Nearly 44 million homes in the United States are occupied by renters, making rental property investing an evergreen income opportunity.
If you want to become a real estate investor without signing on to be a landlord, a real estate crowdfunding platform like Arrived, formerly Arrived Homes, could be the solution.
With a low minimum investment requirement and a solid track record, Arrived is an appealing new investment opportunity.
In this Arrived review, we’ll take a look at the platform’s fees, features, and returns, to help you decide if it’s the right fit for you.
What is Arrived?
Arrived, formerly Arrived Homes, is a real estate platform that crowdsources capital to buy rental properties.
It was founded in 2019 and has since funded $103 million of property value. The company is headed up by CEO and co-founder Ryan Frazier and is based in Seattle.
Arrived users can buy fractional shares of individual rental homes and earn money over time through rental payments and home appreciation.
While a lot of crowdfunding alternatives hone in on real estate investment trusts (REITs) or commercial properties, Arrived specializes in individual residential properties, letting you invest in rental homes and vacation rentals.
How Does Arrived Work?
The overall goal of Arrived is to serve as an easy entry point for investing in rental properties. Not everyone has the resources to buy a property outright to rent, but Arrived lets you start investing with just $100.
Here’s what the process looks like:
- Browse: When you sign up, you can browse through available properties that are open to new investors. Each one goes through vetting to determine its income potential, using data science to purchase profitable properties.
- Invest: Once you find a property (or several) that you like, determine how much you’d like to invest, and Arrived will reserve those shares on your behalf. At this point, you sign an online contract and link your bank account to make your initial investment.
- Grow: From there, you can enjoy a truly passive income Arrived takes care of property management and assumes all liability, so all you have to do is sit back and watch your investment grow.
- Earn quarterly dividends: Arrived issues dividend payments to investors on a quarterly basis.
- Sell: The end goal is to sell the property, usually within five to seven years, at which point you would earn an equity payout based on your ownership share.
Low Minimum Investment
Arguably the best aspect of Arrived Homes is that it gives investors of all income levels the chance to own a piece of a condo, single-family home, vacation rental, or other residential real estate property.
To get started, you need a minimum investment of $100. Note there’s a direct correlation between how much you invest and how much you stand to earn. But with such a low barrier to entry, Arrived makes it easy to get your feet wet and learn the ropes.
Some properties have increased investment minimums to limit the number of investors, but I’ve rarely seen one above $500.
Cash Dividends
Another key feature of Arrived is its cash dividends. Based on past performance, the average dividend yield is between 3.2% and 7.2%.
Investors also earn revenue from property appreciation, but these annual returns can be tough to predict.
Real Estate Investing Guide
Arrived also offers its Real Estate Investing Guide to help you understand how to start investing effectively. The guide covers both the how and the why of real estate investments and sets you up with helpful tips for maximizing your returns.
Property Management
Property management is another central feature of Arrived. Arrived aims to ensure steady cash flow by using property managers to attract and keep solid tenants.
Property managers also take the hassle out of maintaining properties, handling leasing, day-to-day communications with renters, and maintenance and other concerns.
Arrived is upfront about its property management fee, which ranges from 8-25% depending on the property type.
Single Family Residential Fund
The Single Family Residential Fund is another key feature recently launched by Arrived.
The reimagined REIT gives investors instant diversification and the ability to invest in properties at any time rather than waiting for individual homes to go on the market.
It offers quick liquidity, giving you access to your funds six months after your first investment, and then quarterly. By consolidating several homes in one fund, it also provides lower shared operating costs.
You can easily find an overview of each of the properties in the fund, such as their location, purchase price, anticipated rent, and square footage on Arrived’s website.
Pricing & Fees
It’s free to sign up for Arrived, and there are no membership or subscription fees for using the platform. While the cost of your investment will be the most expensive aspect of using Arrived, there are some other costs to consider.
Here’s the full breakdown of what you can expect to pay if you decide to use the service.
Initial Investment
As mentioned above, you’ll need an initial investment of at least $100, which you can transfer from a linked bank account or a checkbook IRA.
Sourcing Fees
Arrived charges a sourcing fee for each property that covers the costs of locating and preparing it for investment. It’s a one-time fee and the amount varies for each property. Either way, you’ll be able to see exactly what those fees are in the Offering Details section of a listing.
Annual Asset Management Fees
Arrived also comes with an Annual Asset Management (AUM) fee, which helps cover ongoing costs like tax form preparation, dividends distribution, and home insurance.
