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Get Started in Real Estate Investing

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Want to jump straight to the best? Diversyfund is definitely the best real estate investing platform for most people.

Real estate tends to be a more opaque type of investing. Sellers have more information than buyers, trends are more difficult to discern and lots of people have their hands out looking for a cut. 

Thankfully, real estate investing is becoming more transparent in the age of the internet and crowdsourcing. You no longer need to be an accredited investor or experienced property manager to access the returns provided by quality pieces of real estate. Passive real estate investing has allowed everyday investors to benefit from both commercial and residential properties and REITs offer cheap, affordable exposure through the open market. Adding real estate to your portfolio has never been easier. Here are a few tips to get you started.

Types of Investment Properties

Like any investment, getting started in real estate means choosing the proper vehicle. Investment properties come in all shapes and sizes, but most of them can be broken down into 3 different categories.

Residential Real Estate

Residential real estate includes single or multi-family homes, condos, duplexes, townhouses and more. Residential real estate has low barriers to entry and funding is often easier to come by for living units than commercial ventures.

Commercial Real Estate

Commercial real estate has a wide range of property types including apartment buildings, retail stores, warehouses, industrial parks, office buildings, hospitals, doctor’s offices and storage facilities. Commercial real estate has higher barriers of entry due to regulations and costs, but profits are often greater thanks to increased revenue sources.

Land

Property doesn’t always need to have a building on it. Vacant property can be a worthwhile investment if you think the value of the land will increase. For example, let’s say you own an unoccupied lot in a small town. If Amazon came in and opened a new distribution center in town that would supply 10,000 jobs, the vacant land you own may suddenly become very desirable to commercial and residential developers.

Passive Real Estate Investing

Before the days of the internet, real estate investing was a very hands-on industry. To reap the benefits of investing in property, you would usually need to be involved with the daily inconveniences of managing that property. It’s not like investing in stocks where you simply sit on shares in a brokerage account. Real estate investing used to require boots on the ground unless you had the money to pay for professional management.

Now investors can get their hands in the cookie jar through a number of different avenues. Real estate investment trusts (REITs) have long been available to investors through market exchanges, but with brokers dropping commissions, these types of real estate stocks are more accessible than ever.

Passive real estate investing has also evolved into a crowdfunding movement where investors bypass the brokers and REITs to actually stake ownership claims on individual properties. Companies like DiversyFund, CrowdStreet and RoofStock allow investors to get in on the ground floor of real estate investing and benefit from both property appreciation and rental cash flows.

Minimum Investment
$500
Fees
No management fees
Get started securely through Diversyfund’s website
Minimum Investment
$500
Fees
No management fees
1 Minute Review

DiversyFund isn’t your average crowdfunding platform. You’ll find that the company puts a twist on the traditional everyday crowdfunding platform, beyond anything you can find online with a simple Google search. You only have to look under DiversyFund’s skin one layer to surmise that DiversyFund is a conscientious developer and sponsor and helps hedge risk through improved vetting.

DiversyFund offers a multifamily real estate investment trust, the DiversyFund Growth REIT, and its main goals are to increase cash flow and resale value. It’ll automatically give you access to multi-million dollar real estate assets.

Best For
  • Those looking for an alternative investment beyond stocks and bonds
  • Individuals who aren’t sure they want to be landlords in the traditional sense
  • Investors who aren’t accredited
Pros
  • Only need to pony up $500 to get started
  • Open to investors all over the world
  • No expensive broker fees
Cons
  • You’ll only be able to access “blind pool” investments, which means that you can’t opt out of specific properties
  • There’s only one real investment option, the DiversyFund Growth REIT
Minimum Investment
$1,000
Fees
average 1-2%
Get started securely through Yieldstreet’s website
Minimum Investment
$1,000
Fees
average 1-2%
1 Minute Review

Yieldstreet is an alternative investment platform that allows you to access unique, diversified and expert-reviewed investments. From real estate offerings to works of art, Yieldstreet offers investments that have low correlations with the general markets, meaning they can act as a new source of portfolio diversity.

