There's a good chance that you've heard someone say that real estate is a powerful wealth-building strategy. It certainly can be! But maybe you worry about the time, the money, the taxes, or something else? There's a new investing platform set to help anyone get past those real estate reservations, and we can't wait to share more in our Arrived Homes review!
Who is Arrived Homes?
Arrived Homes is a start-up company that is determined to help the everyday person become a real estate investor. The company says its goal is “to empower the world to build wealth through modern real estate investing”.
To do that, Arrived Homes combines the concept of crowdfunding with real estate, while keeping the minimums low and removing a lot of the traditional real estate headaches investors might experience.
How Does Investing with Arrived Homes Work?
You can invest with Arrived Homes in four easy steps.
Step 1: Review The Offerings
Arrived Homes posts their inventory online. That means that investors can scroll through photos, property specs, location details, and more. You can choose one or more properties to invest in knowing that the listings have already been vetted by Arrived Homes for their income potential.
Step 2: Calculate What You Want to Invest
After selecting the property you would like to invest in, you will determine how much money you want to invest. To do this, you calculate the number of shares you want to buy, starting with a $100 minimum investment.
Step 3: Sign on the Dotted Line
Once you know how much money you want to invest, you will sign an online contract with Arrived Homes. After the contract is signed, you fund your investment with your linked bank account.
Step 4: Collect Your Income
Each quarter, you will collect a rental income deposit from Arrived Homes. Additionally, as a shareholder, you are also entitled to a percentage of the property value appreciation.
In four simple steps, you can become a real estate investor with Arrived Homes.
Arrived Homes Review: Best Features
No Arrived Homes review would be complete without spotlighting the best features of this investing platform. Investors are excited about Arrived Homes for a variety of reasons. Some people love the fact that Arrived Homes does the research and legwork for you. Other people enjoy that it is a truly passive approach to real estate.
Let's explore more of the best features of Arrived Homes:
Painless Property Management
There's no sense beating around the bush: the number one reason that most people give as to why they don't invest in real estate is because they don't want to be a landlord. Ryan Frazier, Arrived Homes CEO, echos this, saying that one of the biggest reasons that keeps folks from jumping in is the high time commitment. There's everything from the day-to-day operations to the tax filings.
Of course, there are other ways around that. You can invest with a real estate partner who enjoys being a landlord, and you can also work with a property management company.
But the truth is that what many people are actually saying when they talk about not wanting to be a landlord is that they wish real estate investing felt more passive. That's where Arrived Homes shines.
You can invest in one or more properties, collect dividends, and rest assured that you'll never have to fix a leaking toilet or run background checks on new tenants. Arrived Homes does all the heavy lifting for you, making your investment a truly passive one.
Each quarter, Arrived Homes deposits rental income into your account. While they can't predict the future, Arrived Homes has paid out between 3-7% annually in the past.
In addition to managing your properties for you, they also find them! They source top-performing markets, find the right neighborhoods, and even vet the tenants. It doesn't get more hands-off than this!
In addition to taking on the operational responsibility (read: leaky faucets and overflowing toilets!), Arrived Homes limits your responsibility in another way.
Arrived Homes properties are put in LLCs. An LLC ensures that an investor cannot be held personally liable in the event of a lawsuit. By removing your personal liability as an investor, you can breathe easier.
Emphasis on Investor Accessibility
We know what you're thinking! Arrived Homes sounds really good. But you're probably also worried that you aren't eligible to invest. After all, there's so much conversation about real estate markets in general and rental properties specifically.
Arrived Homes actually wants to make investing accessible to everyone. That's why you can start buying shares for as little as $100 (as long as are a US resident). No need to be an accredited investor!
Responsive Customer Support
Arrived Homes makes it easy to start investing in real estate. They also make it simple to get customer support.
In addition to hosting a detailed Help Center, Arrived Homes also encourages people to contact them with questions. You can reach out to them by email at firstname.lastname@example.org or by calling them at 1-814-ARRIVED.
Arrived Homes Review: Areas for Improvement
With everything that there is to love about Arrived Homes, there are definitely some areas for them to improve on. Here are some of the things to be aware of with this real estate investing start-up.
As a growing start-up, Arrived Homes has good inventory, but it is limited. Arrived Homes has a growing team that analyzes hundreds of markets across the country. They aim to find the most lucrative, and that is what their inventory is based upon.
However, as Arrived Homes grows in popularity, it will need to expand its available inventory to meet investor demand. Frazier is aware of this saying, that he estimates Arrived Homes will have properties in 40 cities by the end of 2022.
In addition to growing their locations, Arrived Homes is also adding short-term rentals, like vacation properties, in the near future.
If you are a short-term investor or looking to dabble in real estate, Arrived Homes may not be for you.
Your money is fairly illiquid for 5-7 years, depending on the specific terms of your contract. If long-term investing is your game, that time frame is nothing. But for people who view this as an experiment before taking a deeper dive into real estate, that might actually be a long time to lock up your money.
A quick criticism of Arrived Homes is that by the time you hear the buzz and get ready to take action, the listing is gone. While that does happen sometimes, we anticipate this becoming less of a problem as their inventory grows. Hopefully, the investment options themselves expand and get communicated more quickly.
In addition to properties becoming unavailable fairly quickly, Arrived Homes doesn't do the best job of listing their fees upfront. They have a portion of their site dedicated to fees. While it's a step in the right direction, it could be clearer. They frequently remind investors to look at the Offering Details, when we'd really like to see the fees spelled out clearly and upfront.
