full review

EquityMultiple is an online real estate company that enables accredited investors to invest in professionally managed commercial real estate. Accredited investors can use EquityMultiple's online platform to invest in real estate across markets. EquityMultiple says it has returned $39.2 million to investors and differentiates itself from other real estate investment platforms by offering investments in equity, preferred stock and senior debt.

• Accredited investors looking to diversify into real estate.
• Those who can comfortably invest $5,000 or more.
• Individuals looking to get into commercial real estate.

High investment minimum: The minimum varies by project, but starts at $5,000. A minimum of $10,000 is more common, and additional shares are usually offered at a minimum of $5,000. If you invest through a self-directed IRA and use one of EquityMultiple's preferred IRA partners, the minimum contribution is usually $10,000.

Specialized investments. EquityMultiple offers senior debt, mezzanine debt, preferred equity, common equity, funds, opportunity pools and 1031 exchanges. The company currently also offers an evergreen fund and yield-oriented short-term security products.

EquityMultiple says four of those investments are part of “equity” or various ways of financing real estate investments. The biggest differences between them are mainly related to the level of risk and priority of payment. Senior debt has the lowest level of risk and is repaid first, then mezzanine debt, then preferred equity, and finally equity, which offers no recourse if the borrower defaults but has unlimited potential returns if the investment does well.

Opportunity Zones are areas of land designated by the state and federal government for economic development. You can invest in Opportunity Zones through a tax-advantaged investment called an Opportunity Fund.

1031 exchanges allow real estate investors to use the proceeds from the sale of a real estate investment to defer paying capital gains tax when they buy “like-kind” investment properties.

Note: Many of these types of investments are very complex and should not be taken lightly. It's always a good idea to talk to a financial advisor before adding a new asset to your portfolio.

High returns: target rates of return are quite high and depend on the type of investment.

• Senior debt. A target rate of return of 7% to 13% per annum.
• Preferred equity. 7-12% target current preferred yield and 11-17% target total preferred yield
• Total equity. 6% to 12% target short-term cash flow (annualized) and 14%+ target net IRR

Of course, actual returns will vary and there is no guarantee that your investment will generate any returns at all.

Debt and preferred stock investments typically provide investors with monthly or quarterly distributions, although EquityMultiple emphasizes that each investment will be different and recommends consulting specific investment documents for each investment's distribution schedule.

Investment time frames. Investment tenure varies by asset. EquityMultiple offers a variety of investment structures. Here are the typical waiting periods for each:

• Savings alternatives (short-term notes): retention periods of three, six or nine months.
• Senior debt (fixed yield): Nine months to 24 months.
• Preferred equity (fixed rate of return): 12 to 26 months.
• Common Equity: Three to seven years.
• Opportunity Zones: 10 years or more (to get maximum possible tax benefits).

Keep in mind that these assets are illiquid, so if you think you may need your money before maturity, it may be better to consider other investment options.

Easy-to-use platform – Accredited investors start by creating an account. After receiving a confirmation email, you can register (which includes self-certification that you are, in fact, accredited, although you will not need to provide documentary evidence of this) and immediately begin reviewing investment offers. Signing up for an account does not require a deposit, but if you decide to invest, you can link your funding source online.

Complex (and high) fees. Most of EquityMultiple's investments charge an annual management fee between 0.5% and 1.5%, with most investments at 1%. EquityMultiple says it generally does not make a profit on investors' common stock trades, but it may in some circumstances.

Because each investment listed on the EquityMultiple platform is unique, each investment has its own fee structure. Some may include additional fees, but placement or origination fees are charged to the sponsor, not the investor. To find out exactly how much you will pay for each investment, please read the special disclosure and registration statements. If you do not understand the fee information, please contact an EquityMultiple representative.

Newer Investment Platform – Like many of its real estate crowdfunding competitors, EquityMultiple is a newer company. Since the company was founded in 2015, it has had little time to set the record straight. The company itself carefully reminds investors that every investment involves risk and that investors should carefully review the documentation of each particular investment before investing.

Compare the best real estate crowdfunding platforms before you invest

If you are interested in allocating a small portion of your overall portfolio to real estate and can do so alongside EquityMultiple's investment minimums, you may consider the platform a good option.

However, it's important to note that EquityMultiple investments are illiquid, meaning you may not be able to get your investment back immediately or, in some cases, for several years. Investing in real estate this way is a long-term game, and if you're not willing to wait, you can consider more liquid assets like publicly traded REITs.

» Interested in other options? Check out our guide on how to invest in real estate

NerdWallet's comprehensive review process evaluates and ranks companies that allow US customers to invest in real estate, primarily through non-traded REITs or private equity. Our goal is to provide independent vendor evaluations to help you arm yourself with the information to make sound, informed judgments about which will best meet your needs. We follow strict editorial integrity guidelines.

We collect data directly from vendors through detailed questionnaires and conduct first-hand testing and observation through vendor demonstrations. Questionnaire responses, combined with demos, vendor staff interviews and hands-on research by our professionals, feed into our proprietary evaluation process, which evaluates each vendor's performance based on more than 20 factors. The final result provides star ratings ranging from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half star.

pros and  cons

pros

• Access to commercial real estate investments.
• User friendly website.
• Potentially high return rates.

cons

• Open to accredited investors only.
• High minimum investment.
• Complex fee structure that varies by investment.

The bottom line: