Pros, Cons, and Who Should Set up an Account

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Is EquityMultiple right for you?

Founded in 2015, EquityMultiple is a commercial real estate platform that offers managed assets — including equity, preferred equity, institutional commercial real estate, and senior debt — to accredited investors (individuals who have a minimum

net worth

of $1 million or make $200,000 annually, or $300,000 for couples).

The platform also gives investors the option to build wealth through self-directed IRAs, LLCs, trusts, LPs, and joint accounts. As of January 1, 2022, EquityMultiple has returned $176.2 million to investors.

EquityMultiple vs. RealtyMogul

While EquityMultiple and RealtyMogul have the same account minimum requirements ($5,000), there are a couple of key differences between the platforms. The first is that EquityMultiple only serves accredited investors, while RealtyMogul serves both accredited and non-accredited investors.

Another thing to consider is investment types and fees. Both EquityMultiple and RealtyMogul offer commercial real estate, but EquityMultiple is the better choice for accredited investors in search of professionally managed, institutional-level real estate and equity and debt investments. RealtyMogul offers multiple REITs, individual properties, and more.

EquityMultiple vs. CrowdStreet

EquityMultiple and CrowdStreet both only offer real estate investing for accredited investors. But the platforms vary when it comes to account minimums, fees, and investment choices.

You’ll likely pay more to get started with CrowdStreet since its base minimum requirement (which can be $100,000 for some products) is $25,000. However, CrowdStreet doesn’t charge investors fees to buy stake in its deals and funds — but sponsors typically pay between 1-5%, and tailored portfolios cost investors 2.5%.

EquityMultiple, on the other hand, best suits accredited investors who want to get started with lower minimum requirements and invest in institutional commercial real estate, equity, and more. It has a base minimum requirement of $5,000, but minimums can also range from $10,000 to $30,000, depending on the offering.

Ways to invest with EquityMultiple

EquityMultiple’s offerings are divided into three strategies:

• Fund Investing: This investment approach has the highest minimum requirement. Minimums start as low as $20,000 and span up to $30,000. It best suits those in search of diversification across several asset types. EquityMultiple targets debt, equity, Opportunity Funds, and CRE securities with this approach. Plus, it has an investment term of 1.5 to 10+ years.
• Direct Investing: With minimums as low as $10,000, this approach caters to investors who prefer to focus on individual properties. EquityMultiple’s target duration for this strategy ranges from six months to five (or more) years, and it leans toward debt, preferred equity, and common equity.
• Savings Alternative: This strategy is perfect for investors who want shorter terms. EquityMultiple primarily uses diversified, short-term notes here, and the investment term ranges from three to nine months. This approach also has the lowest minimum requirement, as you can get started with as little as $5,000.

As for returns, debt strategies generate 7-12% per year. Preferred equity strategies have a current preferred return of 6-12% and a total preferred return rate of 10-18%. Common equity strategies have an internal rate of return of 10-24%, and returns vary for their funds.

Prospective investors should also note that joining EquityMultiple doesn’t give you access to publicly traded REITs. When it comes to its fund strategies and diversification approach, it mainly invests in non-traded REITs and real estate funds (non-traded REITs can’t be publicly traded on the market).

EquityMultiple: Is it trustworthy?

EquityMultiple currently has an NR (“No rating”) with the Better Business Bureau. BBB ratings usually range from A+ to F, but the bureau says it doesn’t have sufficient information to issue a rating on the real estate platform.

BBB ratings reflect the bureau’s opinion of how well a company interacts with its customers, and takes into account factors like type of business, time in business, customer complaint history, licensing and government actions, advertising issues, and more.

However, it’s still important that you do your research before setting up an account. This is because the bureau’s ratings don’t guarantee performance or reliability.

EquityMultiple’s record is clear of any major lawsuits or scandals. The platform’s BBB profile also shows that it has zero complaints filed.

EquityMultiple: Frequently asked questions (FAQ)

What is EquityMultiple?

EquityMultiple lets you invest in professionally managed commercial real estate. The platform’s investment choices include institutional commercial real estate, senior debt, equity, and preferred equity. Plus, you can invest through self-directed IRAs, LLCs, LPs, trusts, and joint accounts.

Is EquityMultiple only for accredited investors?

And it is. EquityMultiple only serves accredited investors at this time.

What does it take to be an accredited investor?

In order to qualify as an accredited investor, you need to either have a net worth of at least $1 million, or make $200,000 annually ($300,000 for couples).