EquityMultiple Review: Unlocking Real Estate Crowdfunding Potential

Want to be a real estate entrepreneur but don’t enjoy the thought of actively managing real estate assets?

EquityMultiple is the solution you need. They handle the heavy lifting, freeing you up for other pursuits.

You’ll have enough time to invest and handle other essential tasks while their expert teams earn you healthy returns and build a portfolio of top-notch investments.

However, it’s important to note that EquityMultiple only works with accredited investors. If you are one of the many accredited investors out there, this comprehensive EquityMultiple review will help you decide if their services are worthwhile. That said, here's everything you'll need to make an informed decision:

• What Is EquityMultiple?
• How Does EquityMultiple Work?
• Exclusive Features Of EquityMultiple
• What Makes EquityMultiple Different?
• EquityMultiple Pros & Cons
• EquityMultiple Alternatives
• Financial Commitments: Understanding EquityMultiple's Fees
• EquityMultiple FAQs
• EquityMultiple Review: Final Thoughts

*Before we begin our review on EquityMultiple, we invite you to view our video on How To Get Into Real Estate With No Money! Host and CEO of Real Estate Skills, Alex Martinez, provides the perfect guide for beginners to invest in real estate using no capital of their own!

What Is EquityMultiple?

EquityMultiple is a New York-based real estate investment platform committed to helping accredited investors build wealth passively through professionally managed investments.

The company, established in 2015, specializes in commercial real estate.

It combines technology, crowdfunding, and traditional real estate to offer investors seamless access to a wide range of short and long-term investments, including investment notes, senior debt, and growth-focused real estate funds.

Furthermore, EquityMultiple partners with a nationwide network of real estate firms, including Marcus & Millichap, a leading brokerage in North America; this allows it to offer investors investments in different markets, assets, and return profiles.

Since opening its doors, the company has paid over $4 billion to investors from commercial real estate earnings across 167 markets. It has also amassed a base of over 48,000 investors and is among the most sought-after managed real estate investing companies. But does it live up to the hype? The rest of this EquityMultiple review is to help you discern its viability for yourself.

How Does EquityMultiple Work?

EquityMultiple provides accredited investors with a variety of passive investing opportunities. It divides these opportunities into three asset classes: Keep, Earn, and Grow, but they generally include:

Short-Term Cash Management

EquityMultiple’s short-term cash management products cater to real estate investors wishing to make profits without sacrificing liquidity.

While many real estate crowdfunding platforms typically offer bonds and money-market funds for short-term cash management, EquityMultiple took a unique approach and offered Alpine Notes. These notes resemble promissory notes but have the company’s unique branding.

They fall under the “Keep” category, which is pretty befitting, as they’re essentially aimed at helping investors preserve capital and maintain liquidity. They feature three duration options: three, six, and nine months, each with a fixed annual percentage yield rate plus a minimum investment of $1k—$5k.

Notably, due to the rising inflation rates, the company raised the rates on all notes in 2022 to ensure investors enjoy healthy returns. Consequently, the short-term notes now feature the following interest rates:

• The 3-Month Alpine Note: 6.00% annual percentage yield (APY)
• The 6-Month Alpine Note: 7.05% APY
• The 9-Month Alpine Note: 7.40% APY

The interest rate on Alpine Notes compounds monthly. According to our website research during the EquityMultiple review, this increases investor target returns by approximately 20 bps. It also eliminates the need for tax filing on the first year of investment. Moreover, investors can roll over their principal amount into the next series of notes upon their Alpine Note’s maturity to capitalize on continued compounding interest.

EquityMultiple also introduced an early redemption option for all Alpine Notes. It allows investors to redeem them early and reinvest them in another EquityMultiple investment product without penalty. So, if you want to partake in a commercial real estate project the company just introduced, you can redeem the note without impacting your principal amount.

Moreover, EquityMultiple charges no fees on its Alpine Notes, further protecting investors' returns. But that’s not all. The company offers Alpine Note investors first-loss protection, ensuring that in the event of losses, their principal and interest rate amounts are paid out first before EquityMultiple attempts to recoup losses. Should you want to back out, the company allows users to redeem the note after 30 days.

