Do you want to know how to invest like the Top 1%?
Invest in commercial real estate.
Investment returns in commercial real estate have outperformed the stock market, and by a wide margin.
You can invest in commercial real estate with as little as $500, investing in a real estate investment trust (REIT) offered by DiversyFund.
The REIT has an impressive history of returns, comes with no fees, and does not require accredited investor status.
If you’ve been interested in investing in real estate crowdfunding, DiversyFund should be on your short list of choices. The fund invests primarily in one of the safest types of commercial real estate there is, multifamily apartment buildings.
If nothing else, you may want to invest a small percentage of your investment portfolio in DiversyFund as a way to add a diversification into commercial real estate.
Let’s take a look in this DiversyFund review.
- Invest in real estate with just $500.
- Higher returns than stocks.
- 7% preferred return to investors before sponsor receives profit split.
- Invest in "hard assets".
What is DiversyFund?
Based in San Diego, California, and launched in 2016, DiversyFund provides investors with the ability to diversify at least some of their holdings into commercial real estate, which is one of the very best investments available, and well known to the wealthiest 1% of individuals in America.
DiversyFund is different from most other real estate crowdfunding platforms, in that their REIT actually owns the properties held in the trust. They buy, manage – and when necessary – sell properties in the trust. Because of this direct involvement, DiversyFund is able to make the REIT available to investors free of any investment fees.
Why Invest with DiversyFund?
For starters, there is no accredited investor requirement, and you can get started with as little as $500. That means the DiversyFund REIT is open to all investors, including small ones. There is no requirement that restricts investing only to those who have either high income, high net worth, or both.
Annual return on your investment may be the most compelling reason to invest with DiversyFund. The average annual return of over 17% is much higher than what you can get on stocks and virtually every other type of traditional investment.
Equally important however is the quality of what you’ll be investing in. DiversyFund invests in commercial real estate, but it focuses primarily on multifamily apartment complexes.
This is important because apartment houses have traditionally been one of the best-performing and most reliable sectors of the real estate market. After all, everyone needs a place to live. And even during recessions, the apartment market often strengthens, as fewer people are able to afford homeownership, and must turn to renting.
Diversification is another major advantage. Investing in a single apartment complex will come with risks. But when you invest with DiversyFund, you’ll be investing in a portfolio of apartment buildings. With the risk spread across several properties, the risk of loss from any single property is minimized.
Historically, real estate has been one of the best ways to build wealth. And commercial real estate, particularly apartment buildings, have been on the forefront of this trend.
How DiversyFund Works
As already described, DiversyFund invests in apartment buildings. But they use a specific methodology with those investments that includes the following steps:
- Acquisition – The fund buys multifamily apartment buildings that are already generating revenue from rents, but are in need of improvements.
- Renovations – To increase the cash flow, each building is renovated within one year of purchase. The renovations are what enable the fund to increase rents, as well as to raise the value of the property.
- Holding period – The individual investments are held for five years, to allow them to appreciate in value even more.
At least part of the rent income and other cash flow on each building is paid to investors in the form of disbursements to the fund.
Investors are protected by a 7% preferred return before DiversyFund receives any profit split.
After the 7% preferred return, there is a 35/65 profit share between DiversyFund and the investors.
Once the investors have made 12% per year, then the profit split hits 50/50.
After five years, the property will be sold and the profits split. The gain on sale will be a combination of the increase in property value from the renovations performed on the property in the first year of ownership, as well as appreciation accumulated during the five-year holding period.
As an investor in the REIT, you also own a portion of each property held in the fund. DiversyFund acts as an investment partner, rather than as a broker. Not only does that mean no investment fees, but it also means the fund doesn’t make any money unless you do.
DiversyFund Features and Benefits
Minimum Investment: $500.
Availability: All 50 states. Must be a US citizen or resident, with a valid Social Security number. The platform is currently unavailable to foreign residents.
Available Accounts: Individual and joint investment accounts, trusts, and certain entity accounts. Also available for retirement accounts, using a self-directed IRA.
Accredited Investor status: Not required.
Weekly Newsletter: Provides you with information and insights on the economy and the markets on a weekly basis.
Investor Dashboard. As an investor, you’ll be able to monitor your investments on the DiversyFund dashboard. You’ll be able to track the value of your investment and receive quarterly investment reports.
Investor Contact. Available by both email and live chat during regular business hours.
