EquityMultiple Review 2024: Pros, Cons and How It Compares

EquityMultiple is an online real estate company that allows accredited investors to invest in professionally managed commercial real estate. Accredited investors can use EquityMultiple's online platform to access real estate investments in different markets. EquityMultiple says it has returned $379 million to investors, and that it stands out from other real estate investing platforms by offering equity, preferred equity and senior debt investments.

EquityMultiple is best for:

• Accredited investors looking to diversify through real estate.

• Those who can comfortably invest $5,000 or more.

• Individuals who want access to commercial real estate.

EquityMultiple at a glance

EquityMultiple features you should know

Accredited investors only: EquityMultiple may open up commercial real estate investments to individual investors, but those individuals need to be accredited. Accredited investors are defined as individuals with a net worth, or joint net worth with a spouse, of more than $1 million (excluding their home’s value), or an annual income of more than $200,000 ($300,000 with a spouse) in each of the past two years, with the expectation of maintaining that income going forward. Those with certain professional certificates or credentials may also qualify as accredited investors.

High investment minimum for most offerings: The minimum varies by project, and although it starts at $1,000, a $10,000 minimum is more common, and additional shares are typically offered in increments of $5,000 above the minimum.

Specialized investments: EquityMultiple offers preferred equity, common equity, funds, 1031 exchanges (upon request), and senior debt. The company offers access to these products through three different investments: The Alpine Note, the Ascent Income Fund and the Brooklyn Industrial NPL Acquisition.

• The Alpine note has a short duration of nine months and redemption options as early as 30 days, with a minimum of $5,000.

• EquityMultiple's Basecamp option is a new Alpine Note series that's exclusively for first-time EquityMultiple investors. The product targets 9% APY over a 3-month term, and has a relatively low minimum investment of $1,000. Previously, minimum investments at EquityMultiple started at $5,000.

• The Ascent Income Fund contains senior debt, preferred equity and yield-focused funds with a minimum of $20,000.

• The Brooklyn Industrial NPL Acquisition is a commercial real estate investment focused on opportunistic equity. The investment minimum is $20,000, and the target holding period is five years.

Note: Many of these types of investments are complicated and should not be entered into lightly. It’s always a good idea to talk with a financial advisor before adding a new asset to your portfolio.

High returns: The targeted rates of return are fairly high, and depend on the type of investment. EquityMultiple publishes these target rates.

• Senior debt: 8-12% target rate of return.

• Preferred equity: 10-14% target preferred return.

• Opportunistic equity: net IRRs (internal rate of return) of 18%+.

• Yield-focused cash management funds: Annualized yield of 7.4%.

Of course, actual returns will vary from target returns and there is no guarantee that your investment will earn a return at all.

Typically debt and preferred equity investments give investors distributions either monthly or quarterly, though EquityMultiple stresses that each investment will differ, and it says to refer to specific investment documents to know each investment’s distribution timeline.

Keep in mind that these assets can be illiquid, so if you think you may need your money before the timeframe is up, it may be best to consider other investment options.

Easy-to-use platform: Accredited investors start by creating an account. After receiving an email confirmation, you can register (which includes self-certifying that you are, in fact, accredited — though you won’t need to provide documentary evidence of this) and immediately start reviewing the investment offerings. Signing up for an account doesn’t require making a deposit, but if you decide to invest, you can link the funding source online.

Complex fees: Most investments on EquityMultiple charge an annual management fee between 0.5% and 1.5% with most landing at 1%.

Because each investment listed on EquityMultiple’s platform is unique, each investment has its own fee structure. Some may include additional fees, but placement or origination fees are assessed to the sponsor, not the investor. To know exactly how much you would pay in fees for each investment, read the specific disclosure and registration statements. If you don’t understand the fee information, contact one of EquityMultiple’s representatives.

Newer investment platform: Like many of its real estate crowdfunding competitors, EquityMultiple is a newer company. Since the company was founded in 2015, it has had little time to establish a track record. The company is careful to remind investors that every investment carries risk, and that investors should read each specific investment’s documents carefully before making an investment.

Strong customer support: Many of EquityMultiple's peers only offer an email address or ticketing system to field customer questions. EquityMultiple offers email, chat and phone, available to prospective and existing clients.

» Compare before investing: Best real estate crowdfunding platforms

Is EquityMultiple right for you?

EquityMultiple’s unique set of investment opportunities gives accredited investors an easy way to diversify the real estate within their portfolio.

If you’re interested in allocating a small portion of your overall portfolio to real estate, and can do so while meeting EquityMultiple’s investment minimums, you might find a good fit in the platform.

However, it is important to note that some of EquityMultiple's investments are illiquid — meaning you won’t be able to get your investment back immediately, or in some cases for several years. Investing in real estate this way is a long-term game, and if you’re not prepared to wait it out, you may want to consider more liquid assets, such as publicly traded REITs.

» Curious about other options? Check out our guide on how to invest in real estate