In a nutshell, EquityMultiple’s Alpine Notes allow you to keep your money while earning from it. EquityMultiple, on the other hand, uses the funds it generates through these notes to pre-fund its commercial real estate investments.

Long-Term Real Estate Investments

If you prefer long-term investing, opportunities in EqualMultiple’s Grow category would be a great fit.

For this category, the company typically uses the money raised through its line of credit (partially generated through Alpine Notes) to purchase commercial properties with excellent appreciation potential. It then offers them up as private equity investments.

Common property types in this investment category include multifamily homes, hotels, industrial storage, and real estate portfolios carefully curated and managed by EquityMultiple investment experts. The company acquires these properties at discounted rates, offering investors attractive returns. You must create and log in to an EquityMultiple account to access return data for these investments, as it varies between properties.

You also need a minimum of $10,000 to participate in any investment in this category. Additionally, it could take a few years to realize returns, typically 3-7 years. We recommend conducting thorough research before you invest in this category, as your profitability will depend on how well the property performs.

Exclusive Features Of EquityMultiple

Here are noteworthy features of the platform our EquityMultiple review has revealed:

• Only Available To Accredited Investors: EquityMultiple exclusively works with accredited investors; this refers to individuals or couples with a net worth exceeding $1 million, not counting the value of their primary residence. An accredited investor can also be someone who, for the past two years, has had and expects to maintain an annual income of $200,000+ (or $300,000 with a spouse), someone who has had and expects to maintain a yearly income of $200,000+ (or $300,000 with a spouse) for the past two years. Individuals in certain professions might also qualify as accredited investors.
• High Investment Minimums: Although the required minimums vary across investment offerings, EquityMultiple generally requires an investor to commit at least $10,000 to $30,000. However, if you’d like to test the waters first, EquityMultiple’s Alpine Notes are a great start. They require a minimum investment of $1K-$5K.
• Specialized Investments: While most REI crowdfunding platforms offer REITs, EquityMultiple takes a unique passive investing approach by providing specialized investment products. These include offerings like the Ascent Income Fund, which features investment options like senior debt, preferred equity, and yield-focused real estate funds. The Ascent Income Fund targets first-mortgage loans, providing investors with assets that hold payment priority. EquityMultiple also offers Alpine Notes, which are suitable for first-time investors or those needing liquidity. These notes require a minimum of $1,000. They have a maximum maturity period of nine months; investors can redeem them as early as 30 days.
• High Returns: Just like the minimums required, investing with EquityMultiple offers investors attractive returns. The company targets significant returns across different products and is transparent. For senior debt investments, returns range from 8-12%, while for preferred equity, the company aims for return rates between 10 and 14%. The yield-focused real estate funds generate 7.4% annually. EquityMultiple distributes these returns monthly and quarterly, ensuring its investors remain liquid. Nonetheless, please note that returns and distribution terms vary across investment programs. For instance, some of the company’s long-term investments tie returns for five to six years. Carefully review EquityMultiple terms for your preferred investment product before you commit.
• Easy-To-Use Platform: EquityMultiple reviews reveal a tech-driven crowdfunding platform, and after reviewing its website, it’s safe to say it lives up to the hype. The dashboard is user-friendly thanks to clear visuals and well-displayed metrics like the Internal Rate of Returns, which allow investors to monitor investments effortlessly. Signing up is also a breeze; new investors simply create an account and complete a quick email confirmation. Next, they need to confirm their accreditation status to view investment offerings. This step is equally straightforward, as no document verification is required. Furthermore, you don’t need to deposit money to create an account. Money is only required when you decide to invest in any of the offerings. The EquityMultiple platform allows users to link their funding source online, enhancing the seamless user experience.
• Complex Fees: Wondering how much it’ll cost to invest with EquityMultiple? For equity investments, annual management fees range from 0.5% to 1.5%, while for investments in the Ascent Income Fund, such as senior debt, EquityMultiple requires a 1% asset management fee. Annual admin expenses may range between $30 and $70 for filing tax documents. Some offerings may also include origination fees or placement fees. Do due diligence to determine the exact costs of the investment product you’re interested in before you commit. However, it’s worth noting that EquityMultiple generally offers competitive fees compared to most crowdfunding platforms in real estate. In fact, some of its products, like the Alpine Notes, have no management fees.
• New Platform: EquityMultiple entered the real estate crowdfunding landscape in September 2015, making it a relatively recent establishment. Despite its brief history, the company has had an impressive track record, paying over $4 billion in investment returns. Still, the company’s marketing team reminds current and prospective investors to perform a thorough risk tolerance analysis before investing, as every investment product has risks.