The DiversyFund Growth REIT
This fund is the core investment offering by DiversyFund. It’s an SEC qualified real estate investment trust focused on investing in cash flow apartment buildings. The fund has a minimum investment of $500 and has no management fees. It’s a private REIT, which is to say it isn’t listed on any public exchanges.
The fund is an opportunity to invest in commercial real estate – apartment buildings in particular – without getting involved in the day-to-day details of managing the properties. Instead, you’ll be holding an investment in tangible assets with the ease and simplicity of typical paper investments.
When you buy into the REIT you’ll purchase shares at $10 each. The minimum investment of $500 will enable you to buy 50 shares.
Your investment is considered to be preferred equity, which gives you the benefit of both dividend distributions as well as participation in capital appreciation on the sale of the properties in the fund.
As an SEC qualified REIT, the fund is subject to an annual SEC audit.
The Advantages of a REIT Investment
As a REIT, DiversyFund Growth REIT has all the benefits that come with investing in a REIT. Those benefits include the following:
- REITs have provided higher returns than the S&P 500 in recent decades.
- REITs are legally required to distribute at least 90% of their taxable income to shareholders in the form of dividends.
- Returns on REITs have certain tax benefits. Since real estate investing requires holding buildings, at least some of the income generated is offset by depreciation expense, which is a paper expense.
- REITs act as a mutual fund for real estate, holding several properties in the fund. This provides a level of diversification in a the fund that is not possible with ownership in a single property.
- Commercial real estate is a diversification away from a portfolio comprised entirely of paper investments. REITs are invested in physical properties that may perform well when paper assets are failing.
- Real estate is hedge against inflation. While stocks may fall as inflation accelerates, real estate is likely to rise in value.
- Like mutual funds, REITs are a passive investment. You don’t need to be involved in the management of the properties in the fund.
DiversyFund Series A Round
This is not another REIT offered by DiversyFund, but a direct investment in the company itself.
It’s an initial public offering (IPO), and an opportunity to become a co-owner of their upcoming Real Estate FinTech Platform. The company has plans to dominate the fintech space, by becoming the “go-to” platform for everyday investors to access alternative investments.
This investment is not for the average investor, since it requires accredited investor status, as well as a minimum investment of $25,000. The IPO timeline is two to four years and is seeking a 10X return on investment on a minimum two-year investment.
This is of course a highly speculative investment, suitable to the most sophisticated investors, which is why it has an accredited investor requirement.
How to Invest with DiversyFund
You can sign up for DiversyFund free of charge.
You must be at least 18 years of age, and as noted earlier, you must also be either a US citizen or a US resident with a valid Social Security number.
The account opening process will take place entirely online.
You can sign up using either Facebook or Linked In, by applying online. If you apply online, you’ll need to provide your name, phone number, and email address. You’ll then be required to create and confirm a password. You’ll then click “Create Account”, and you’ll be ready to invest.
DiversyFund Pros and Cons
Should You Invest with DiversyFund?
Most investors know the value of diversification. But many limit themselves to a standard mix of stocks and bonds.
Adding alternative investments – like real estate – gives an even higher level of diversification in your portfolio. It avoids having 100% of your portfolio allocated to financial assets alone.
DiversyFund is an excellent way to diversify into one of the most lucrative sectors of the real estate market, which is commercial real estate. It’s a common investment held by the wealthiest people in America and around the world.
But DiversyFund has another advantage in that it concentrates investments in multifamily apartment buildings. This is one of the very best ways to invest in commercial real estate, because it tends to be more resistant to recessions and declines in the financial markets.
In addition, multifamily properties generate both an ongoing cash flow from rents, as well as long-term capital gains.
DiversyFund is a good way to add real estate to your portfolio. And since it’s a real estate investment trust, you can handle it the same way you will any other type of financial asset.
Unlike owning real estate outright, you don’t need to buy property, find tenants, collect rents, pay building expenses, or evict tenants. You make your investment, and collect your regular dividend income. When a property is sold, you’ll also get the benefit of the appreciation on that property.
Since commercial real estate is something of an unknown to most investors, the best strategy will be to invest only a small percentage of your portfolio in this kind of REIT. For example, a 10% position will give you the benefit of a commercial real estate investment, without putting you in a position to lose a large amount of your portfolio if the investment goes against you.
If you’d like more information, or you’d like to invest in the REIT, click on the link below to get more information or to get started.