EquityMultiple Review
Introduction — Reviewing EquityMultiple, Real Estate Investing “built for [my] journey”
Making the “accredited investor” threshold means you have more options. It isn’t just 401k’s and Robinhood anymore. Accredited investors can access “private placement” opportunities that generally make use of Reg D to gain exemption from the Securities Act of 1933. Prior to that Great Depression-era law, I imagine guys in bowler hats running around yelling “get in on the ground floor, see! You can’t afford to miss this opportunity, Jim!” Then the Depression happened, Bonnie & Clyde started killing people, unions took power, stagflation happened, Reagonomics took over, the finance lobby eroded regulations, the GFC happened, interest rates were consigned to the basement, Americans got rich and liquid again and started feeling frisky and we all decided we didn’t need so many safeguards on hawking securities, and fintech companies with names like “EquityMultiple” started popping up. (I think that’s roughly the chain of events.)
These days investing platforms are the equivalent of the guy in the bowler hat. Some of them are carnival barkers, some seem to be the real deal. I think EquityMultiple is the latter.
Total EquityMultiple Review Score:
Crowd Composite: 3.47
Righteous Money score: 4.5
Average: 3.99
That’s cool that they found a picture of me for their homepage…
EquityMultiple Review Roundup
Righteous Money likes the wisdom of the crowd! We’re smart; the internet, in totality, is smarter. So we take a “weighted scoring” approach, looking at the review sources that take a more objective assessment of the platform. (Many online reviews of investment and personal finance platforms are done by paid affiliates who are overly incentivized to review positively.)
Here’s what other reputable reviewers have to say about EquityMultiple, in aggregate:
Google Reviews — 3.8
CrowdDD — 2.9
Trustpilot — 2.3
Nerdwallet — 4.5
Weighted EquityMultiple Review Composite Score: 3.73
EquityMultiple History and Track Record
EquityMultiple was founded in 2015 by two guys with previously fancy jobs, and generally feels like they have more of a buttoned-up approach than some of the other real estate crowdfunding platforms out there. According to their site they’ve paid out over $379M in distribution to investors.
They’ve put out some literature around a focus on asset management and underwriting, saying they only accept around 5% of deals they consider. All the platforms say some version of this, but I’m inclined to believe them a bit more since their underwriting team seems more visible, like on this podcast.
They don’t make their track record publicly available, but if you have an account you can find it pretty easily. They state their total return as 15% (net IRR) all-time and 17% since “formation of investment committee,” which appears to mean since the start of 2019. They state that 5.81% of deals on their platform have lost money all-time. Sort of scary, but nice that they publish this transparently.
How Does EquityMultiple Work?
EquityMultiple is less of a robo-advisor type product (like Fundrise) and more of a real estate private equity shop for individual investors. They do have diversified products (private funds) but it’s much less of a “set it and forget it” investing app. You’re doing your own due diligence and oftentimes reading through a lot of text to figure out what the key points of a given deal are. Probably the preferred way of operating for someone more versed in real estate, but can be overwhelming for someone newer to the space (like me).
Investors can pick from three “pillars” — Keep, Earn, and Grow, which organize their investments into three types of return profile.
Keep: short-term notes that offer fixed maturities and APYs (sort of like a CD)
Earn: debt and preferred equity, focused on “offering current yield, payment priority, and a relatively short term.”
Grow: “CRE investments offering significant upside potential.” These are JV equity investments, presumably that are riskier.
EquityMultiple ESG and Impact Investing Considerations
In speaking with the Investor Relations Team at EquityMultiple, they don’t have a formal investing category for ESG investments, but they do consider the community-mindedness of sponsor firms that they partner with. Some investments will have a workforce or market-rate focus in supply-constrained areas, which could help with housing affordability.
The Righteous Money Take
I have only made a few small investments with EquityMultiple, but so far I have found the experience to be easy and encouraging. Alpine Notes are a good place to start, and I’m interested in their Ascent Income Fund as a next step.
It feels like a higher end real estate crowdfunding platform, more for quite wealthy people rather than barely-accredited plebeians like myself. Still, the platform is well organized and they have a nice, logical range of investment types which are well categorized.
My major takeaways:
Pros:
They seem to have more of a serious real estate finance and investing background, collectively, than other platforms
I found it easy to get questions answered and talk to a real human
They have a great diversity of investing options
Cons:
The minimums on a lot of their investments are fairly high
Higher barrier to entry and some complexity for the “grow” investments
No auto-investing or auto-allocation tools
Righteous Money EquityMultiple Review: 4.5/5
EquityMultiple Review Concludes: Is EquityMultiple Right for You?
EquityMultiple definitely feels like more of the varsity world of real estate investing. It’s a high level of access to structured, private-market commercial real estate. This cuts both ways: it feels like a revolutionary level of access for a small beans investor to be able to tap into, but also a bit daunting. If I had “f** you” levels of cash and liquidity, I wouldn’t think too hard about investing in these “rigorously vetted” Grow assets, but given that these relatively low minimums aren’t so low for me, I feel like I’d need to pore over all the details to get comfortable with a decision. Still, the people I’ve talked to at the company seem decent and they do a good job presenting a variety of options for different investing mindsets.
In short, I likely don’t have the capital to make full use of the platform right now, but I like what they have going on. Righteous Money recommends!
Disclaimer: This review is meant for informational purposes only and is not financial advice. Always consult with a financial advisor before making any investment decisions.