Equity Multiple Reviews & Ratings
Type:
Real Estate Equity & Debt
Focus:
Real Estate Equity & Debt

Overall:

Platform Provided Due Diligence:

Platform Fees:

Quality of Deals:

Website - EquityMultiple.com

Fees - .5% annual asset management fee on equity + 10% carry

Phone - 646)-844-9943

SEC REG - USES 506(c) - Open Investments can be advertised and publicly discussed

EQUITYMULTIPLE is the only online investing platform backed by an established real estate company - Mission Capital, a leading national real estate capital markets firm. Since 2002 the firm has advised and managed transactions across commercial and residential loan sales and arranged project financing.

Our national network of real estate companies is constantly seeking opportunities across the country and across property types. They diligence each project and invest with their own funds, aligning their interests with EQUITYMULTIPLE investors and providing a first layer of diligence. 

For projects that survive initial due diligence, we stress test underwriting assumptions, review key legal documents and third party reports and consider transaction structure. A select few are presented on our platform.

We strive to:

Offer a highly curated set of deals, presented comprehensively and transparently

Collaborate with the sponsor or lender to optimize risk-adjusted returns for our investors

Ensure that all investor questions get answered by our dedicated team of investment specialists

Once an equity investment has been made, EQUITYMULTIPLE charges investors a small annual fee — typically 0.5% of the aggregate amount invested — that is paid periodically to cover ongoing investor reporting, tax preparation and communications relating to the investment. EQUITYMULTIPLE also receives 10% of investor profits after investors have received all of their initial investment back.

For preferred equity and debt investments, EQUITYMULTIPLE typically takes a servicing fee in the form of a “spread” between the interest rate being paid by the sponsor or originating lender and that being paid to investors. EQUITYMULTIPLE also generally charges the lender an origination fee and other charges typically associated with initiating a real estate loan or preferred equity investment. In the event of default, extension or other special circumstances, certain fees and charges payable by a borrower or Sponsor will be shared among EQUITYMULTIPLE and investors, as such situations involve increased servicing duties on the part of EQUITYMULTIPLE. Details as to such fees and sharing arrangements can be reviewed in the applicable investment documentation.

Details of our EquityMultiple Review 2020 

An online real estate investing platform, EquityMultiple provides real estate investors that have been accredited properly to invest in commercial real estate opportunities, often with monthly or quarterly payouts. Investors that meet SEC guidelines can use the platform to make property investments in a number of markets. The company reports returning $39.2 million to investors and offers not just senior debt investments but equity investment products as well, which makes Equity Multiple stand out amongst its peers. 

As this real estate crowdfunding platform is designed for the accredited investor looking to use real estate to diversify their portfolio, Equity Multiple is a natural draw for anyone who wants to access commercial property markets. With many types of investments totaling $10,000 or even more in minimum investment amounts, this is certainly more than a penny-ante investment platform. 

Important Platform Features 

You can’t start investing in real estate unless you know what you’re getting into. Breaking down the features of any platform’s crowdfunding real estate investments is integral to the research process. We’ve gathered the most salient points here for you to understand what you’ll be getting into if you begin using Equity Multiple to make real estate deals.

No support for non-accredited investors: Any investor looking to get into commercial property to make money must be accredited by the SEC before they can invest in private equity products or services through Equity Multiple. This means that they need a net worth of more than $1 million excluding the value of their home or a yearly income of at least $200,000 over the past two years to invest with EquityMultiple for individual investors. For couples, this requirement increases to $300,000. If you have a specific type of professional credential or certificate you may qualify as accredited as well, but these are relatively rare occurrences. 

High investment minimums: Minimum investment amounts for Equity Multiple tend to be on the high side. While each project has its own set minimum, these values are seldom under $5,000. In fact, it’s common to find the minimum set at a figure of at least $10,000. If you want to have a self-directed IRA through the platform, the minimum investment amount rises to $20,000. 

Multiple Investment Types: Unlike some investment platforms, EquityMultiple offers a wide range of long term and short term investment opportunities. In addition to one nontraded REIT, the platform also offers 1031 exchanges, opportunity zones, funds, common equity, mezzanine debt, and senior debt. 

Four of these investments are used to create what Equity Multiple calls its “capital stack” in regards to how it funds property investments. Differences abound, with the most notable having to do with payment priority order and risk level. Risk levels begin at senior debt at the lowest and progress through mezzanine, preferred equity, and common equity. Incidentally, this final risk level has uncapped potential when it comes to returns in exchange to no remedy if borrowers default. 

Other investment types such as 1031 exchanges make it easy for an investor to use the gains from a property investment sale to defer capital gains tax payments when buying investment properties “of like kind”. Opportunity zones, meanwhile, are open for investment through tax-advantaged opportunity funds; these properties are selected by the government and earmarked as economic development zones.

Do these investment types sound overly complex? They can be. It’s important to consult with a financial advisor before adding new assets to your investment portfolio, as they will be able to explain how each of these investments work in great detail. 

High returns: Rates of return on these investments, while dependent on which type of investment you’re making, tend to be relatively high. Senior debt and preferred investments have a targeted annual rate of return between 7% and 15%, while common equity investment products are targeted at 5% to 12% near-term annualized cash flow. As always, your actual return will be variable. There are never any guarantees that your investment will be successful, either, no matter how rigorous you are with your own research.

Variable time Frames: the time frames on Equity Multiple’s investments are varied according to asset. Short-term investment in Senior Debt and Preferred top out at around 2 years, while Common investments range from 3 to 7 years. Opportunity Zones can run as long as a decade or more, which is ideal if an investor is looking to get the maximum tax benefits possible. Funds, meanwhile, will vary.

Preferred equity and debt investments distribute gains to investors on either a monthly or a quarterly basis. This, as always, differs by investment, so always check the investment documents specific to each investment to learn the exact timeline you’re working with. Additionally, these are illiquid assets, so you’ll be locking away your investment funds for the entirety of the term. 

User-friendly platform: The Equity Multiple platform stresses ease of use, allowing accredited investors to create an account and begin reviewing investment offerings after self-certifying via email. You need not make a deposit first in order to sign up. However, users making a decision to invest have links to online funding sources.

Fee structure: The platform’s fee structure is notable in that it is both complex and relatively higher than most. Annual management fees range from 0.5% to 1.5%, with most investments charging around 1% on average. Common equity investments, meanwhile, are cut by 10% of their profits after investors get their initial investment preferred return but before they receive their gains. 

Thanks to the uniqueness of each investment on the Equity Multiple platform, there is a lot of variance when it comes to fee structures. While the investor is never required to pay origination or placement fees, there are some additional fees that some investments may require investors to pay. Again, do your due diligence by reading each and every disclosure and registration statement associated with each investment. If the fee information isn’t clear, be sure to contact an Equity Multiple representative to gain some clarity.

Limited track record: this type of crowdfunding is a relatively new sector. Like more than a few of its competitor real estate crowdfunding platforms, Equity Multiple has only been around for a few years; Equity Multiple, for example, was founded in 2015. So far, its track record is relatively positive, but it is also short - and Equity Multiple stresses to investors that there’s no such thing as a “no-risk” investment.

Is Equity Multiple a Good Investment for You?

As an investment platform, Equity Mobile certainly has some strengths. The biggest is its eclectic range of investments available. Most platforms will specialize in debt investment or equity investment, but Equity Mobile does both and much more. This makes it easy to diversify across multiple types of commercial real estate investment, which can help bolster return on investment in the event of one or two investments that fail to provide a return. 

At the same time, it’s important to remember that there are some potential downsides. First and foremost is the fact that the platform is the exclusive purview of accredited investors. This blocks a vast number of less well-heeled individuals from using the platform. Additionally, investment minimums are a bit on the high side as they average at around $10,000. Plus, these investments are illiquid, which means your capital will be locked away for the full term of each investment. For the shorter-term investments available through Equity Mobile this is less of a problem, but for the longer-term common equity and opportunity zone investments, this could lead to a problem in the future if you have a financial emergency. 

In the end, Equity Multiple is a good source for property investment if you want to invest in equity deals or other investment options. you’re looking to diversify, you’re unconcerned with liquidity, and if you meet the criteria. Otherwise, you might want to give this platform a pass. 

Due Diligence & Discussions

Share your experience. Rate and comment!

Tommy Gunn

Feb 15, 2021

Signed up with them q1 2020.  Invested in only 2 deals so far (mostly due to terms not being short enough for my current strategy).  One termed early and ended up paying 9%. The other one I'm in is 'delayed,' but seems they have a plan in place that's working.  

Pros:  solid underwriting, good comms, website GUI/flow
Cons: low dealflow, not enough s/t deals, no self-serve monthly/quarterly statements (must request), very very slow on K-1s

Peter Kuhn

May 11, 2020

I am in 18 deals with EM. All in all in have been impressed with the quality of deal flow and the due diligence. Deal flow is light during the pandemic. They do a nice job on DD but I still do my own as well. I am particuar about the deals I participate in. 

I feel their fees are fair. Their technology is very good. Presntaion format is straightforwrd and communciation about ongoing invesments has been excellent!

My expectation is they will take the lead if a deal goes sideways.EM has an asset management team with some goos expereince. Much better than having a piece of a deal with 20 other non related investolrs.

I have been very pleased with my EM relationship. I do have some concerns about a few deals I am in with them during the on going pandemic but I can not point a fiinger at them for that.

Be happy to share any other insights thta might be helpful

 

MUFAZZAL BADANI

May 02, 2020

I like the syle and technology behind the platform, but he quality fo the deals has become sub-par with more marketing fluf tehn actaul real descriptions. Have not made any more deals. currently have 4 deals with them - 3 are current and 1 in default. ( however they are providing updates on the default deals once every 2 months)

Robert Fakheri

Aug 26, 2018

Platform appears decent but deal flow is poor. Currently zero deals available (other platforms that I use like CrowdStreet and ShareStates have dozens of deals currently available). Their fees seem to be higher than other platforms though difficult to compare apples to apples as fees are structured differently.

Brandon Vogt

Feb 02, 2018

I'm impressed by EquityMultiple and their leadership team. Their level of due diligence in each deal is higher than many other platforms I've made investments. I appreciate their level of communication in terms of depth and frequency, as well as the user experience of their website. Investments are performing as expected, and payments have been on time throughout. I'll continue investing with them in the future.

Jack Bodden

Feb 09, 2017

I have invested twice through Equity Multiple.  They score the highest marks on due diligence and co-investing in each deal.  Deal volume seems to be the biggest critique as they tend to only have 2-3 offerings available at any one time.  Recently, they pulled their support on a deal and returned investor funds when some of the underlying fundamentals of the offering changed.  That impressed me even though I was disappointed the deal did not close

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Equity Multiple Reviews & Ratings Equity Multiple Reviews & Ratings
Rated 3.0/5 based on 13 customer reviews

Website - EquityMultiple.com

Fees - .5% annual asset management fee on equity + 10% carry

Phone - 646)-844-9943

SEC REG - USES 506(c) - Open Investments can be advertised and publicly discussed

EQUITYMULTIPLE is the only online investing platform backed by an established real estate company - Mission Capital, a leading national real estate capital markets firm. Since 2002 the firm has advised and managed transactions across commercial and residential loan sales and arranged project financing.

Our national network of real estate companies is constantly seeking opportunities across the country and across property types. They diligence each project and invest with their own funds, aligning their interests with EQUITYMULTIPLE investors and providing a first layer of diligence. 

For projects that survive initial due diligence, we stress test underwriting assumptions, review key legal documents and third party reports and consider transaction structure. A select few are presented on our platform.

We strive to:

Offer a highly curated set of deals, presented comprehensively and transparently

Collaborate with the sponsor or lender to optimize risk-adjusted returns for our investors

Ensure that all investor questions get answered by our dedicated team of investment specialists

Once an equity investment has been made, EQUITYMULTIPLE charges investors a small annual fee — typically 0.5% of the aggregate amount invested — that is paid periodically to cover ongoing investor reporting, tax preparation and communications relating to the investment. EQUITYMULTIPLE also receives 10% of investor profits after investors have received all of their initial investment back.

For preferred equity and debt investments, EQUITYMULTIPLE typically takes a servicing fee in the form of a “spread” between the interest rate being paid by the sponsor or originating lender and that being paid to investors. EQUITYMULTIPLE also generally charges the lender an origination fee and other charges typically associated with initiating a real estate loan or preferred equity investment. In the event of default, extension or other special circumstances, certain fees and charges payable by a borrower or Sponsor will be shared among EQUITYMULTIPLE and investors, as such situations involve increased servicing duties on the part of EQUITYMULTIPLE. Details as to such fees and sharing arrangements can be reviewed in the applicable investment documentation.

Details of our EquityMultiple Review 2020 

An online real estate investing platform, EquityMultiple provides real estate investors that have been accredited properly to invest in commercial real estate opportunities, often with monthly or quarterly payouts. Investors that meet SEC guidelines can use the platform to make property investments in a number of markets. The company reports returning $39.2 million to investors and offers not just senior debt investments but equity investment products as well, which makes Equity Multiple stand out amongst its peers. 

As this real estate crowdfunding platform is designed for the accredited investor looking to use real estate to diversify their portfolio, Equity Multiple is a natural draw for anyone who wants to access commercial property markets. With many types of investments totaling $10,000 or even more in minimum investment amounts, this is certainly more than a penny-ante investment platform. 

Important Platform Features 

You can’t start investing in real estate unless you know what you’re getting into. Breaking down the features of any platform’s crowdfunding real estate investments is integral to the research process. We’ve gathered the most salient points here for you to understand what you’ll be getting into if you begin using Equity Multiple to make real estate deals.

No support for non-accredited investors: Any investor looking to get into commercial property to make money must be accredited by the SEC before they can invest in private equity products or services through Equity Multiple. This means that they need a net worth of more than $1 million excluding the value of their home or a yearly income of at least $200,000 over the past two years to invest with EquityMultiple for individual investors. For couples, this requirement increases to $300,000. If you have a specific type of professional credential or certificate you may qualify as accredited as well, but these are relatively rare occurrences. 