• Strong Customer Support: EquityMultiple is incredibly committed to its investor base. In addition to providing a variety of investments, the company has a dedicated investor relations team on standby to ensure investors get all the support they need. The team is accessible through various channels, including a chat inbox on the website, email at [email protected], and phone at 646-916-4314. Moreover, users can schedule a call for non-urgent issues. Additionally, EquityMultiple provides extensive user resources such as blogs, a podcast, and even a FAQs section to ensure investors have access to the information they need.

What Makes EquityMultiple Different?

While digging into our EquityMultiple review, we learned the company works exclusively with accredited investors. While the platform’s exclusivity might seem discriminatory, it’s why the company excels. This strategic decision allows the company to consistently generate the funding necessary to pursue high-quality real estate projects and investment opportunities.

Tapping into a niche of investors with greater capital access also enables the company to withstand market fluctuations and remain operational despite challenging economic conditions.

Moreover, accredited investors typically demonstrate a higher level of commitment to their investments; this reduces the likelihood of sudden withdrawals or disinvestments, enhancing the company’s overall stability.

Beyond its exclusivity, EquityMultiple stands out for the extra mile it takes to select its commercial property investments. Before adding a property to its portfolio, the company conducts a market analysis to assess the risk and profitability of that particular market. It also conducts a property valuation and even evaluates the deal sponsor. Consequently, it only accepts 5% of all proposed deals. As a result, the EquityMultiple platform offers a selection of highly profitable, risk-tolerant commercial investment properties from investors that yield truly decent returns.

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EquityMultiple Pros & Cons

Every real estate investing option has pros and cons, and EquityMultiple is no exception. Understanding both ends will help you determine whether the investment is worth your while. Read on for a quick overview of EquityMultiple’s pros and cons.

Pros Of EquityMultiple For Real Estate Investors

Here are some of the perks you’ll enjoy when you opt for EquityMultiple’s real estate investments:

• Diversify Into Commercial Real Estate: EquityMultiple reviews highlight a mix of short and long-term commercial real estate investments, allowing portfolio diversification. Investors can build a short- and long-term investment portfolio to enhance their risk tolerance and objectives.
• User-Friendly Platform: The EquityMultiple platform is highly intuitive and easy to navigate, even for a non-tech-savvy investor.
• Potential For High Returns: EquityMultiple’s investments offer pretty impressive returns. For instance, the Ascent income fund products boast an IRR of 13.1%. Preferred equity investments potentially generate 10% and 15% returns, while Alpine Notes consistently yield 6%.
• Liquidity: EquityMultiple distributes monthly and quarterly returns, enabling investors to maintain liquidity while enjoying healthy profits.
• Wide Selection Of Investments: From Alpine Notes, senior debt, and preferred equity to yield-focused real estate funds and individual commercial properties, EquityMultiple investments span different categories, allowing investors to find what works best.
• Transparency: Based on our EquityMultiple review, the company is among the most transparent we’ve encountered. They display the terms and conditions of each investment product and even publicly discuss returns information. Despite its impressive track record, EquityMultiple even reminds potential investors that each investment carries risks, ensuring that anyone who decides to invest knows what they’re signing up for.

• Learning Opportunities: EquityMultiple offers an informative blog section covering various aspects of real estate investing and tips on maximizing returns through its offerings. Furthermore, the company also provides podcasts, market insights, and live training to help interested investors arm themselves with the knowledge they need for profitable investing.

