DiversyFund offers investment opportunities similar to real estate investment trusts (REITs) with low investment requirements, which makes it ideal for those who are new to real estate investing. DiversyFund buys a collection of properties that range from student housing to multifamily apartment complexes. It renovates them and then looks to sell them within three to five years.
DiversyFund offers easy access to the real estate market. You can start with as little as $500. However, this investment option comes with both drawbacks and positives. You need to weigh these pros and cons and decide if DiversyFund is the best real estate investment option for your plans and long-term goals.
Here is what you need to consider before you use DiversyFund.
Table of Contents
DiversyFund Features
REITs are different from stocks. People who are familiar with more-standard investment providers need to familiarize themselves with DiversyFund’s features, including services, fees, and the details of the investment portfolio.
Account Services
DiversyFund manages the investment and management of properties on behalf of investors. They handle all the day-to-day work related to the places they own.
As an investor, you do not need to have active participation in the management of the projects.
This fact is essential to understand. Real estate investment has a steep learning curve that can make it difficult for novice investors to enter the market. You may quickly build wealth with real estate, but you could also lose everything if you do not know what you are doing.
REITs and companies like DiversyFund take this barrier out of the equation.
Unlike some REIT providers, who act as brokers between investors and developers, DiversyFund directly manages their properties. This aspect of their service makes them more transparent and does not expose you to additional management fees.
Fees
DiversyFund requires a minimum investment of $500. There are no fees beyond that. Because the company manages its properties directly, they do not charge additional management fees.
Portfolio Content
DiversyFund develops properties over a three-to-five-year period, though this time frame can be longer depending on market conditions.
During the current period, DiversyFund’s portfolio consists of the following properties in California, Texas, and North Carolina:
- Goshen – A renovated home in Linda Vista, California. It is used as student housing and has two three-bedroom units.
- Park Boulevard – A 59-unit mixed-use development in San Diego, California.
- Summerlyn – A 200-unit apartment complex in Killeen, Texas.
- McArthur Landing – A 211-unit multifamily apartment complex in Fayetteville, North Carolina.
Portfolio Management
DiversyFund owns and runs investment properties in Texas, California, and North Carolina. The company purchases the properties looking to improve them and then resell them within five years.
After each cycle, the company purchases new properties and begins developing them for resale. No outside party manages the portfolio.
Types of Ownership
Accounts can be set up individually, jointly for multiple owners, via a trust for a beneficiary, or via an entity such as an incorporated company. You select the type of ownership that you want when you sign up for the account. You will then provide the necessary information, documents, and identification based on the type of ownership that you chose.
DiversyFund Benefits
DiversyFund has significant benefits for people who want to start investing in real estate without experiencing the usual barriers to entry.
- Low bar for entry: You can invest with as little as $500. The low minimum makes real estate investment accessible for almost anyone.
- Open to non-accredited investors: You don’t have to be accredited to invest in DiversifyFund’s non-listed REIT. However, investors seeking to invest in the Series A funding should get accredited before they pay the $25,000 minimum.
- Does not act as a broker: All the investments are pre-funded and owned by DiversyFund. This arrangement means that the company has a stake in the outcome of each development project.
- Does not charge any platform fees for investors: All the expenses you have to pay get factored into your investment. Therefore, you will not see any surprise fees during the development of each project.
- Makes a completely passive real estate investment possible: The company manages the entire process, allowing investors to sit back and wait for returns.
DiversyFund Complaints
DiversyFund makes real estate investments accessible, but it also has some negative attributes.
- Investments are currently limited to California, Texas, and North Carolina: They are not geographically diverse and could, therefore, get affected by local real estate markets.
- Only offers a growth REIT: Accredited investors could get access to additional investments, but overall, the options are minimal at DiversyFund.
- DiversyFund is a long-term investment: It does not offer liquidity for those who need to see a return on their investment in less than five years. If you want a quicker return on your investment, you are better off with liquid assets, such as stocks.
- Does not give investors a say in the projects that it chooses: You have no say in the contents of the investment. Since there is currently only one investment option, you need to accept it or look for a different investment provider.
- Does not pay quarterly distributions to its investors: You will need to wait for the company to sell its properties to realize your returns. Some real estate funds do pay quarterly, although these often require a higher minimum investment.
- DiversyFund is unlisted, which makes it illiquid: You can’t sell your shares before the investment matures. Illiquidity could be a problem if the real estate market experiences volatility, and you want to take your money out of the fund.
Is DiversyFund Right for You?
DiversyFund is a good option for investors seeking a low account minimum for real estate investments. Also, you do not have to be an accredited investor for DiversyFund, so the signup process is very straightforward.
However, people need to realize that this is a long-term investment that requires you to wait for at least three years before you get any returns.
For this reason, DiversyFund is best for people saving for retirement or slowly building wealth with the goal of eventually achieving financial freedom.
Because DiversyFund isn’t listed, it is, in a way, riskier than listed REITs. You can sell your shares in a listed REIT if you think the market is going to move against you. That is not possible with DiversyFund. You would have to ride out any real estate downturns.
If you prefer less risk, you can opt for a real estate-related exchange-traded fund (ETF), which trades like a regular stock.
Also, you should keep in mind that DiversyFund functions best as one part of a diverse investment portfolio. Being diversified lowers your overall risk from any single investment. With this approach, DiversyFund could be one piece in an investment strategy that helps you meet your financial goals.
How to Sign Up for DiversyFund
Compared to investing in real estate independently, the DiversyFund signup process is straightforward and quick.
- You sign up via the DiversyFund website.
- Create an account on the signup page. You can either manually enter your details or connect via Parallel, LinkedIn, or Facebook.
- Validate your account and use DiversyFund’s secure third party portal to provide a funding source.
- Select how much you want to invest and initiate the bank transfer. It should take about a day or two before it shows up in your DiversyFund account.
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