Our Take

DiversyFund pools millions of dollars from investors to buy real estate and other assets. Regardless of accreditation status, investors with as little as $500 can participate in some of these partnerships. However, investors must be willing to wait at least four to six🅠 years before they can expect to sell their shares. Besides the long wait, the fees💜 and risks associated with DiversyFund are substantial. On top of that, several lawsuits are pending against DiversyFund. This, plus the difficulty of communicating with the firm, is important to consider before investing.

Pros & Cons

Pros Explained

• Low investment minimum: Investors can invest as little as $500 with DiversyFund and partake in some partnerships or funds. Other offerings have higher minimum investments.
• Access to institutional-quality real estate: Some of the DiversyFund offerings invest in high-grade properties. If you become an investor, you own a share of those institutional-quality properties.
• Diversified real estate portfolio: Some of the partnerships that focus on real estate acquire a variety of multifamily properties throughout the United States. 澳洲幸运5官方开奖结果体彩网:Diversification in real estate lowers risk.
• Open to accredited and non-accredited investors: 澳洲幸运5官方开奖结果体彩网:Accredited investors can invest regardless of their income or net worth. Non-accredited investors have limits placed on how much they can invest and can’t invest in all DiversyFund offerings.

Cons Explained

• Non-transparent fees: DiversyFund currently has three programs open: Multifamily Fund, DiversyFund Venture Investment, and The Independent. Each program has its own fee schedule. The fees are high and only disclosed within the programs’ offering documents.
• Outsized risks: Some real estate programs 澳洲幸运5官方开奖结果体彩网:buy real estate w🦩ith borrowed funds in addition to the funds they raise from investors. If they are unable to pay the borrowing and operating costs, they may lose the property (and, with it, the investors’ money).
• Investments lack liquidity: Depending on the project, the plan is to hold the assets for four to six years. During that time, investors will not be able to sell or transfer their percentage ownership in the project. Nor does the sponsor promise to make any cash distributions. 
• Cumbersome support: DiversyFund provides email support and promises to respond in two business days. But there is no chat support and phone support was difficult to reach.

Company Overview

DiversyFund pools money from a large number of investors to buy institutional-quality property and make other crowdfunded investments. The company first started operations in late 2016, but the platform only went live in July 2019.

With over 30,000 investors, the platform is available to accredited and non-accredited investors looking to diversify their portfolios with real estate. To get started, investors must disclose whether they are accredited or non-accredited. Once the investor has confirmed their status, they can browse the investment opportunities. DiversyFund offers the Multifamily Fund to accredited and non-accredited investors. However, Venture Investment and The Independent are for accredited investors only. 

It's important to note the experiences of other investors. For instance, Trustpilot gave DiversyFund a poor rating, with an average of 2.2 stars out of 5. There were many complaints. Some comments focused on a lack of responsiveness and failure to live up to promises. Others complained about a lack of liquidity (although that was fully disclosed on the site). Others lamented the inability to communicate with the firm, get statements, or have questions answered.

There are pending lawsuits against DiversyFund as well. Some of these suits allege that DiversyFund made materially misleading statements, inadequately disclosed risk, and breached fiduciary duty.

How Does DiversyFund Work?

DiversyFund created three funds and partnerships that investors can participate in. The investor decides which fund/partnership is ♏most appropriate for their situation and invests.

The first option is the Multifamily Fund. Its goal is to buy apartment buildings in various markets throughout the United States. The strategy is to buy these properties at a discount or where the company can capture appreciation in a strong market. This fund accepts investments from $500 to $1 million. The goal is to purchase 12 to 15 multifamily properties and hold them for four to six years. This fund is organized as an LLC and seeks to raise $75,000,000. The LLC was opened in September 2023 and is still open for investment.

The second option is DiversyFund Venture Investment. This program is for accredited investors only and has a $25,000 minimum investment. The program is a combination investment into both venture capital and real estate, but exactly what that combination looks like goes unexplained.

The last project that is open for investment is The Independent. This fund purchased a 61-unit multifamily property in Sand City, California, near Monterey. The minimum investment is $50,000 and the project is 85% funded.