Cons Of EquityMultiple For Real Estate Investors

Here are some downsides, according to EquityMultiple reviews:

• Only Available To Accredited Investors: EquityMultiple only works with investors worth over $1 million. You can only leverage their offer if you have achieved accredited status.
• Complex Fee Structure: Although it claims to charge 0.5%-1% on most of its investments, specific fees and costs vary across investment programs.
• Only Invests In Commercial Real Estate: If you specialize in residential real estate, EquityMultiple investments aren’t suitable for you as the company only offers commercial REI.
• No Mobile App: Despite its widespread use, EquityMultiple has no mobile app, meaning no on-the-go portfolio management convenience

EquityMultiple Alternatives

While EquityMultiple undoubtedly offers amazing commercial equity deals, it’s not the only company that does that. Here are some of its top competitors and how they compare to the New York-based commercial REI provider:

• RealtyMogul: Like EquityMultiple, RealtyMogul offers commercial real estate investments. However, there’s a significant difference in their offerings. RealtyMogul offers common investment products like REITs, while EquityMultiple takes a unique approach and offers investment notes, senior debt, and preferred equity. Another significant difference is that while EquityMultiple only works with accredited investors, RealtyMogul offerings are open to accredited and non-accredited investors.

• CrowdStreet: Both EquityMultiple and CrowdStreet only work with accredited status. However, while EquityMultiple offers investments with minimums as low as $1K-$5K, CrowdStreet’s base offerings require a minimum investment worth $25K. EquityMultiple charges management fees between 0.5% and 1% for most of its offerings, while its competitor charges between 1% and 5%. Ultimately, the decision to invest with either depends on how much capital you’re willing to put on the line.

Read Also: 10 Best Real Estate Agent Software: Leads, Listing, & More

Financial Commitments: Understanding EquityMultiple’s Fees

EquityMultiple imposes varying fees across its offerings. The company charges an annual management fee for individual commercial property investments from 0.5% to 1.5% until maturity. Upon maturity, the company retains 10% of the remaining profits after investor distributions.

The company requires a 1% servicing fee for offerings in the Ascent Income Fund. Alpine Notes are free of any management or admin fee, while the cost varies for fund or asset management. We recommend checking out their official website for the exact fee terms of your preferred investment.

EquityMultiple FAQs

While our EquityMultiple review is pretty comprehensive, we compiled frequently asked questions about the company to help you quickly determine if the company is an ideal fit for your investment needs:

How Does EquityMultiple Make Money?

EquityMultiple earns money from its asset management fees for its commercial real estate product offerings. For instance, it imposes 1% servicing fees for its Ascent Income Fund products and requires 0.5%- 1% for equity investments. Additionally, the company receives a share of the profits upon the maturity of commercial real estate projects. EquityMultiple also uses some of its offerings, such as Alpine Notes, to generate funds for its line of credit.

Is EquityMultiple A Good Investment?

If the track record is anything to go by, EquityMultiple is a good investment. With over $4 billion in return distributions and a substantial investor base, EquityMultiple presents itself as a reliable investment platform. Furthermore, its investment offerings demonstrate high-yield potential. For instance, historically, the Ascent Income Fund boasts a 13.1% distribution rate of returns, while long-term commercial investments typically yield an 18% or more IRR.

Is EquityMultiple Right For You?

If you’re an accredited investor interested in commercial real estate, EquityMultiple is among the best companies you can invest in. It offers different types of investments, allowing you to find what works for you. However, note that some investments are illiquid for up to seven years. That said, whether or not EquityMultiple is right for you depends on your risk tolerance, preferred ROI, and liquidity needs. So, assess these factors or consult a financial advisor to determine if it’s the right passive investing company for you.

Read Also: How To Invest In Real Estate: 11 Best Ways To Get Started

EquityMultiple Review: Final Thoughts

After our thorough research, including reviewing their official website, independent EquityMultiple.com reviews, and customer testimonials, EquityMultiple stands out as one of the best passive investing platforms around.

With a mix of short and long-term investment products, the company enables individual investors to spread risk and strike a balance between liquidity and attractive returns.

Furthermore, EquityMultiple is pretty transparent about the terms and even acknowledges the risks involved, ensuring those who invest know what they’re signing up for. Its solid investor base and history of returns prove that the company is a credible passive investing option.

Our EquityMultiple review revealed a big caveat: It only works with accredited investors, denying regular investors the opportunity to participate in potentially lucrative opportunities. Despite this limitation, we’d consider EquityMultiple a compelling option for accredited investors seeking reliable passive investment opportunities.

As you assess whether EquityMultiple aligns with your investment goals, sign up for our free investor training to capitalize on seasoned experts' valuable real estate investing insights and strategies.