Fortunately, a company named Arrived Homes has come up with a solution. This unique platform allows investors to purchase shares of individual properties, enabling them to begin their real estate investing journey for as little as $100!

Of course, things that sound too good to be true often are, so what’s the catch? Is there one, or does this company actually have a streamlined, pain-free, and accessible solution to real estate investing? You’ll have your answer by the end of this article!

A Bit of Background

Founded in 2019 by Alejandro Chouza, Kenny Cason, and Ryan Frazier, Arrived Homes is a relatively new company compared to other well-known real estate crowdfunding platforms.

Despite that, the business has already partnered with Plaid—a well-known financial services company—and has received support from some major backers. A few notable backers include Jeff Bezos (Amazon, executive chairman), Spencer Rascoff (co-founder of Zillow), and Dara Khosrowshahi (Uber, CEO).

Arrived Homes is Best for…

Any investor—accredited or not—who’s interested in investing in single-family rental properties. Like many other investment opportunities, Arrived Homes requires investors to be comfortable with having their funds held up for 5-7 years (as the platform lacks any liquidity).

However, investors will enjoy a consistent income throughout the duration of their investment. Investors will receive returns in the form of rental income, as well as profits from when the real estate properties they’ve invested in are sold.

Pros & Cons

Pros:
● Low minimum investment of $100 for fractional shares
● Investors have no personal liability for the properties they’ve invested in
● Consistent cash flow between rental payments and property appreciation
● Arrived Homes is transparent about its annual returns and expected dividend payments
● Straightforward fee structure (one-time fee for sourcing costs and a 1% annual management fee)
Cons:
● Minimum purchase price may vary between different real estate properties
● Your investments will be tied to the real estate platform for 5-7 years
● No secondary market

Minimum Investment

Arrived Home has a pretty low minimum investment requirement, although it’s not as low as some alternative real estate crowdfunding platforms like Fundrise. Technically, the minimum investment is $100. However, this isn’t always the case.

You’ll always be able to find a rental property with a minimum of $100 (10 shares), but it’s also possible to find single-family homes with higher minimum investment requirements. Of course, you can always invest more if you’d like!

The housing market is fairly active right now, and this is especially true on Arrived Home. In fact, due to high investor demand, there may be limited investing options when you first sign up. This is good—as it shows a clear sign of growth for the platform—but can be mildly inconvenient when you’re only able to invest in a few properties.

Before you can start reaping the benefits of passive income, there are a few fees that you should be aware of. Fortunately, Arrived Home only charges investors three fees, which are calculated using the property’s purchase price.

● You’ll need to pay a one-time sourcing fee. The exact cost will be listed on the deal’s page, but prices range from 3.5% (long term rental homes) to 5.0% (vacation rental property).
● You’ll also be responsible for an AUM (assets under management) fee. This will be charged quarterly at 0.15% for long term rental homes and 0.125% for vacation rental properties. This
● Only vacation rental properties will incur a 5% gross rent revenue fee.

Investment Opportunities

As it stands right now, investing with Arrived Home is fairly straightforward. You choose which rental property you’d like to invest in, purchase shares, then enjoy quarterly dividends throughout the duration of your investment. Currently, the company lets you choose which type of investment you’d like to make: vacation rental homes or single-family homes.

Unfortunately, although it’s in the works, you won’t be able to liquidate your investment property shares once you’ve purchased them. You can make a redemption request, but until SEC qualifies Arrived Homes, redemptions aren’t possible.

This lack of a secondary market is the main drawback a real-estate investor will notice when comparing Arrived to similar real estate investing platforms.

Arrived Homes Review: Wrap-up

With both residential and vacation properties that are equipped with their own property managers, investing with Arrived Homes doesn’t require anything beyond purchasing property shares. Everything else is handled by the company & its agents.

If you’ve been considering investing in the real estate market but either a.) lack the accredited status or, b.) aren’t interested in purchasing actual properties, then Arrived Homes could be the perfect platform for you.

Click here to see what Arrived Homes could add to your portfolio!

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