Yieldstreet’s platform is easy to initiate and use — open an account in just a few minutes and begin browsing available investments before your account is fully verified. Due diligence information is easy to find and clearly laid out, and most investments include additional resources to learn more about the investment’s industry or category. Although the majority of investments are only open to accredited investors, anyone can invest in Yieldstreet’s Prism Fund.

Best For
  • Passive income generation
  • Accredited investors
  • New investors looking for an intuitive platform
Pros
  • Wide range of expert-reviewed alternative investments
  • Investments that are pre-funded by Yieldstreet
  • Prism Fund open to non-accredited investors
Cons
  • Majority of investments only open to accredited investors
Minimum Investment
$50,000 *Origin Investments is for Accredited Investors only
Fees
1.25% per year
Get started securely through Origin Investments’s website
Minimum Investment
$50,000 *Origin Investments is for Accredited Investors only
Fees
1.25% per year
1 Minute Review

Origin Investments is a real estate investment company that has leveraged technology to make investing in institutional-quality private real estate more accessible. Origin Investments places an emphasis on transparency, and fund information and documents are easy to find in their investor web portal. Getting started with Origin is equally as simple, though you’ll need to be an accredited investor to join.

Best For
  • Accredited investors
Pros
  • 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
Cons
  • Open to accredited investors only
Minimum Investment
$10,000
Fees
1% – 1.75%
Get started securely through CrowdStreet’s website
Minimum Investment
$10,000
Fees
1% – 1.75%
1 Minute Review

CrowdStreet is a commercial real estate investing platform where people can invest directly in commercial projects. Unlike a brokerage firm, CrowdStreet isn’t a middleman. Instead, the platform acts as a marketplace where investors can pick and choose the best deals for their time horizon and strategy.

Available investments range from family living spaces to office buildings to storage facilities and investors can sign up for a free membership. Your investment options are limited to what’s live on the Marketplace and you’ll need capital to build a diverse real estate portfolio. Only accredited investors can access deals through CrowdStreet.

Best For
  • Investors looking for diversification away from stocks
  • Real estate investors interested in new opportunities
  • Accredited investors with lots of capital at their disposal
Pros
  • Unique opportunities available
  • Makes real estate accessible and understandable
  • Investors can devote capital to both debt and equity offerings
  • Offers quality education materials and answers to FAQs
Cons
  • Real estate is highly illiquid
  • Most properties require a minimum $25,000 investment
  • You’re limited to what’s on the CrowdStreet Marketplace
Minimum Investment
$1,000
Fees
0.85% asset management fee per year
get started securely through Fundrise’s website
Minimum Investment
$1,000
Fees
0.85% asset management fee per year
1 Minute Review

Fundrise makes real estate investing affordable to investors. The easy-to-use crowdfunding platform gives you a fixed rate of return on top real estate properties in the U.S. 

Here’s why investing your money through Fundrise can improve your portfolio and earn you a reliable source of income.  

Best For
  • Investors with a limited financial budget
  • Investors looking to instantly diversify their portfolio
  • Long-term investors with at least 5 years of commitment
  • Investors looking to earn fixed returns higher than 8%
  • Passive investors who do not want to monitor the market regularly
  • Investors looking for a transparent investment process
Pros
  • Low minimum balance to sign-up for an account
  • Plenty of low-cost real estate investments
  • Many listed properties project a lower risk rate
  • Wide range of real estate investments in prime locations
  • Open to non-accredited investors
  • Regulated by the SEC
  • Consistent track record of high returns
Cons
  • Charges a fee on early withdrawals from investments
  • Customer support does not feature live chat
  • Liquidity issues as eREITs and eFunds are not exchange traded

Active Real Estate Investing

Active real estate investing is the path to higher profits, but you’ll need to get your hands dirty to be successful. Active real estate investors locate land or properties themselves and do all the legwork required to obtain financing. Then they either manage the property themselves or outsource the work to a professional management team.

Active real estate investing is riskier than passive real estate investing. A building is expensive to maintain and quality renters can be difficult to find. If you choose to manage the property yourself, you need to be ready to perform daily maintenance, collect rent, find new tenants to replace outgoing ones, pay taxes and handle complaints between residents. Managing a property is a full-time job, which is why many owners choose to part with some of their profits by hiring a building manager.