High investment minimums: Minimum investment amounts for Equity Multiple tend to be on the high side. While each project has its own set minimum, these values are seldom under $5,000. In fact, it’s common to find the minimum set at a figure of at least $10,000. If you want to have a self-directed IRA through the platform, the minimum investment amount rises to $20,000. 

Multiple Investment Types: Unlike some investment platforms, EquityMultiple offers a wide range of long term and short term investment opportunities. In addition to one nontraded REIT, the platform also offers 1031 exchanges, opportunity zones, funds, common equity, mezzanine debt, and senior debt. 

Four of these investments are used to create what Equity Multiple calls its “capital stack” in regards to how it funds property investments. Differences abound, with the most notable having to do with payment priority order and risk level. Risk levels begin at senior debt at the lowest and progress through mezzanine, preferred equity, and common equity. Incidentally, this final risk level has uncapped potential when it comes to returns in exchange to no remedy if borrowers default. 

Other investment types such as 1031 exchanges make it easy for an investor to use the gains from a property investment sale to defer capital gains tax payments when buying investment properties “of like kind”. Opportunity zones, meanwhile, are open for investment through tax-advantaged opportunity funds; these properties are selected by the government and earmarked as economic development zones.

Do these investment types sound overly complex? They can be. It’s important to consult with a financial advisor before adding new assets to your investment portfolio, as they will be able to explain how each of these investments work in great detail. 

High returns: Rates of return on these investments, while dependent on which type of investment you’re making, tend to be relatively high. Senior debt and preferred investments have a targeted annual rate of return between 7% and 15%, while common equity investment products are targeted at 5% to 12% near-term annualized cash flow. As always, your actual return will be variable. There are never any guarantees that your investment will be successful, either, no matter how rigorous you are with your own research.

Variable time Frames: the time frames on Equity Multiple’s investments are varied according to asset. Short-term investment in Senior Debt and Preferred top out at around 2 years, while Common investments range from 3 to 7 years. Opportunity Zones can run as long as a decade or more, which is ideal if an investor is looking to get the maximum tax benefits possible. Funds, meanwhile, will vary.

Preferred equity and debt investments distribute gains to investors on either a monthly or a quarterly basis. This, as always, differs by investment, so always check the investment documents specific to each investment to learn the exact timeline you’re working with. Additionally, these are illiquid assets, so you’ll be locking away your investment funds for the entirety of the term. 

User-friendly platform: The Equity Multiple platform stresses ease of use, allowing accredited investors to create an account and begin reviewing investment offerings after self-certifying via email. You need not make a deposit first in order to sign up. However, users making a decision to invest have links to online funding sources.

Fee structure: The platform’s fee structure is notable in that it is both complex and relatively higher than most. Annual management fees range from 0.5% to 1.5%, with most investments charging around 1% on average. Common equity investments, meanwhile, are cut by 10% of their profits after investors get their initial investment preferred return but before they receive their gains. 

Thanks to the uniqueness of each investment on the Equity Multiple platform, there is a lot of variance when it comes to fee structures. While the investor is never required to pay origination or placement fees, there are some additional fees that some investments may require investors to pay. Again, do your due diligence by reading each and every disclosure and registration statement associated with each investment. If the fee information isn’t clear, be sure to contact an Equity Multiple representative to gain some clarity.

Limited track record: this type of crowdfunding is a relatively new sector. Like more than a few of its competitor real estate crowdfunding platforms, Equity Multiple has only been around for a few years; Equity Multiple, for example, was founded in 2015. So far, its track record is relatively positive, but it is also short - and Equity Multiple stresses to investors that there’s no such thing as a “no-risk” investment.

Is Equity Multiple a Good Investment for You?

As an investment platform, Equity Mobile certainly has some strengths. The biggest is its eclectic range of investments available. Most platforms will specialize in debt investment or equity investment, but Equity Mobile does both and much more. This makes it easy to diversify across multiple types of commercial real estate investment, which can help bolster return on investment in the event of one or two investments that fail to provide a return. 

At the same time, it’s important to remember that there are some potential downsides. First and foremost is the fact that the platform is the exclusive purview of accredited investors. This blocks a vast number of less well-heeled individuals from using the platform. Additionally, investment minimums are a bit on the high side as they average at around $10,000. Plus, these investments are illiquid, which means your capital will be locked away for the full term of each investment. For the shorter-term investments available through Equity Mobile this is less of a problem, but for the longer-term common equity and opportunity zone investments, this could lead to a problem in the future if you have a financial emergency. 

In the end, Equity Multiple is a good source for property investment if you want to invest in equity deals or other investment options. you’re looking to diversify, you’re unconcerned with liquidity, and if you meet the criteria. Otherwise, you might want to give this platform a pass.