If you are an avid investor or know a bit about investing, you know how important diversifying your investments is for your money.
Having a solid mix of investments in different industries as well as different asset classes can help protect your portfolio in various economic times.
Yet another great area for diversification is to add in commercial real estate, but this is often intimidating to most newbie investors for various reasons.
However, investing in real estate has become much easier and lucrative for investors, thanks to online platforms like DiversyFund.
But before we get into that, it’s important to understand a bit more about investing in commercial real estate and how the internet has changed the game.
Investing in Commercial Real Estate
Investors have access to commercial real estate by purchasing physical properties, via Real Estate Investment Trusts (REITs), or exchange-traded funds (ETFs).
Yet, there are a few challenges with the above.
- Investing and owning physical properties can require a high net worth and more upfront capital. You are assuming a lot more risk and it can be time-consuming if you are managing the properties on your own.
- And with publicly traded REITs or ETFs, those assets follow the stock market movements. While they are good to have a small percentage of your portfolio allocated to these, they won’t offset any stock market corrections or help keep losses at a minimum since they act as stocks.
However, thanks to advances in technology, real estate crowdfunding platforms have become popular choices and give more investors a chance to get active with real estate for less upfront money.
And it can be done from the comfort of your home– all you need is an internet connection!
These crowdfunded REITs are privately held funds and are not publicly traded, but they must register under the SEC’s Regulation Crowdfunding.
Advantages and Disadvantages
When investing, there are advantages and disadvantages to what you choose to invest in. There will also be risks involved, but there are also plenty of rewards as well.
Investing in commercial real estate is no different.
Advantages of commercial real estate:
- More portfolio diversification from the stock market
- Higher returns from property appreciation, dividends, rental income, etc.
- Volatility does not follow all economic news or events
- Tax benefits that work to your advantage
Disadvantages of commercial real estate:
- An illiquid asset, meaning accessing your money is not as simple as just selling it right away like a stock or bond
- A long-term investment, many properties you should be invested in for longer than five years to see results.
- Potential for more risks, loans can default, maintenance and building costs, damages, issues with insurance, etc.
Investing With DiversyFund
Just like diversifying with stocks and bonds, there are various types of real estate you can mix into your portfolio too. Single family, multi-family, land, etc.
And because there is always a need for commercial real estate (apartments, shopping centers, offices, industrials, etc.), the returns on investments, plus less investor competition, makes it a potentially great investment choice for you.
One of the emerging commercial real estate investing platforms is DiversyFund, which is starting to stand out among the growing crowdfunding and alternatives market.
What is DiversyFund?
DiversyFund is the only no-fee online platform that allows you to invest in their commercial real estate fund with a minimum investment at $500.
The company currently has one main offering, that they call the DiversyFund Growth REIT. This fund is a SEC-regulated Real Estate Investment Trust (REIT) that builds wealth by investing in cash-flowing apartment buildings.
The company chooses and focuses on long-term capital appreciation from the renovation and repositioning of the multifamily properties under their ownership.
Over the last few years of researching and getting involved with investing, I’ve had an inside look and experiences with many online platforms. But DiversyFund has really stood out to me.
Here’s a bit more insight into their platform with my review as well.
The goal with online platforms like DiversyFund is to give more people the options to invest like the 1%.
Yes, you’ll still want to do some research and understand how real estate investing works, but it gives the everyday person a chance to help build their wealth.
Here are some reasons to consider investing with DiversyFund:
- DiversyFund is currently the only no-fee platform. This means, they do not take any platform or management fees from their investors like every online real estate platform. Instead, they make a percent of the profits after their investors are paid from any of their holdings. Since the company doesn’t make money on any platform fees, you bet they are going to work hard to source the best deals.
- Their team of experts has 40+ years combined of commercial real estate investing experience. You want to feel you can trust the decisions of properties being bought and have people who know what they are doing.
- They do everything from sourcing the deals to selling the properties. This means that DiversyFund actually owns the properties, where most of the competitors in the space use third-party sources or partnerships.
- Their historical average returns over the last few years has been over 17%, some of the highest real estate returns from any of the online platforms for non-accredited investors. A great sign of their property choices and efforts for their investors.
- Their fund is for both accredited and non-accredited investors where everyone has a chance to get into real estate investing.
Similar to the pros and cons of investing in commercial real estate, no platform is entirely perfect either.
DiversyFund is doing some amazing things that their competitors are not, but there are also some minor downsides too.
- Currently only offer one investment fund for everyone, their Growth REIT. Many of their competitors offer different variations of investing styles to help you choose or diversify more.
- Property geographics are limited currently. Right now, the location diversity of their properties is primarily in Texas and California. You still get diversified property types and cities where the properties are, but mixing different states and coasts would be great offerings. The team is actively looking at opportunities across the country, so I’m sure more diversity of properties is coming.
- List of property information they invest in could be a bit more detailed. While DiversyFund provides a picture and some info on the properties they own, many others in the space provide much more info of what you’re investing in.
However, the company is relatively new, improving their process, and growing their investments.
So to me, the negatives are fairly minor and I think they’ll quickly become a leader in the commercial real estate space over the next few years.
Creating An Account:
I like how simple getting started investing in commercial real estate is with their platform. Because DiversyFund does all the work, the team has extensive real estate knowledge, and they manage the deals, your life is much easier.
How to Get Started In Four Steps:
- DiversyFund is easy to get started with, you can create a free account in a few minutes.
- Once you join, you have exclusive access to the current investment funds to choose from. This includes their Growth REIT, which anyone can invest with a minimum investment of $500.
- When you are ready to invest, you can quickly complete your transaction online. If you have any questions you can reach out to them via DiversyFund Live Chat, their Investor Relations Team or by scheduling a call.
- Monitor investments: You have full visibility into the performance of your investment via their dashboard, so you can review your portfolio and check out the dividends you earn on a monthly basis (they automatically reinvest them).
Is DiversyFund Legit?
As you start saving and investing your money, you should be looking for more ways to grow your wealth.
Investing in commercial real estate is a great wealth-building option and you no longer need to have massive capital or a lot of time to get involved.
There are a few online platforms that allow you to invest in real estate, yet none are quite as focused on commercial real estate and non-accredited investors quite like DiversyFund.
So yes, the company and their wealth of real estate experience is legit.