Its real estate offerings come from a well-vetted network, but it only accepts accredited investors.
Commercial real estate investments on this crowdfunding platform start at $25,000. But only one deal is up for grabs at a time — and only for accredited investors willing to commit their funds for at least four years.
- Consider ArborCrowd if you’re an accredited investor ready to invest in commercial real estate.
- Look elsewhere if you prefer a platform with higher deal flow.
What we think of ArborCrowd
Is ArborCrowd worth a look? It might be — but only if you’re an accredited investor with at least $25,000 to spend and don’t mind locking your investment away for at least four years. Because that’s what it takes to be an ArborCrowd investor.
Truth be told, the average investor likely doesn’t meet ArborCrowd’s criteria triad, which means this platform won’t be for everyone. And if you ask me, the toughest of all is meeting at least one of the Securities and Exchange Commission’s criteria of an accredited investor:
- have earned at least $200,000 in each of the last two years and expect the same this year, or
- have a combined income of $300,000 with your spouse over the same period, or
- have a net worth of at least $1 million.
If you do meet the above criteria and you’re interested in commercial real estate, ArborCrowd may be for you. With this platform, you don’t need to worry about scrolling through marketplaces of properties or deals. ArborCrowd only offers one investment opportunity at a time. And that’s a result of ArborCrowd’s robust vetting process: the platform often sees more than 500 deal submissions annually and typically approves fewer than 10.
The result? An investment platform designed for accredited investors seeking high-quality commercial real estate opportunities.
How does ArborCrowd work?
Under the expertise of its parent company, ArborCrowd offers commercial real estate investment opportunities to accredited investors through its online crowdfunding platform. These investment opportunities were previously only available to institutional investors and high net worth individuals. Through ArborCrowd, any verified accredited investor can participate.
ArborCrowd only offers one investment opportunity at a time. It provides comprehensive documentation to help investors decide if they’d like to participate, including information about units under management, key market factors and property renovation highlights.
Here’s a rundown of the ArborCrowd investing process:
- Register for an account. Create an ArborCrowd investor account from its website.
- Review active deal. Learn more about ArborCrowd’s current deal and decide whether you’d like to participate.
- Submit an offer. Decide how much you’d like to contribute and submit your offer.
- Sign documentation. Verify that you’re an accredited investor through ArborCrowd’s complementary verification process and sign off on the offering documentation.
- Fund your investment. Pay with a wire transfer or check.
- Track investment. Review your quarterly ArborCrowd investment updates and receive distributions automatically deposited to your bank account.
Watch our interview with co-founder Adam Kaufman, where he explains how ArborCrowd’s crowdfunding platform works:
Who is ArborCrowd best for?
The ArborCrowd platform is designed with the following investors in mind:
- Accredited investors. Active deals on ArborCrowd are only available to verified accredited investors.
- Long-term investors. Investors should be prepared to lock in funds for at least four years.
Nonaccredited investors aren’t eligible to participate in ArborCrowd’s high minimum investment opportunities, narrowing the platform’s target audience to accredited investors with at least $25,000 on hand. And with ArborCrowd property average holding periods of four years, investors must be prepared for a long-term commitment.
Before investors can fund an investment offer, they must be willing to undergo ArborCrowd’s complementary verification process for accredited investors. The process ensures that investors meet at least one of the SEC’s criteria for accredited investors.
Pricing and fees
As far as commercial real estate crowdfunding platforms go, ArborCrowd’s minimums are comparable to its competitors. Both RealCrowd and CrowdStreet limit offerings to accredited investors, have $25,000 investment minimums and typically ask investors to commit funds for at least four years.
At first glance, ArborCrowd’s fees seem higher than most, with investors expected to cover acquisition, refinancing, disposition and assets under management fees. But that’s because ArborCrowd acts as the property’s asset manager on behalf of its investors. While other platforms don’t charge investors to participate in their offerings, they instead ask investors to pay fees to the property sponsor — something ArborCrowd investors typically don’t pay.
|Average acquisition fee||1.25%|
|Average refinance fee||1%|
|Average assets under management fee||0.5%|
|Average disposition fee||1%|
|Average hold period||4 years|
Pros and cons
- Prefunded deals. ArborCrowd invests its own capital in every deal it offers.
- Robust vetting process. ArborCrowd states that even though more than 500 deals are submitted to its platform annually, its underwriting team typically only approves nine annually.
- Established parent company. ArborCrowd’s parent company includes Arbor Realty Trust, a publicly traded REIT with over $2 billion in assets under management.
- Limited to accredited investors. Nonaccredited investors don’t qualify for ArborCrowd’s investment opportunities.
- High investment minimums. Investors need at least $25,000 to participate in ArborCrowd deals.
- Limited deal flow. ArborCrowd only offers one investment opportunity at a time.
- Limited support. We called its customer support line several times but never spoke to a rep.
ArborCrowd reviews and complaints
As of June 2021, there’s no available feedback on the ArborCrowd platform. While it has a Better Business Bureau (BBB) page, it’s not rated and there are no customer reviews or complaints. Its Trustpilot page is similarly sparse, with no reviews or designated TrustScore. The company also has no registered complaints with the Consumer Financial Protection Bureau. Even Reddit chatter is virtually nonexistent.
It’s unusual for ArborCrowd to have no customer feedback, despite being one of the newer platforms on the market. What does this mean for interested investors? Well, it makes ArborCrowd’s legitimacy harder to gauge. Plus, investor reviews are typically a good place to scout for red flags. Because of its lack of reviews, we recommend carefully assessing any documentation you’re asked to sign during the application process to make sure there aren’t hidden fees or clauses you should know about.
Compare real estate investing platforms
If you’re keen to invest in real estate, ArborCrowd is far from your only option. Compare platforms by investment minimums and type of real estate to find the service that best meets your needs.
How do I get started?
The signup process starts from ArborCrowd’s homepage:
- Select Join.
- Enter your email address, full name, residential address and phone number.
- Create an account password and select Signup.
You can then browse ArborCrowd’s current and closed offerings.
ArborCrowd customer service
Reach out to the ArborCrowd team by:
- Phone. Call 844-365-1200.
- Email. Send an email to firstname.lastname@example.org.
ArborCrowd offers commercial real estate investment opportunities to accredited investors with deals that start at $25,000. But only one deal is offered at a time, so if you’d prefer a wider selection of properties, look elsewhere.
Explore your real estate investment opportunities with other providers to find the platform best suited to your investment goals.