You can get started with only $500, but investments are highly illiquid.
Looking to break into the world of commercial real estate investing? DiversyFund offers a REIT investment opportunity to non-accredited investors with minimums that start at $500. The downside? Investors must leave their money in the fund for years.
- Consider DiversyFund if you’re an accredited or nonaccredited investor looking to invest in a real estate investment trust.
- Look elsewhere if you’re seeking RELPs, REIGs or individual rental properties.
Minimum deposit to open
11% to 18%
How does DiversyFund work?
There are two ways to invest in commercial real estate through DiversyFund.
DiversyFund’s real estate investment trust is open to nonaccredited investors and requires a $500 minimum. The fund employs a value-add strategy, which means dividends are automatically reinvested to take advantage of compound interest.
The fund primarily invests in multifamily assets that are sold after year four of the investment term. Investors need to be prepared to let their money sit for the length of the investment term before they’re eligible to receive any returns.
Since DiversyFund runs and manages the fund, it doesn’t charge any platform or management fees. The fund is registered with the Securities and Exchange Commission (SEC) and is required to adhere to SEC reporting requirements and audits.
A quick look at the investment process:
- Create an account. It’s free to open an account on DiversyFund’s website.
- Choose your investment. Decide whether you’d like to invest in DiversyFund’s REIT or become a Series A Round investor.
- Make an investment. Enter the amount you’d like to invest and transfer funds from an external account.
- Monitor returns. Track the value of your investments from the DiversyFund platform.
Series A Round
DiversyFund’s Series A Tranche II allows accredited investors to buy into the investment platform itself. A $25,000 minimum investment is required and investors become co-owners of the DiversyFund platform and real estate sponsors in DiversyFund’s portfolio.
Who is DiversyFund best for?
The DiversyFund platform is well suited to:
- Nonaccredited investors. Unlike many of its competitors, DiversyFund opens up its commercial real estate offerings to nonaccredited investors.
- Long-term investors. Whether you invest in DiversyFund’s REIT or become a Series A Round investor, you’ll need to be prepared to let your money lie for several years.
DiversyFund’s low $500 minimum opens the door for new investors dipping their toe into the world of commercial real estate. The platform’s REIT is a solid option for those seeking a long-term real estate investment without the hassle of owning or managing their own property.
The downside? You don’t have any say in how or where your money is invested, so if you’re seeking more control over the buying and selling process, DiversyFund likely isn’t for you.
The platform also offers a unique opportunity to accredited investors with minimum investments of $25,000 on hand. As a Series A Round investor you become a sponsor for the properties in DiversyFund’s portfolio and part-owner of the online platform.
The risk? DiversyFund doesn’t have an iron-clad exit strategy in place. It says it plans to execute an IPO or M&A exit within the next two to four years, depending on market conditions, but requests that its investors remain flexible throughout the process.
Pricing and fees
DiversyFund cuts out platform and management fees by managing its own fund. Its REIT is open to any non-accredited investor that can make the minimum investment. It doesn’t cost anything to create an account and everything is managed through the DiversyFund platform.
As far as investment minimums are concerned, DiversyFund is one of the most accessible platforms on the market. Of its competitors, only Fundrise offers a minimum as low as DiversyFund’s. Streitwise and PeerStreet require a $1,000 minimum, while you’ll need $25,000 to invest in anything on CrowdStreet’s marketplace.
|Series A Round||$25,000|
To become a Series A Round investor, you’ll need to meet the SEC’s criteria for accredited investors. To be an accredited investor, you must meet one of the following:
- You earned over $200,000 in each of the last two years and expect the same for this year.
- You and your spouse earned over $300,000 in each of the last two years and expect the same for this year.
- You have a net worth of at least $1 million, alone or together with your spouse, excluding the value of your primary residence.
Pros and cons
- Low minimum. Get started as an investor with as little as $500.
- Open to nonaccredited investors. Investors don’t need to meet any income or net worth requirements to invest.
- No management fees. Because it manages its own fund, DiversyFund doesn’t charge any platform or account management fees.
- Well-reviewed. DiversyFund receives high marks from investors on both the Better Business Bureau (BBB) and Trustpilot.
- Highly illiquid. Investors must be prepared to lock in funds for years at a time.
- Limited support. DiversyFund’s customer support is limited to email inquiries.
- Limited control. No matter your level of investment, you’ll have no say in the properties DiversyFund invests in.
DiversyFund reviews and complaints
DiversyFund receives high praise across numerous review platforms. As of May 2020, DiversyFund is a BBB-accredited business with an A+ rating and a 4- out of 5-star reputation from its 21 BBB customer reviews. On Trustpilot, DiversyFund maintains a TrustScore of 4.4 out of 5 based on 117 reviews. There are no complaints against the platform on the Consumer Financial Protection Bureau.
Customers enjoy the platform’s free, low minimum approach to investing, but complain of limited investment options. The platform’s customer support receives mixed feedback — some investors had pleasant experiences with knowledgeable, informative reps, while others said they felt the representatives spoke down to them.
How do I get started?
The signup process begins on DiversyFund’s home page:
- Click Sign up.
- Enter your full name, phone number and email address. Create a password and click Create account.
- Verify your account by following the link sent to your email inbox.
DiversyFund customer service
The only way to reach DiversyFund support:
- Email. Send an email to firstname.lastname@example.org for a response from the team.
Compare with other real estate investing platforms
DiversyFund opens up commercial real estate investing to nonaccredited investors with low capital requirements and no platform fees. But customer support is limited and investments are highly illiquid.
Not sure DiversyFund is right for your portfolio? Take a look at your real estate investment options with other providers.