finding and managing the property on your own. What distinguishes these platforms from the ones we talk about above however is that they are usually only exclusive to accredited investors – those with at least $250,000 yearly salary and/or $1,000,000 net worth.
Origin Investments is a highly respected online investing platform that offers investors the opportunity to buy into a number of privately held real estate funds. When investors buy into an Origin fund, they are not just buying an investment offering, they are becoming partners with Origin itself. That’s because Origin’s founders invest company capital into every fund they offer. Origin has added several new offerings to its portfolio since it was last reviewed.
Best For
- Accredited investors
- Your real estate investment is managed by experienced real estate fund managers who have executed more than $1 billion in transactions and resulted in 0 losses across 43 deals.
- Origin has “boots on the ground” in their target investment markets, providing access to off-market deals
- Origin principals have invested $56 million of personal capital alongside investors, to ensure alignment of interests.
- Beginner-friendly platform is easy to operate
- A personal Origin representative is provided to every investor for personalized customer service
- Open to accredited investors only
EquityMultiple is a groundbreaking alternative investment platform that leverages high technology to make real estate investing easy to understand and accessible to all investors. The site specializes in offering both short- and long-term growth opportunities that allow hands-on investors to create and diversify their own investment portfolios.
Best For
- Accredited investors
- Hands-on investors
- Investors looking for quick returns
- Investors looking for low buy-in offerings
- Many investments with low buy-ins less than $10,000
- Numerous offerings with pay-outs in less than 12 months
- High-functioning website
- Incredible client support
- Only available to accredited investors
Pros of Real Estate Companies vs. Regular Real Estate Investing
There are definite advantages to investing through real estate companies as opposed to traditional investment vehicles. Among these are:
Cost
The buy-in is a lot less onerous when you’re investing with a real estate company. In particular, REITs can be most cost-effective — you can get in for as little as $500. Compare that to the cost of purchasing a property, getting it into shape and maintaining it, and either serving as a landlord or paying a property management firm for the privilege. You’ll quickly realize that real estate companies are the most budget-friendly way to start investing.
Barrier of Entry
The major barriers are experience and investment capital. When you opt to invest with real estate companies, these 2 factors are not nearly as crucial. Since you’re pooling your money with other investors, your initial outlay is relatively minimal compared to what it costs to purchase a commercial or residential property. Keep in mind that most real estate investors are financed by other individuals, not by banks. If you’re concerned about finding private funding, real estate companies are the way to go.
Less Risk
A good portion of the risk associated with real estate investing has to do with your duties as a landlord plus finding capital; neither of these applies when you invest through a real estate company. The company itself takes on the risk on your behalf, mitigating the danger of losing money.
Cons of Real Estate Companies vs. Regular Real Estate Investing
However, there are also a few disadvantages. These include:
Slow Returns
Property may be a solid way to make money, but it isn’t the most rapid one. Often renovations must be done before the property itself sees a profit — and in turn, you see one as well. If you’re looking to realize a profit right away, consider an investment property that’s already tenant-occupied or a REIT; both will provide quick cash flow.
Accessibility
While new investors can find a home with real estate companies, they won’t be able to do so with all such companies. Many deals are inaccessible unless you have $1 million in assets or at least $200,000 in annual income — and these can be the choice opportunities. This isn’t a deal-breaker but something to know as you start out.
Risky Asset Class
While risk is mitigated by the lower amount of investment here, the fact that real estate company deals are backed by just one asset does amp up the risk a bit. If rents plunge, for example, you will feel the sting.
Lack of Liquidity
If you need the money now, you can’t simply sell a building. In fact, if you’re investing through a real estate company, expect to commit to at least 3 years. That means you won’t be accessing tons of cash any time soon.
Start Your Investing Journey with Top Real Estate Investment Firms
Real estate investing is its own animal, regardless of whether you’re doing it through a crowdfunding platform or in a more traditional manner. Regardless of the venue, you have to be prepared to put cash upfront and be comfortable with the fact that this is not a liquid investment.
You’ll be making a commitment — and you won’t immediately be able to pull out your investment monies, so be prepared to stay with a property for at least 3 years. With real estate as with many things, longevity is its own reward.
Frequently Asked Questions
What are the standards for a REIT?
It must invest 75% of its assets in real estate, generate 75% of its income from real estate and pay 90% of its income to shareholders in the form of dividends.
Who can invest in REITs?
Anyone can invest in REITs that are trading on the stock exchanges.
Do most millionaires invest in real estate?
Real estate has been a lucrative avenue for building wealth for some of the most successful entrepreneurs globally. Studies show that a large majority of millionaires choose to invest in real estate, with an estimated 90% doing so.
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The post Best Real Estate Investment Companies by Benzinga Contributors appeared first on Benzinga. Visit Benzinga to get more great content like this.
