RealCrowd is not, technically speaking, a “crowdfunding” platform. But many investors exploring crowdfunding and online alternative investments are looking for opportunities in real estate, and RealCrowd provides a marketplace to match investors with commercial real estate offerings (including both individual properties and funds). RealCrowd does not perform any significant curation or due diligence, and only sets a standard for the experience level of the offeror (10+ years).
RealCrowd’s site provides a lot of useful detail about each offering, and notably many sponsors offer funds as well as individual property investments, with a mix of debt and equity options. Their marketplace model is somewhat similar to what Roofstock and Investability offer in residential real estate.
RealCrowd is also piloting a tool for financial advisors to match accredited investors to opportunities on the platform.
Types of investments RealCrowd offers
RealCrowd lists commercial real estate investment offerings throughout the US, including multifamily, retail, office, industrial, hospitality, development, and a range of funds. Notably RealCrowd does not participate in any of the offerings itself. All individual property investments are equity investments, while some funds may include other investment types. Minimum investments are set by the offeror, and while there is currently one opportunity with a minimum of $10K, most opportunities have minimums of $25K or $50K.
What do you get when investing with RealCrowd?
RealCrowd itself does not directly issue any securities, so investors should carefully review offering documents to understand what type of security they’re getting. Typically real estate investments are made through a special purpose vehicle (SPV) like an LLC, or in some cases various flavors of Notes.
How does RealCrowd make money?
RealCrowd is free for investors, and does not charge any AUM fees or carried interest. They charge a “technology access fee” to the operating partner (offerer).
Potential returns and cashflow
Returns vary, and as the platform does not curate its offerings, it does not have a particular range of returns that it targets for delivery to investors. The offerings available as of writing indicate returns of 10-29%. Cash flows vary by offering, typically either quarterly or monthly.
Breadth of offerings on RealCrowd
As of this writing, there are about 10 active investments, as well as one “waitlist” opportunity. Three of these are funds. These investments are all U.S.-based, but are well diversified in terms of U.S. region. Listed IRRs range from 10% to 29%.
Regulatory framework and due diligence expectations
Unlike most crowdfunding platforms, RealCrowd is specifically not an intermediary, but provides a platform to connect investors with commercial real estate deal sponsors. Essentially, their business model is to provide offerors with a technology platform and to promote their offerings. RealCrowd is not a broker-dealer, and does not handle any investor funds or securities.
Notably RealCrowd itself doesn’t do any due diligence or curation in selecting investments, and all information about the investments is provided by the offeror only. RealCrowd does require that each offeror have 10+ years of experience at the principal level, and $50M+ transactional history as principals.