Like the sourcing fee, the annual management fee varies depending on the specific property. Again, you’ll know precisely what it is ahead of time, so there won’t be any surprises.
Taxes
Like any investment, the money you earn with Arrived is classified as taxable income by the IRS. Arrived will send your relevant tax information at the end of the year, and it’s your responsibility to report it on your return.
Early Liquidation Fees
Disclaimer—Arrived is not a platform for flipping quick returns. Keep this in mind as you plan out your strategy.
Arrived recommends that investors buy-in for the long term, from three to seven years.
If you need to liquidate your shares early, you can sell them to other investors after the initial six-month holding period. However, if you take this route, you could be on the hook for transaction fees because Arrived doesn’t handle secondary market transactions.
Signing Up & Getting Started
To sign up for Arrived, you need to be at least 18 years old and a U.S. citizen. The platform is built for everyday investors, so you don’t need to be an accredited investor to qualify.
Creating your account on Arrived.com is quick and simple. All you need to get started is an email address and your full name.
From there, you need to set up your investment account, which requires more information for identity verification purposes. You can choose to set up either a personal or LLC account, and you need to have your Social Security or Tax ID number on hand.
The next step is to link your bank account for funding. Arrived connects with most major institutions, so you shouldn’t have any trouble connecting yours.
Once everything is set up, you can start picking out investment properties.
Security
Arrives operates on a secure platform that safeguards your personal and financial information. All data is encrypted and bank transfers are handled through Plaid, a reputable third-party financial technology platform.
Additionally, Arrived keeps you protected from any personal liability concerning your property shares. Each home is owned through an LLC, so shareholders aren’t held responsible if something goes wrong.
Customer Service
Arrived offers a few different customer support options when you need help with your account.
Its online Help Center is full of how-tos and FAQs that cover most basic account needs. If you need to speak to someone, you can reach out by email or phone.
Arrived also has some solid ratings and reviews to back it up, with an A+ from the BBB and accreditation. It also has an overall rating of 4.6 out of 5 stars on Google Reviews.
Pros & Cons
Pros
- Low start-up cost
- No membership fees
- Easy way to try rental property investing
- Available to non-accredited investors
Cons
- Suited for long-term investments only
- Potential for higher ROI in the stock market
- No mobile app
- No sign-up bonus
Alternatives to Arrived Homes
Now that you have a better idea about the pros and cons of Arrived, let’s review a couple of the platform’s most popular competitors.
Fundrise
Fundrise is a crowdfunding real estate platform that allows users to invest in commercial property portfolios. Like Arrived, Fundrise investments are considered long-term.
The main difference between Fundrise and Arrived is the type of investments you can select. Rather than letting investors pick individual properties, Fundrise focuses on diversification and disperses investments across a portfolio of properties.
It’s one of the most accessible platforms for new investors, with a $10 minimum initial investment.
Groundfloor
Groundfloor is a crowdsourced real estate investment platform that focuses on short-term, high-yield returns.
The platform is extremely accessible with a minimum investment of just $10.
Groundfloor might be a better fit for those looking for a quick turnaround on rental income.
Frequently Asked Questions
How does Arrived make money?
Arrived makes money through a variety of fees, including an Agent Rebate, which the previous owner of a purchased property covers. It also charges a Sourcing Fee and an Annual Asset Management Fee to its investors.
Does Jeff Bezos invest in Arrived?
Yes. Bezos’s private investment firm, Bezos Expeditions, was a contributor to Arrived’s 2021 round of fundraising.
Is Arrived legit?
Yes, Arrived is a legitimate investment platform that helps everyday investors purchase shares of rental properties.
Is Arrived the same as Arrived Homes?
Yes. Arrived Homes recently rebranded, now going by the name Arrived. Its services, features, and platform haven’t changed.
Learn More:
- The Best Real Estate Side Hustles for Extra Income
- Real Estate Crowdfunding for Non-Accredited Investors
- Passive Real Estate Investing: A Beginner’s Guide
The Bottom Line
Arrived allows you to get into the real estate investing game with as little as $100.
As such, it might be a great match if you’re interested in single-family rental properties but don’t want the responsibility that comes with sourcing and managing them.
However, it’s important to keep in mind that Arrived won’t produce short-term returns.
If you don’t have the flexibility to sit on your portfolio for several years, it probably isn’t the right service for you. Then again, it’s almost impossible to flip quick profits with real estate investments.
Either way, now that you know what Arrived brings to the table, you’re one step closer to elevating your personal finances.
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