Key Features

DiversyFund offers an easy way for investors with as little as $500 to own a share in institut💛ional-quality real estate. The firm created three different funds, each with its own investment strategy and qualification requirements. Investors select those option(s) that fit their needs best. DiversyFund acts as the de facto manager of each project and collects fees accordingly.

Some of DiversyFund’s investment pools are available to accredited and non-accredited investors alike. Othe🥃rs are only available to accredited investors.

The Multifamily Fund has a $500 minimum. DiversyFund Venture Investment has a $25,000 minimum, and The Independent has a $50,0𒅌00 minimum.

The website is easy to navigate. Reviews on TrustPilot𓆏 indicated many users found it easy to invest but difficult to communicate with DiversyFund.

Non-accredited investors can only select🍬 the Multifamily Fund with a $500 minimum investment. The Independent investment has a minimum of $50,000, while the Venture Investment Fund has a minimum of $25,000; both are only available to accredited investors. 

The portfolio is curated. since each investor decides which program they want to participate in. All of the programs are structured such that all dividends and interest are reinvested in the respective programs.

Investors from around the world can participate in DiversyFund’s platform, though investors outside the United States may be subjec♚t to withholding tax on distributions.

Fees

DiversyFund charges an annual asset management fee of 2% of the capital raised for each of the programs. While these fees come from the progrꦫam manager, the money comes from the properties’ earnings or from retained capital. That means investors pay this fee. (This is probably one reason why the funds do not pay out divid🐻ends or interest—they need that cash to pay this and other fees.)

DiversyFund also collects an acquisition fee of 1% to 4%, which comes out of the investment pool. Ultimately, that is a cost paid by the investors as well. Additional fees include financing (1%), construction management (7.5%), and guarantee (0.5%), among others.

Transparency

The fees are not disclosed on the site but were found in the offering documentation. Also, the offering documents indicate that DiversyFund may have the right to buy and sell properties to other entities it controls. It’s difficult to know what the meaning of that disclosure is, but 澳洲幸运5官方开奖结果体彩🌳൩网:selling properties to other entities it controls can be troubling.🎃 DiversyFund does not fully disclose how much money has been raised for each program. 

The offering documents specify that DiversyFund reserves the right to borrow money to purchase real estate. They disclose that borrowing adds risk in that if the fund is unable to make its debt payments, the property could be foreclosed on, which could have a negative impact on investors. There is no😼 mention of the pending lawsuits against th🌞e organization on the site.

Liquidity

DiversyFund’s offerings are not liqu🏅id. It fully discloses that there is no secondary market for shares and that the investments are structured to be held for at least four to six years (at a minimum). If you are an accredited investor, you can invest as much as you ಌwant on this platform.

If you are not an accredited investor, your investment limit depends on either your annual income or net worth, whichever is greater. If the higher number is less than $124,000, you can only invest 5% of it. If both are greater than $124,000, then your investment limit is 10%.

There are no redemption options. You must wait for the p💯roperties to be sold. Until that happens, your investment is locked up. The site reports that more than 30,000 people have invested in usinꦗg the platform.

Investment Selection

The Multifamily Real Estate Portfolio and The Independent are set up as limited liability companies (LLCs) under the laws of Delaware. However, the DiversyFund Venture Investment Fund is a 澳洲幸运5官方开奖结果体彩网:private placement.

Sectors and Domains

The Multifamily Real Estate Portfolio and The Independent buy multifamily properties with the goal of adding value or taking advantage of 澳洲幸运5官方开奖结果体彩网:distressed situations. The Independent holds one property that has already been identified and purchased. This pool is 85% funded. Th♊e Multifamily Real Estate Portfolio is still acquiring properties.

The DiversyFund Ventur🔥e Investment Fund seems to be a combination of venture capital and real estꦫate, but how that works is not explained.

Educational Offerings 

Tಞhe educational offerings of DiversyFund are weak. The real estate platform only offers a blog and a news feed. However, these doꦍ not appear to be regularly updated.

The company does provide research on The Independent because that property has been identified. Also, if you sign up to be part of the community, you can see a number of portfolio ꦅproperties with a good amount of information 🧸provided.

Customer Support

If you are considering using the DiversyFund platform, it's essential to look at how its customer support stakes up to other platforms. A good platform will emphasize the importance of customer service and offer several communication options for customers to reach a representative. With DiversyFund, there is email support that promises to respond to you in two business days. But there are no chat or chatbot features. Phone support was difficult to reach; however, if customers have a non-urgent matter to discuss, they can schedule a call with a representative at a later time.

