DiversyFund is a relatively new player in the realm of real estate crowdfunding, launched in 2016 and having secured its Series A funding in 2018. It stands out because it enables non-accredited investors to delve into real estate investments with as little as $500. Unlike many platforms, DiversyFund owns and manages the properties it invests in, thereby eliminating management fees for investors. However, they do take a performance fee from the profits, which affects the overall returns for investors.
One major drawback is the lack of liquidity. Investors must be prepared to leave their money in the investment for at least three years without expecting any interim cash flows, as dividends are automatically reinvested and payouts only occur once properties are sold. This setup is not ideal for those seeking regular income or quick access to their funds.
DiversyFund’s core offering, the DF Growth REIT, includes investments in various real estate projects like apartment complexes and luxury homes, primarily in Southern California and Texas. These investments are pooled into a public non-listed REIT, which is registered with the SEC, enhancing transparency and investor confidence.
However, the private nature of the REIT means that selling shares can be challenging. Investors looking to exit might have to wait several years or sell at a significant discount. The platform’s stability is also an issue, with only a limited amount of funding secured and an unclear future if additional funding is not obtained.
On the riskier side of its strategic developments, DiversyFund had considered an Initial Coin Offering to raise capital, a method that has seen mixed success and stability in the financial market. This move could introduce additional risk factors for the platform and its investors.
Given these considerations, while DiversyFund presents an accessible entry point for non-accredited investors into real estate, the potential for long-term illiquidity and the platform’s short operational history might give prospective investors pause. Those interested in real estate crowdfunding with a more proven track record and greater liquidity may consider options like Fundrise, which has a longer history and a broader asset base.
For accredited investors looking for more direct control over their investments, platforms like CrowdStreet offer the opportunity to invest in individual projects, potentially aligning better with personal investment strategies, especially in light of the increasing trend of migration from large cities to smaller, growing markets.