Playing a Role in Complex Housing Issues
Finally, as more and more Americans feel the pinch when it comes to finding affordable housing, the concept of Arrived Homes might not sit well with everyone. Real estate companies and investors may have played a role in sending real estate prices sky high during the pandemic.
For some people, this might be troubling. And if that's true for you, then you might want to explore other investment options that align with your values.
Frazier does want to point out that there is something different about Arrived Homes compared to these big companies that are scooping up real estate. The goal of Arrived Homes is to allow everyday people access to the real estate economy. Each Arrived Home represents 100 to 1000 investors who are the owners of the home, not some big company.
While the issue of affordable housing and the real estate market will likely always be complicated, Arrived Homes is focused on opening the market to everyone.
Arrived Homes Review: Competitors
If you aren't sure if Arrived Homes is right for you, you might be interested in seeing how their competitors stack up. Let's dive in!
Roofstock is another option for real estate investors who want a jump start on all of the research that goes into real estate investing. However, they actually offer investors three different ways to buy real estate.
- Fractional shares of a property
- Single-family rental properties
- Portfolios made of single- and multi-family homes
The first investment type is most similar to Arrived Homes. They require a significantly larger investment minimum ($5,000 versus $100). But they also have a larger inventory and offer more diversity in terms of investing types. That means that Roofstock can support you through all the different stages of your real estate investing journey.
Check out our full Roofstock review to learn more!
Fundrise is one of the original real estate crowd-sourcing platforms. Once thought of as something only available to the extremely wealthy, real estate investing–specifically commercial real estate investing–is accessible to everyday investors thanks to Fundrise.
Fundrise offers several different REITs, or real estate investment trusts. These are private trusts, and Fundrise calls them eREITs. That means that they are not traded publicly on the market.
They offer five different plans: starter, basic, core, advanced, and premium.
These plans have a variety of different minimum investment requirements and unlock different investment strategies and levels of support. Investors can get started with as little as $10 with the starter plan. Individuals who want real estate to be part of their retirement plan can unlock access to an IRA in their basic plan with a $1,000 investment.
Like Arrived Homes, your investments are illiquid. That means they can't be easily sold or traded. You will have to reflect on your investing goals and time horizon to determine if an illiquid asset aligns with your plans.
Publicly Traded REITs
Another alternative way to invest in real estate is to invest in a publicly traded REIT. There are hundreds of REITs that trade on the stock exchange and are registered with the SEC. REITs let people invest in shares of real estate portfolios made up of a variety of properties, such as hotels, warehouses, and apartment buildings.
Since these trusts are publicly traded, you can purchase them through brokerages like Vanguard, just like you might buy an ETF or index fund. Since they are traded publicly, they are more liquid than the REITs available through Fundrise or the properties available with Roofstock and Arrived Homes.
Here's our list of the top brokerage partners where you can buy publicly-traded REITs.
As more and more investors look to add real estate to their investment portfolio, the number of Arrived Homes competitors will likely grow. That means, of course, that we can also expect Arrived Homes to get even more competitive with their offerings.
Arrived Homes Review: FAQ
It's important to do your homework before you make any type of investment, and we can help! We rounded up answers to the most commonly asked questions about Arrived Homes for our Arrived Homes FAQ.
Who owns Arrived Homes?
Are you wondering who actually owns Arrived Homes? Ryan Frazier is the CEO and co-founder of Arrived Homes. Frazier founded arrived homes with Kenny Cason and Alejandro Chouza in 2019. Shortly afterward, Arrived Homes launched in 2020.
Frazier previously worked at Sprout Social and Simply Measured as GM and then co-founded and CEO of DataRank. Now, he's turned his attention to real estate. As one of the most successful long-term investment options, real estate has previously felt off-limits to many people. Frazier and his co-founders want to change that.
Frazier says that they are lowering the barriers to entry by removing the high capital requirement or high time commitment to help more people create a passive real estate investment portfolio.
How does Arrived Homes make money?
Arrived Homes makes money in three ways:
- Through real estate agent rebates
- From a one-time sourcing fee
- With a quarterly asset management fee
The agent rebate is paid by the previous property owner when the property initially sells. Then, the one-time sourcing fee is built into the share price listed, so investors actually split that fee. Finally, the asset management fee comes out of the property income each quarter.
To learn more about the sourcing fee and the asset management fee, check out the Offering Details portion of each property listing before you invest.
How much do I need to invest with Arrived Homes?
Coming up with the cash for a down payment on a piece of real estate takes time and money! Arrived Homes slashes that timeline significantly by allowing investors to get started with as little as $100 USD. You also need to be a US resident over the age of 18 to get started.
Final Thoughts on our Arrived Homes Review
Many people are quick to cite real estate as playing an important role in building their wealth. But for every person who sings the praises of real estate, there's someone else who hesitates.
In the past, many of the typical challenges facing real estate investors–everything from limited market knowledge to property maintenance–were reason enough to leave real estate out of your investment portfolio.
But Arrived Homes wants to help investors overcome those obstacles. Combining technology with their real estate expertise, Arrived Homes is an investing platform that can turn just about anyone into a real estate investor.
That being said, if you're looking for a shorter-term investment option, we wouldn't suggest Arrived Homes. But if you have time on your side, the monthly dividends and long-term property appreciation could be a great way for you to build wealth.
Visit Arrived Homes to see if this low-stress way to invest in real estate without being a landlord is right for you!
How does real estate fit into your investment portfolio? What do you think of this Arrived Homes review?
Please let us know in the comments below.