Trustpilot gave DiversyFund a poor rating with an average of 2.2 stars out of 5. There were many complaints. Some comments focused on a lack of responsiveness and failure to live up to promises. Others complained about a lack of liquidity (but that was fully disclosed on the site). Others lamented the inability to communicate with the firm, get statements, or have questions answered.

The Bottom Line

DiversyFund makes it very easy for investors with limited resources to own a share of institutional-quality real estate. One of the projects even allows investors with only $500 to invest. The other real estate deals have a much higher minimum. The venture capital offering is ღnot fully explඣained, so it’s difficult to provide an informed analysis. 

DiversyFund charges high fees and subjects investors to the potential risk involved in leveraged real estate. There were reports of difficulty in 🐻connecting with and getting answers from DiversyFund. Finally, the pending litigation is an additional concern investors should consider before investing.

Publicly traded REITs may offer⛦ similar benefits to investors without many of these drawbacks.

Why You Should Trust Us

Investopedia analyzed 19 real estate crowdfunding companies and scored each based on eight major categories and 38 criteria that are crucial in evaluating the offerings and usability of these platforms. We used this data to review each company for their fees, investment selection, transparency, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best real estate crowdfunding platforms since 2020.

How Does DiversyFund Work?

DiversyFund created three i🔯nvestment pools that are open to ▨investors. Some are open to accredited and non-accredited investors alike. Some are only open to accredited investors. Each program has its own minimum investment.

Two pools buy multifamily real estate in either distressed situations or in markets that are experiencing fast growth. The b🅠usiness plan is to hold assets for four to six years before𝓡 they are sold and profits are distributed.

Does DiversyFund Pay Dividends?

DiversyFund states that it does not make any dividend or capital distributions during the holding period, but in February 2023 it made its first capital distribution in one of the funds it manages.

What Is the Return Rate for DiversyFund?

The site advertises projected returns of up to 15%, but it is impossible to calculate the 澳洲幸运5官方开奖结果体彩网:rate of return on your investment without knowing when it will be sold and at what pric💞e. To date, there is no indication on the website that any property has been sold.

What Is the Minimum Investment for DiversyFund?

The mini🍰mum investment is $500, which is for the Multifamily Fund. The investment fund is available to accredited and non-accredited investors. However, since the investment is not liquid, investors can expect their money to be locked up for about four to six years.

Is DiversyFund Legit?

DiversyFund seems to🔴 operate within the law. It seems to do what it says it going to do: Aggregate money from investors and then buy real estate or other assets on their behalf.

There ꦉis no way to know how skilled the company is in making money for investors because there is no information on the site or in the offering documents indicating 🥂that purchased properties were subsequently sold.

Fees are high, but they are adequately disclosed. Risks are high because the company reserves the right to leverage the properties with debt, but that is also disclosed. In most cases, there are no distributions from operations, probaꦿbly because DiversyFunꦆd needs the money to service the debts and to pay the fees. Again, this is disclosed. Depending on the way the documents are interpreted, the company may reserve the right to buy and sell properties between entities it controls. This is disclosed, but this additional lack of transparency could hurt investors. 

How Wꦑe Review Real Estate Crowdfunding Platforms

To evaluate and review real estate crowdfunding platforms, Investopedia’s team of researchers, data collectors, and industry experts spent nearly two months conducting in-dep♓th industry research, company survey data collection, and hands-on evaluations of 19 companies.🌌 We grouped the 38 criteria that we collected, like investment selection and minimums, holding periods, and curated portfolios, into eight categories. We then scored these criteria and weighted the categories to determine which real estate crowdfunding platforms are best for both accredited and non-accredited investors.

• Fees: 15%
• Account Services: 15%
• Investment Selection: 15%
• Liquidity: 12.5% 
• Transparency: 12.5%
• Sectors and Domains: 12.5%
• Customer Support and Usability: 10%
• Educational Offerings: 7.5%

Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of real estate crowdfunding platforms. Read 澳洲幸运5官方开奖结果体彩网:our full process for more in💯formation on howꦆ we review real estate crowdfunding platforms.