Real Estate Investment Companies

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Contributor, Benzinga
Updated: September 8, 2022

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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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List of Companies to Invest in Real Estate

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 REIT, a crowdfunding platform or a real estate market place.

Crowdfunding Platforms

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:

Arrived Homes

  • Arrived Homes
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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.

CrowdStreet

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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.

Gatsby Investment

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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.

CityVest

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    Must be accredited investing a minimum of $25,000.

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.

Yieldstreet

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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.

Mortar Group

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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.

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.

RealtyMogul

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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 online property investment platform 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. 

Streitwise

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Streitwise is a private REIT that invests in commercial real estate assets. The REIT is open to non-accredited investors and comes with an average dividend yield of over 8%.

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
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    For Accredited Investors Only

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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.

What Else Should I Know?

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

Q

What are the standards for a REIT?

A

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.

Q

Who can invest in REITs?

A

Anyone can invest in REITs that are trading on the stock exchanges.

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Accelerate Your Wealth

Arrived Homes allows retail investors to buy shares of individual rental properties for as little as $100. Arrived Homes acquires properties in some of the fastest-growing rental markets in the country, then sells shares to individual investors who simply collect passive income while waiting for the property to appreciate in value over 5 to 7 years. When the time is right, Arrived Homes sells the property so investors can cash in on the equity they've gained over time. Offerings are available to non-accredited investors. Sign up for an account on Arrived Homes to browse available properties and add real estate to your portfolio today.