EquityMultiple Review 2022
 | By: Jeremy Biberdorf | May 10, 2022 |
In A Nutshell: EquityMultiple blends crowdfunding with a more traditional real estate investing approach that can lead to high returns.
EquityMultiple’s technology platform allows you to choose between pooled investment, individual commercial property investment, or investment in notes, all for as little $5,000.
| Fees | Account Minimum | Promotion |
|---|---|---|
| Between .5% and 1.5%, depending on the investment type | $5,000 for notes, $10,000 for direct investment, $20,000 for pools | None at this time |
Pros & Cons
Pros
- Low correlation to stocks & bonds
- Attractive historical risk-adjusted returns
- Multiple styles of investment
Cons
- Higher cost on pooled investments
- Accredited investors only
- Does not offer the liquidity of a conventional REIT
Full EquityMultiple Review
EquityMultiple uses crowdfunding to offer accredited investors an opportunity to invest in a pool of properties (like a REIT), individual commercial properties, or real estate notes.
Equity Multiple is great for:
- Investors who want a single platform for multiple investments
- Those seeking diversification
- Flexibility of investment
- Low cost-of-entry for higher-yielding investments
EquityMultiple At A Glance
| Fees | Between .5% and 1.5%, depending on the investment type |
| Minimum Balance | N/A |
| Minimum Investment | $5,000 for notes, $10,000 for direct investment, $20,000 for pools Account Fees: Between $30 – $70 per year |
| Investment Options | Fund Investment (multiple assets with debt, equity, and CRE Securities), Direct Investment (single asset), Short Term Notes (3-9 months per note) |
| Redemption Options | Fund Investment has a target duration of 1.5 to 10 years; Direct Investing is 6 months to 5 years; Notes are 3 – 9 months |
| Redemption Options | Fund Investment has a target duration of 1.5 to 10 years; Direct Investing is 6 months to 5 years; Notes are 3 – 9 months |
| Customer Support | (646) 978-9592, available from 9am to 6pm EST. Support: help@equitymultiple.com |
| Transparency | All disclosures are available for download from the EquityMultiple website |
What Is EquityMultiple?
EquityMultiple tries to “level the playing field for individual investors” by offering multiple investment opportunities through a single platform. These opportunities include investment in a pool of commercial properties, co-investment in individual properties, or investment in short-term notes secured by real property.
The crowdfunding aspect of their offering comes from the opportunity to invest in professionally-managed commercial real estate for as little as $10,000.
EquityMultiple also provides a way to diversify your portfolio in a “one-stop shop.” Investors can choose from multiple pools or varied individual properties for investment. Each offering is structured either as debt, preferred equity, or common equity.
Click for EquityMultiple pricing and details.
How EquityMultiple Started
EquityMultiple is the brainchild of Charles Clinton and Marious Sjulsen, who have over 30 years in CRE investments for both institutional investment firms and private investment consultants.
Clinton & Sjulsen started EquityMultiple to provide more choices in commercial RE investment than what could be found in REITs.
EquityMultiple Investment Options
EquityMultiple provides three different core investment options: Fund Investing, Direct Investing, and Savings Alternative.
Fund investing is the closest thing to a traditional REIT. The fund consists of multiple assets with built-in diversity. The strategies include Debt, Equity, Opportunity Funds, and CRE Securities.
Direct Investing is like it sounds: direct, fractional investment in a single commercial property. EquityMultiple offers the opportunity, and once enough individual investors have contributed, the investment begins. Each offering has different projected returns and exit strategies.
“Saving Alternative” is another name for investing in notes. Capital is pooled and used to fund short-term notes secured by real estate assets. These notes provide passive interest income.
EquityMultiple Pricing
The minimum investment is $5,000 for notes (“Saving Alternative”), $10,000 for Direct Investment, and $20,000 for Fund Investment.
EquityMultiple Portfolios
EquityMultiple’s website provides a listing of both previous investments and current offerings. Some past offerings include luxury condos in Brooklyn, Class-A multifamily in Houston, and even campsites and storage facilities.
Access to current offerings is available by signing up on EquityMultiple’s website.
EquityMultiple Performance
EquityMultiple has a historic annual rate of return of 17.4%. This return is an average across all its offerings – Funds, Direct, and Savings Alternative (notes).
EquityMultiple also provides the following graph to demonstrate distribution to investors over the past 6 years:
Strengths, Weaknesses, and Exciting Possibilities
EquityMultiple is a commercial real estate investment firm that provides accredited investors a technology platform that allows access to private real estate opportunities that are professionally managed. This includes investment across a variety of property types and risk profiles.
We like the idea of a “one-stop shop” to provide diversity in commercial real estate investment. Their platform also allows self-directed investors more transparency than most traditional REITs. All of this for as little as $10,000 for property investment, or $5,000 for note investment.
EquityMultiple has an in-house underwriting team that provides extensive research, which in turn leads to a seamless investing process. Though we wish the platform wasn’t exclusively for accredited investors, it does allow these investors to participate in real estate funds and direct real estate transactions alongside experienced sponsors and lenders.
The downside we see is liquidity. Shares in conventional REITs can be bought and sold on the open market in many cases, whereas most investments with EquityMultiple are not as liquid. Though the notes are somewhat of an exception, but only in the respect that investment is very short-term.
EquityMultiple FAQs
Check the EquityMultiple website for a comprehensive list of FAQs
Do you need to be an accredited investor to participate with EquityMultiple?
Yes. This is not a large barrier to entry, however, and once you demonstrate accreditation, the initial investment is quite low compared to REITs and other CRE opportunities.
How does EquityMultiple compare to other “crowdfunding” investment platforms?
EquityMultiple is one of the few platforms that offers equity, preferred equity, and senior debt investments all in one platform. This allows investors to select the type(s) of assets that fit their investment goals.
Is EquityMultiple A Good Investment?
We say yes. Although past performance is no indicator of future earrings, 17.4% is a great historical return. On top of that, EquityMultiple allows you to get immediate diversification through one platform, which cuts down on the amount of time you have to spend on research.
Final Thoughts
EquityMultiple strikes us as the type of investment platform that would inevitably be created one way or another. It’s a simplified way to get into commercial real estate investment, create a diversified portfolio, and leverage the power of crowdfunding all in one.
It’s also the kind of investment platform that a beginner RE investor can “grow into.” Investments are laid out in a simple, easy-to-understand way, with all the heavy lifting of due diligence having already been done.
It’s a little unfortunate that the investments aren’t very liquid. That said, liquidity isn’t one of the big draws of real estate – it’s the returns. You can find greater liquidity in REITs (including the crowdfunded REITs), but you also run the risk of having your investment be more closely tied to stock and bond market fluctuations in a conventional REIT.
Perhaps best of all, EquityMultiple is a great way to start investing in commercial real estate through your self-directed IRA. With as little as $35,000, you can diversify your investment across three separate real estate opportunities, without having to fill out three separate investment packets across three separate companies.
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