Investing in real estate can be an excellent strategy to diversify your investment portfolio, but getting started can be difficult. Fortunately, companies like Roots, Arrived, and Crowdstreet make real estate investing accessible and easier to manage via their online platforms.

If you’re looking for more flexibility in your investments, Arrived may suit you best as you can purchase fractional investments in residential or vacation homes, or invest in a portfolio of residential properties.

If you are very interested in commercial real estate and comfortable with a higher minimum investment, then Crowdstreet could be the right fit for you.

If you are looking for residential properties, low fees, and to invest in real estate that has a unique, positive social impact on the renters, Roots is for you.

All three platforms offer a great way to invest in real estate without the hassle. But, it's crucial to conduct thorough research, understand the risks involved, and seek professional financial advice before investing your money.

Below you'll find an in-depth breakdown of Roots, Arrived's Single Family Rental Fund, and Crowdstreet's C-REIT, highlighting their differences across 4 dimensions: property type, minimums, fees, and social impact.

Property Type

Arrived and Roots offer the ability to invest in a portfolio of residential properties, whereas Crowdstreet offers the option to invest in a diversified fund of commercial real estate or through single sponsor funds from specific real estate firms.

Roots

Roots's REIT offers a portfolio of residential and multi family rental properties. Roots has a unique model where the residents of the properties get invested in the fund if they are good renters (pay rent on time, take care of the property, and are a good neighbor). This has led to low vacancy, low turn costs, and high returns for its investors, as you’ll see below.

Arrived Homes

Arrived offers three ways to invest: you can purchase a fractional share of a vacation rental, you can purchase a fractional share of a single family property, or you can invest in the Single Family Residential Fund, which will be the focus of this article.

Crowdstreet

Crowdstreet offers a diverse pool of commercial real estate options for accredited investors to choose from when investing. Investors can invest in Crowdstreet's C-REIT or see their individual commercial properties on Crowdstreet's marketplace.

Minimum Investments, Fees & Liquidity

When it comes to fees and liquidity, Roots, Arrived, and Crowdstreet differ significantly. Arrived and Roots allow non accredited investors to invest with a low minimum. In contrast, you must be an accredited investor to start investing with Crowdstreet as it requires a minimum initial investment of $25,000.

Roots

Roots allows you to invest with a $100 minimum. Roots has a low fee structure, with only a $5 transaction fee for your first investment and a $3 transaction fee on any recurring investment. If you need to liquidate your funds before one year, you can, but there is a 6% early withdrawal fee. There is no withdrawal fee after the one year point.

Roots distributes to investors quarterly, providing investors the option to reinvest or cash out their distributions at that point in time. Roots offers the ability to liquidate quarterly as well, $100k or up to 5% of the fund.

Arrived Homes

Investment in Arrived's Single Family Residential Fund has a 0.25% management fee and other potential fees which may include but are not limited to closing costs, offering costs, property renovations, sourcing fees, holding costs, operating expenses, and more. These investments are positioned as longer-term investments with a six-month holding period on withdrawals. For those who are looking to liquidate earlier than 5 years, there is a 1-2% cost associated with doing that.

Crowdstreet

Crowdstreet requires $25,000 as a minimum initial investment, but depending on the type of investment made, the minimum may be higher (all investments are available on their marketplace).

Since Crowdstreet offers two different investment paths, we will be focusing on the fees for investing in their C-REIT. The annual fee to invest in CrowdStreet’s C-REIT is 1.5% of assets under management, plus possible sponsor fees. Sponsor fees are the fees the property owners or developers pay to use Crowdstreet’s platform, which they often pass on to the customer.

Crowdstreet emphasizes a long-term investment horizon, meaning it is very illiquid and investors are in it for the long haul.

Performance

All platforms have delivered returns to their investors with Roots generating some great returns.

Roots had an average annual return of 17.17% as of July 10, 2024 and has returned 51.5% from July 1, 2021- July 10, 2024.

Arrived’s average total historical returns for single family residential properties has ranged between 6-10%.

Crowdstreet reports an annualized historic internal rate of return of 12.9% for their marketplace. This marketplace return is referenced as the C-REIT's return data was not publicly available at the time of this article's update.

It's essential to note that past performance does not guarantee future results. Investing always involves risks, and a comprehensive understanding of these risks is crucial before investing your money.

Ready To Get Started? Invest With Roots

Imagine owning real estate where your renters wanted it to succeed as much as you do.

Start investing with as little as $100, and own a piece of the only REIT that creates wealth for both its investors and its residents. It took us years to build Roots, but you can invest in as little as 5 minutes.

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Sources

• Roots - Social Impact
• Roots - Performance
• Arrived - Why are homes held in a Series LLC
• Arrived - How does Arrived make money?
• Arrived - What fees do investors pay to property managers?
• Arrived - Arrived Single Family Residential Fund
• Arrived - What returns can I expect from Arrived properties?
• Arrived - Single Family Residential Fund
• Crowdstreet Marketplace Performance
• Crowdstreet - Is There an Investment Minimum?
• Crowdstreet - Commercial Real Estate
• Crowdstreet - Does Crowdstreet charge fees for investors?
• Crowdstreet Review 2024

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