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RealCrowd is a platform that focuses its efforts on commercial real estate investment. There is a range of different types of properties available to invest in on the platform.
The properties themselves are listed on the RealCrowd site through third-party firms, with RealCrowd effectively being the middleman marketplace to allow investors to get a piece of the action of these properties. The company was started by a team that has a lot of experience in the real estate and fintech sectors, bringing this experience to bear to create the RealCrowd offering.
This RealCrowd review looks at all of the various compartments of this offering, giving you a good insight into what you can expect if you sign up for an account.
You can invest directly into deals without having to be concerned with excess fees and management procedures.
Free to use
Signing up for an account with RealCrowd is free and you do not have to pay the platform any fees as an investor.
The sponsors that are listing properties on RealCrowd are of a high-caliber, with good track records and often being well-capitalized.
You have access to a lot of top-quality information about each given deal that allows you to make a fully informed decision and knowing all of the important facts for the due diligence process.
Only open to accredited investors
Only those people who have been approved as an accredited investor are able to invest in deals on RealCrowd.
Lack of a secondary market
As of now, there is no secondary market available on RealCrowd for your investments. Therefore, you have to see out the duration of the given deal.
At RealCrowd our mission is to empower individuals by providing access to quality real estate investments in responsible and efficient ways.”
Where RealCrowd Stands Above Competition
The quality of the sponsors listing properties on the RealCrowd platform is extremely high and investors do not have to worry about paying any sorts of platform fees.
Where RealCrowd Falls Short
The RealCrowd offering is only open to accredited investors, which will rule a lot of people out of using the platform.
Fees & Features
There is no fee in place for investors on the RealCrowd site. It is the party that is selling these investment positions that will be charged a fee for getting access to the database of potential investors.
This is ideal, as investors are not losing money immediately after they have made an investment. Some of the deals may have their own types of fees and commissions that you have to consider, but this is dictated by the sponsor rather than RealCrowd.
How Does RealCrowd Work?
RealCrowd is a platform that effectively acts as a marketplace for third-parties to advertise properties that can then be purchased or invested in by the platform's users. RealCrowd itself does not find these deals, it is the sponsors who post the properties on the listing platform.
You can sign up for an investor account for free and then start browsing all of the various investment opportunities. All of the properties will outline key info that you need to know in order to validate the merits of a given project. This includes the projections for the return you can expect, as well as a breakdown of the asset profile and in-depth details about the property itself.
Once you have spotted a good investment opportunity, you can then decide how much you wish to invest. Most projects will have a minimum investment size that has to be met. All of the documentation, communications and signature processes are handled for you by RealCrowd.
Each of the respective investment options will be broken down into four different risk/reward categories.
The Core offering is a lower risk and return, being the most conservative of the options. The Core-Plus is for moderate risk and return, generally being properties with strong tenants bases and little to no financing issues. The Value Add option is a medium to high risk and return opportunity. These properties will usually have to be improved in some manner.
Finally, the Opportunistic/Development option is the highest risk/return option open to you. These properties will require a lot of work, but will then also carry potentially high returns. This could be the complete redevelopment of a property.
There is a wide range of different types of properties for you to choose from with the RealCrowd platform. There is everything from industrial real estate to hospitality, multi-family and multi-focus properties. There are funds on offer, as well as having the ability to invest in specific properties. Each property will have in-depth info about the property and how the sponsors plan to deal with different obstacles and challenges.
The average investment liquidity terms will be between 3 and 5 years. Investment offerings on RealCrowd are only open to accredited investors and not all of the sponsors will allow non-US investors.
Deposits & Withdrawals
You do not need to add funds in any shape or form to your RealCrowd account. Instead, when you apply to invest in a deal and get accepted, you will then work with the sponsor for making the payment. This is generally going to be a wire transfer, with an escrow account often being used.
Unlike a lot of other similar platforms, the minimum required investment starts at $5,000 on RealCrowd, which is ideal for those accredited investors who are just trying to dip their toes in this space initially. Naturally, some projects will have their own minimum investment amounts depending on their preferences that will need to be followed.
If you have a question about the RealCrowd offering, there is a decent FAQ section that will answer a lot of the questions that you may have. Otherwise, you can contact the customer support team by phone or email. You can expect quick and quality responses from the support team no matter what issue you may be having.
There is also a six-week course that you can get access to on RealCrowd that will walk you through all of the basics of commercial real estate investment.
Security & Reliability
To keep the RealCrowd platform secure, it utilizes the Windows Azure environment, which is a secure, market leader in cloud-based services. One of the co-founders of the company was even involved in the development of this Azure environment when acting as an advisory board member to Microsoft and he also was part of a team within the Department of Defense that was developing secure software.
All personal data is properly encrypted when it is being transported through the site, as well as when it is being stored. Therefore, you can rest assured knowing that your data is kept safe at all times with RealCrowd.
What RealCrowd Is Best For
- Accredited investors as all of the deals are of a high-quality and they can only be invested in by accredited investors.
- All types of risk profile. There are four different core risk profiles you can choose from with a deal, depending on your particular risk tolerance and situation.
- Low-cost seekers as there is no fee charged by RealCrowd on investors, it makes all of its money on the sponsor side of the deal.