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DiversyFund is an affordable real-estate investment platform for accredited and non-accredited investors to capitalize on commercial properties with high growth potential. Investments generally become profitable after four to six years.
Business Insider’s personal finance team compared DiversyFund to the best real estate investing apps. We found it to be an industry leader for accessible real estate investing. However, its investments are highly illiquid.
DiversyFund
Fees
2% annual asset management fee and a closing real estate transaction fee
- $500 minimum investment
- Automated real-estate investment management
- Available to non-accredited investors
- Limited investment selection
- Can’t choose your own investment projects and you must hold for at least four years
- No IRAs
- Can’t withdraw your investments’ earnings until the real estate assets, or properties, are sold
Insider’s Take
DiversyFund is one of the best real estate investing apps for non-accredited investors who don’t mind waiting four to six years to see their investments grow.
Product Details
- Consider it if: You prefer robo-advice over DIY real estate investing, and you want to minimize management fees.
- App store rating: 3.4 iOS/ 3.5 Android
Introduction to DiversyFund
DiversyFund is a straightforward real estate crowdfunding platform that aims to make real estate investing more accessible for everyday investors. It invests in undervalued multifamily properties diversified across different U.S. markets with high growth potential.
DiversyFund is best for passive investors looking to enter the private commercial real estate market without paying high account minimums or management fees. Keep in mind that investing in leveraged real estate investments poses a substantial risk and is not well suited for beginners.
Non-accredited investors can only invest in the platform’s Multifamily Fund. This fund aims to offer investors long-term appreciation by using the pooled funds to renovate properties and increase their market value. Accredited investors can invest in single-asset offerings with an average annualized return of 11.2%,
DiversyFund uses a set-it-and-forget-it approach in combination with its Auto-Invest features for setting recurring monthly payments. While you can start investing for as little as $500, DiversyFund doesn’t pay out dividends or generate instant passive income. Rather, investors will have to wait the entire holding period (four to six years) before earning back money.
DiversyFund: Overall Rating
How DiversyFund Works
Multifamily Fund
The Multifamily Fund is DiversyFund’s primary investment option and the only investable asset available for non-accredited investors. Non-accredited investors can easily diversify their investment portfolios across multiple U.S.-based multifamily properties like apartment complexes, townhomes, and duplexes.
The Fund is professionally managed by DiversyFund, making it more accessible for novice and hands-off real estate investors. The minimum monthly investment is $500, but you can contribute as much as you like.
Since it owns all of the real estate assets it offers, DiversyFund manages each project from start to finish and profits alongside you. Plus, investors earn at least a 7% preferred annual return. DiversyFund doesn’t profit until investors receive at least their preferred annual return.
Remember, though, that since DiversyFund’s Growth REIT is a public, non-traded real estate investment, you won’t be able to withdraw your investments’ earnings until the properties are sold. The Multifamily Fund has a holding period between four and six years.
Premier Offerings
DiversyFund’s Premier Offerings are single-asset real estate offerings only available for accredited investors (individual or joint income exceeding $300,000 for the last two years). It targets vetted single-asset multifamily properties with the potential for long-term wealth. Premier Offerings provides a cheaper alternative to owning a residential property.
For example, you can invest in The Independent, a multifamily real estate property in Sand City, California, with a minimum investment of $50,000. It offers a 15% projected investor return with a five-year projected hold period. DiversyFund is transparent about its offerings, providing property stats, location details, and necessary investor information.
DiversyFund website/Mac screenshot
These assets may offer a unique tax benefit since commercial multifamily properties can depreciate due to segregation. Segregation can reduce a property’s taxable income and tax liability. DiversyFund encourages investors to consult a licensed tax advisor regarding this opportunity.
DiversyFund Fees
DiversyFund charges a 2% asset management fee plus a closing real estate transaction fee. DiversyFund’s minimum investment starts at $500 monthly but can be as high as $50,000.
Pros and Cons of DiversyFund
DiversyFund Trustworthiness
DiversyFund has an F rating with the Better Business Bureau because of multiple unresolved complaints.
The BBB considers several factors when assigning ratings to companies. These include the company’s complaint history, type of business, time in business, licensing and government actions, advertising issues, and more.
In March 2022, the SEC filed charges against DiversyFund for its Growth REIT II. The SEC said the company made misleading statements, failed to disclose risk adequately, and breached fiduciary duty. These charges are still pending.
DiversyFund vs. Other Real Estate Investment Platforms
DiversyFund vs. Fundrise
Like DiversyFund, Fundrise offers real estate investments to both accredited and non-accredited investors. However, the platforms vary in terms of investment options and fees.
Non-accredited investors are limited to the Multifamily Fund with DiversyFund, whereas Fundrise offers four plan options that invest in private real estate, private credit, and venture capital. Therefore, Fundrise provides more investment opportunities for non-accredited investors. It also offers quarterly liquidity and risk-adjusted returns.
DiversyFund is great for accessing single-asset multifamily properties (only accessible to accredited investors). But if you want more control over your investment plan and how your assets are allocated, Fundrise may be the better option.
DiversyFund vs.Yieldstreet
Yieldstreet offers multi-asset class funds, alternative investments, and short-term notes. So, if you’re looking to invest in a greater variety of alternative investments, Yieldstreet is a better choice than DiversyFund. However, Yieldstreet has a much higher minimum investment.
DiversyFund is a more affordable platform for real-estate investing since its Multifamily Fund has a minimum investment of $500. Remember that your money is locked up with DiversyFund until the invested properties are sold (between four and six years).
Yieldstreet offers both liquid and illiquid options, depending on your preferred investment style. The Credit Fund is a nine-month investment opportunity offering consistent cash flow over the short term. On the other hand, Yieldstreet’s Alternative Income Fund holds onto your cash for several years.
DiversyFund FAQs
DiversyFund is a good investment option for accredited and non-accredited investors to invest in commercial multifamily properties like apartment complexes, duplexes, and townhomes. These undervalued properties have high-growth potential. DiversyFund targets these properties across the U.S. and uses the pool of funds from investors to increase market value through renovations.
DiversyFund is an affordable real estate crowdfunding platform for non-accredited investors. Starting at $500, you can invest in commercial multifamily properties 2% asset management fee plus a closing real estate transaction fee. Some exclusive investment options for accredited investors require a much higher minimum investment.
Yes, you can invest in DiversyFund if you’re not an accredited investor. However, non-accredited investors can only invest in DiversyDund’s Multifamily Fund, starting at $500. Only accredited investors can invest in single-asset properties and the venture capital fund.
Why You Should Trust Us: How We Reviewed DiversyFund
We reviewed the DiversyFund real-estate investing app using Business Insider’s rating methodology for investing platforms to compare ethics, accessibility, and overall customer experience. Each real estate investment platform also receives a liquidity rating based on how it compares next to other real estate apps, not other type of investment apps. Platforms receive a rating between 1 and 5 in each category.
Real estate investing platforms offer alternative portfolio diversification, passive income streams, transparent fees, and other resources. Some platforms are better for more advanced or active investors, while others may better suit beginner or passive investors. DiversyFund was evaluated, focusing on how it performed in each category.
