Fractional Real Assets & Farmland

Alternative REITs & Platforms

Arrived Homes, RealtyMogul, Fundrise, etc.

Investment Overview

Alternative REIT platforms provide fractional ownership in single-family rentals, industrial warehouses, data centers, and non-traditional real estate through crowdfunding. Leading platforms: Fundrise (500K+ investors, $10 minimum), RealtyMogul ($7B transacted, $1K-$5K minimums), Arrived Homes (single-family rentals, $100 minimums). Returns: 8-12% annually combining rental income (4-6%) and appreciation (4-6%). These platforms democratize institutional real estate: Blackstone owns $300B real estate, now retail investors access similar assets via $100-$5K minimums. Key advantage over traditional REITs: Direct asset selection, lower fees (1-2% vs. 3-5% for non-traded REITs).

Market Context & Trends

Real estate crowdfunding reached $50B annually (2024) after Fundrise pioneered eREITs (2015). Arrived Homes grew to 50,000+ investors owning 500+ single-family rentals ($250M+ portfolio). Industrial/logistics REITs surged 2020-2024 (Amazon, e-commerce demand); crowdfunding platforms added exposure. Data center REITs boomed with AI demand. However, 2022 interest rate hikes pressured valuations -20-30%; platforms suspended redemptions temporarily (Fundrise limited to 5% quarterly). Liquidity remains key concern vs. public REITs (instant trading).

How to Invest in Alternative REITs & Platforms

Fundrise eREITs: Diversified portfolios (multifamily, industrial, Sunbelt), $10 minimum, 8-12% historical returns

RealtyMogul REIT I: Income-focused REIT, 6-8% target, $1K minimum, quarterly distributions

Arrived Homes: Single-family rental fractional ownership, $100 per property, 8-12% target including appreciation

CrowdStreet: Commercial real estate marketplace, $25K minimums, individual deals + funds

DiversyFund Growth REIT: Multifamily focus, $500 minimum, 5-year minimum hold, 17% historical (includes appreciation)

Key Platforms & Access Points

Fundrise: Largest real estate crowdfunding, 500K+ investors, $4B+ AUM, eREITs offer quarterly liquidity

RealtyMogul: $7B transacted, accredited and non-accredited options, REIT I (income) and REIT II (growth)

Arrived Homes: Single-family rental focus, buy shares in individual properties, $100 minimums

CrowdStreet: Sophisticated investor platform, $25K+ minimums, individual commercial deals

DiversyFund: Multifamily focus, in-house property management, 5-year minimum hold (illiquid)

Key Investment Metrics

Occupancy rates: 90-95% healthy for residential; 85-90% for commercial

Debt-to-equity: <60% safe for real estate; higher leverage = interest rate sensitivity

Geographic diversification: Sunbelt (Texas, Florida, Arizona) growth vs. Midwest stability

Cash-on-cash return: Annual distributions / invested capital; 5-8% typical

Exit strategy: How will properties be sold? 5-7 year hold typical, then market sale or refinance

Risk Considerations

Understanding these risks is critical before investing in alternative reits & platforms.

Illiquidity: 5-10 year lockups typical; early redemption limited or impossible; emergency capital needs problematic
Interest rate sensitivity: 2022 rate hikes caused -20-30% valuation drops; redemptions suspended temporarily
Platform risk: If Fundrise/RealtyMogul bankrupt, asset ownership unclear despite REIT structure
Concentration: Some platforms hold 80% assets in single geography (Texas, Florida); regional recession risk
Fee opacity: Reported fees 1-2% but actual costs (acquisition, disposition, property management) often 3-5%

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