The fractional real estate investment platform Arrived Homes hit a major milestone last month – funding its 200th single-family home. The company has now funded 203 investment properties with a total value of more than $75 million.
The homes were all funded by retail investors, who put up as little as $100 each to buy shares of the properties.
Why would investors buy shares of single-family homes? Most of the properties funded on the platform are leased out to long-term tenants, who pay monthly rent that trickles down to each shareholder in the form of quarterly dividends. The rest of the homes are used as short-term rentals – rented on a nightly basis through sites like Airbnb.
Investors are also expected to benefit from appreciation over the long term. When the properties are eventually sold, the equity will be distributed among the shareholders.
The idea of fractional investment in rental properties caught the attention of Amazon.com founder Jeff Bezos early on. The billionaire invested in Arrived Homes’ $37 million seed round in 2021 through his Bezos Expedition fund. Bezos was joined by several other high-profile investors, such as Salesforce.com founder Marc Benioff through Time Ventures, former Zillow Group CEO Spencer Rascoff and Uber Technologies CEO Dara Khosrowshahi, who also invested in the real estate investment platform.
Bezos increased his bet on the investment platform earlier this year by making another investment during the company’s $25 million Series A round.
Fractional real estate has become a popular asset class for retail investors, especially since the stock market has been experiencing extreme volatility over the past couple of years and cryptocurrency has shown few signs that it can recover to its previous price levels.
Arrived Homes CEO Ryan Frazier said, “While Americans consistently rank real estate as the best long-term investment, it has been notoriously challenging. By allowing anybody to buy shares in a professionally managed rental home in less than four minutes and starting at $100, Arrived has made investing in real estate as easy as buying a book on Amazon.”
The investment platform doesn’t appear to be slowing down, despite the uncertainty in the housing market. The company’s website shows four new offerings set to go live, including three long-term rentals and one short-term rental.
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