Active real estate investing usually falls into 1 of 2 camps:

  • Managing rental properties
  • Flipping houses

Rental properties can be leased out to either commercial or residential tenants. One of the benefits of active real estate investing is the amount of authority you have in the decision-making process. You select the properties, negotiate the loan terms, choose your tenants and manage as you see fit. Rent prices and amenities aren’t decided upon by outside forces but by you as the property owner.

Flipping houses is a bit different but still requires a lot of hands-on work. The term “flipping houses” doesn’t just mean single-family homes, but any type of residential living space. House flippers take beaten-down properties, fix them up as quickly as possible and sell them to new owners. House flipping can be a lucrative venture but the capital required for renovation can be a lofty sum and setbacks are common. Plus, you’ll still need to find a buyer once your hard renovation work is complete.

Buy REITs

Interested in learning how to invest in REITs? REITs can be purchased from most brokers just like any other stock. These are great vehicles for investors because they provide exposure to the real estate sector for the price of a publicly-traded share. You don’t need accreditation or huge sums of capital — just enough to purchase the number of shares you desire.

By law, REITs must pay out 90% of their profits to shareholders. REITs often pay high dividends because of this, but their share prices tend to be less volatile than the overall market. Additionally, REIT investors don’t need to worry about taxes, tenants, loan terms or any of the day-to-day management required to maintain an investment property.

To buy a REIT, simply research the type of vehicle you want (equity vs. debt, commercial vs. residential) and choose the one that best fits your investment objective. Locate the corresponding shares through your broker and purchase the amount you wish to invest. Make sure you understand the tax implications of high-dividend stocks like REITs before buying any shares.

Best For
Futures Trading
Overall Rating
Get started securely through TradeStation’s website
Commissions
$0
Account Min
$0
1 Minute Review

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders
Pros
  • Comprehensive trading platform and professional-grade tools
  • Wide range of tradable securities
  • Fully-operational mobile app
Cons
  • Confusing pricing structure to leave new traders with a weak understanding of what they pay
  • Cluttered layout to make navigating TradeStation’s platform more difficult than it should be
Best For
Intermediate Traders and Investors
Overall Rating
Get started securely through Webull’s website
Commissions
$0
Account Min
$0
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • Commission-free trading in over 5,000 different stocks and ETFs
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Leverage of 4:1 on margin trades made the same day and leverage of 2:1 on trades held overnight
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
Best For
Chase Customers
Overall Rating
Get started securely through JP Morgan Chase’s website
Commissions
$0
Account Min
$0
1 Minute Review

Chase You Invest is the retail brokerage arm of JP Morgan Chase, the largest bank in the United States. While most of the firm’s products are targeted toward wealthy clientele, You Invest gives novice investors a chance to learn about markets, select the best securities and plan for future goals like retirement. No futures, forex, or margin trading is available, so the only way for traders to find leverage is through options. 

Not all investors will appreciate the basic setup and simplistic trading suggestions, but plenty more want to learn about markets but just don’t know where to get started. Chase You Invest provides that starting point, even if most clients eventually grow out of it.

Best For
  • Investors using Chase banking products
  • Mobile traders
  • Retirement savers
Pros
  • Easy to navigate
  • Functional mobile app
  • Cash promotion for new accounts
Cons
  • No forex or futures trading
  • Limited account types
  • No margin offered

Real Estate Offers Diversification in Ways Stocks Can’t

The stock and bond markets tend to make the major moves in unison. When a recession occurs, no sector or industry is spared from stock decline. While real estate is far from a riskless investment, it does provide assets that aren’t directly correlated with the stock or bond markets.

Real estate investing reflects not just the broader economy, but smaller, local economies as well. A quality business in a great area can thrive even if markets crash and recessions hit. By adding real estate to your portfolio, you’ll be adding another layer of diversification to your investment capital.

Accelerate Your Wealth

DiversyFund accelerates your wealth creation by reinvesting cash flows from the properties — the DiversyFund Growth REIT is a public non-traded REIT designed to build wealth by investing in multifamily real estate and intends to build wealth over an approximate 5-year timeline. You don’t have to be an accredited investor to invest in Diversyfund. Open a Diversyfund account today.