What Is Real Estate Crowdfunding?

Real estate crowdfunding is buying a small share of a property, a pool of properties, or a property loan through a website that collects money from many investors. What you buy is a security, such as a fund share, a stake in the company that owns one building, or a note tied to one loan, so federal securities rules set who can buy and how much. Some offerings open to anyone start at $10, but most tie up your money for years: Arrived plans to hold each rental house it sells shares in for five to seven years.

How the platform, sponsor, and investor fit together

Every offering has three parties:

• The platform is the website that lists offerings, collects your money, and keeps your account records. Some platforms, such as the CrowdStreet Marketplace, list deals put together by outside real estate companies. Others sell their own funds: the funds sold on Fundrise are sponsored by Rise Companies and managed by its subsidiary, Fundrise Advisors.
• The sponsor is the real estate company that finds the property or loan, arranges the financing, carries out the plan, and decides when to sell. In a fund, the fund's manager plays this role.
• You, the investor, receive the share of income and sale proceeds that the offering documents set out. The sponsor or fund manager, not you, runs the property.

Because these are securities, each offering must be registered with the SEC or fit an exemption from registration. Real estate platforms use four routes:

• Private placements under SEC Rule 506(c): sold without registration and allowed to advertise, but only accredited investors (defined below) can buy, and the seller must verify their status. There is no limit on the amount raised.
• Regulation A, Tier 2: open to anyone. A company can raise up to $75 million in 12 months after SEC staff review its offering circular, the disclosure document. That review, called qualification, is not SEC approval of the investment.
• Regulation Crowdfunding (Reg CF): open to anyone, up to $5 million raised in 12 months, sold only through a funding portal or broker-dealer registered with the SEC.
• SEC-registered funds: the Fundrise Real Estate Interval Fund, for example, is registered under the Investment Company Act of 1940 and sells shares continuously at net asset value (NAV), the fund's assets minus its debts per share, with no sales charge.

What you can buy

A pooled fund or a single property

A pooled fund owns many properties or loans, and its manager picks them. The Fundrise Real Estate Interval Fund had $1.22 billion in net assets at the end of 2025, and its prospectus says it focuses mainly on single-family homes built or bought to rent, apartment buildings, and industrial property.

A single-property offering ties your money to one building or house that you choose. Arrived sells shares in individual rental houses, and each house sits in its own series, a separate unit of the company with its own income, costs, and fees. Your result then depends on one property and one sponsor.

Debt or equity

With debt, your money funds a loan and you earn interest at a set rate. Groundfloor sells notes in $10 units, each tied to one loan to a developer who is buying, renovating, or building a residential or small commercial project. Its loans typically run six months to five years, and Groundfloor pays you only from what that borrower actually repays.

With equity, you own part of the company that owns the property. You share in rental income and in any gain when it sells, but lenders are paid first. Preferred equity sits in between: it is paid after the lenders and before the common owners. The comparison of equity and debt investments shows who gets paid first when a deal goes wrong.

Property types and business plans

The commercial real estate on these platforms includes apartment buildings, warehouses and other industrial buildings, offices, retail centers, and single-family homes owned as rentals. Business plans are commonly labeled with one of three styles:

• Core: a stable, well-leased building bought mainly for its rent, with little borrowing.
• Value-add: a property bought to renovate, re-lease, or reposition so that its income and value rise.
• Opportunistic: new construction, a building with much of its space still to lease, heavy borrowing, or a mix of these. Most of the return has to come from a rise in the property's value, and returns can vary widely.

Who can invest

Accredited investor status decides which routes are open to you. An individual qualifies with income above $200,000 in each of the past two years ($300,000 with a spouse or spousal equivalent) and the same expected this year, a net worth above $1 million not counting a primary home, or a Series 7, 65, or 82 securities license in good standing.

• Accredited investors can buy Rule 506(c) private placements as well as everything open to the public.
• Non-accredited investors can buy Regulation A offerings, Reg CF offerings, and SEC-registered funds. In a Regulation A Tier 2 offering whose shares will not trade on a stock exchange, your total purchases in that offering are capped at 10% of the greater of your annual income or net worth, with your home left out of net worth. Reg CF caps your total across all Reg CF offerings in any 12 months at $2,500 to $124,000, depending on income and net worth.

The accredited and non-accredited options page shows how sellers verify status and how to work out both caps.

Returns, fees, risk, and liquidity in brief

Returns vary widely and can be negative. The Fundrise Real Estate Interval Fund returned 29.35% in 2021, -1.96% in 2022, -11.79% in 2023, 7.50% in 2024, and 1.33% in 2025. Those figures are after fund expenses but before Fundrise's separate 0.15% yearly advisory fee. See realistic return ranges by deal type.

Fees come out of the fund or the deal before you are paid. The Fundrise interval fund lists total annual operating expenses of 1.78% of net assets, including a 0.85% management fee; with the advisory fee, the yearly cost is 1.93%. That figure leaves out operating costs and borrowing inside the property ventures the fund owns, which shareholders also bear. Each Arrived house pays its manager a one-time sourcing fee of 3.5% and a yearly asset management fee of 0.6%, both based on the purchase price. When the house sells, it is charged 6% to 7% of the sale price for selling costs, and the manager keeps any part not spent.

Risk includes losing part or all of your money. In February 2025, the head of a commercial real estate firm pleaded guilty to wire fraud after diverting about $62.8 million that investors put into two of his offerings on the CrowdStreet Marketplace. RealtyMogul Income REIT, a real estate investment trust (REIT) whose shares do not trade on an exchange, stopped accepting new money in July 2025 and suspended its share buybacks in April 2026. Its estimated value per share fell from $8.26 in early 2025 to $6.79 at June 30, 2026. The risks and downsides page covers each risk and what limits it.

Liquidity is limited. Reg CF securities generally cannot be resold for one year. Private placements are restricted securities, which can be resold only under limited conditions, and the SEC warns that you may need to hold them indefinitely. Regulation A shares have no federal resale limit, but there is often no market, so you may have to find a buyer yourself. The Fundrise interval fund must offer each quarter to buy back 5% to 25% of its shares and expects to offer only 5%; when more shareholders ask to sell, each request is filled in part. Arrived returns your money when it sells the house, and before then, once you meet its holding conditions, you can try to sell shares to other investors during its trading windows, with no assured buyer. Compare how long money stays tied up by offering type.

How to make a first investment

1. Use money you can leave in place for the full planned hold and could afford to lose. The SEC warns that private placement buyers may have to hold indefinitely and should be able to bear a total loss.
2. Confirm your status and caps. If you are not accredited, work out your Regulation A and Reg CF limits before you choose a platform.
3. Choose a structure. Pick a fund or a single property, and debt for set interest or equity for a share of any gain.
4. Compare platforms. Minimums, fees, and exit terms differ by platform; the platform comparison sets them side by side.
5. Read the offering document and check the filing. Search the SEC's EDGAR database for a Regulation A offering statement (Form 1-A) or a private placement's notice (Form D). A Form D is not SEC approval. For a Reg CF offering, confirm that the funding portal is registered with the SEC and is a member of FINRA, the Financial Industry Regulatory Authority. In the document, find the fees, the business plan, the debt on the property, and when and how you can get money out.
6. Spread your money. Several smaller positions limit the damage from one failure. Groundfloor's offering circular warns that failing to diversify raises the risk of losing your entire investment to one borrower's default.
7. Read the reports. Regulation A Tier 2 companies file annual, semiannual, and current reports on EDGAR, and Reg CF companies file an annual report. A sponsor selling only to accredited investors decides what it discloses, so check the reporting terms before you buy.