DiversyFund Review 2024 (2024)

You should choose DiversyFund if you want to make a long-term investment in real estate without making a huge contribution.

You can start investing in the main DiversyFund Multifamily Fund with as little as $500. You also do not have to be an accredited investor to use the DiversyFund investment funds. DiversyFund allows you to invest in alternative assets without meeting the typical high-income or net worth standards.

You need a long-term investment commitment with this platform, as it takes five to seven years to get your money back from each project. DiversyFund won’t pay any income until this point.

DiversyFund is not a good fit if you have ongoing cash needs from your investments. But if you are fine with the lengthy timeline, DiversyFund’s platform offers a quick, easy and effective way to start buying into real estate projects with decent returns.

DiversyFund works by combining the money of many small investors to buy investment real estate.

The platform lists what investments DiversyFund is planning and the project specifics, like minimum required investment, details about the property, target return and the expected timeline for getting your money back. You pick which real estate projects look most appealing for your situation.

DiversyFund then uses the raised funds to build and develop real estate properties. At the end of the project cycle, DiversyFund will sell the real estate to earn a profit, hopefully. At this point, investors get their share of the sales proceeds.

DiversyFund invests your money in multifamily real estate projects across the United States.

It currently has projects in California, Florida, North Carolina, South Carolina and Texas. DiversyFund invests in real estate properties that its experts think have growth potential, such as properties that need renovations or where the owner is in financial distress and would sell at a discount.

DiversyFund uses the money it raises from investors to pay for construction, maintenance or upgrades to add value to the properties. The company typically follows a five- to seven-year development cycle before selling the properties.

Any investor can buy into real estate investment trusts, or REITs, which are a portfolio of multiple properties. Accredited investors can also buy into individual single-asset properties. You can pick exactly which projects to buy into rather than a general fund. To qualify as an accredited investor, you must meet one of the following:

• Your annual income over the past two years as an individual was over $200,000 per year, or $300,000 per year as a married couple filing jointly.
• Your net worth is over $1 million, not including your primary residence.

DiveryFund’s main feature is the real estate crowdfunding platform. It’s a simple but effective setup. You can access the platform on a computer or through a mobile device. The platform lets you see information on your portfolio, performance and account updates. You can also review new projects as they come up to decide whether to invest.

DiversyFund’s platform lets you set up automatic investments to buy into new projects. It also provides FAQs and a learning center to teach people about real estate investing.

Every DiversyFund project releases a memorandum outlining the fees and costs. Typically, DiversyFund charges a 2% annual management fee during the project.

If DiversyFund buys pieces of real estate, it could also charge another 1% to 4% fee from the investor pool to offset these costs. DiversyFund might also deduct additional fees for financing, construction, selling the property and project guarantee fees.

You do not receive any money while the project is ongoing. At the end of the project, DiversyFund will sell the property. It will then distribute this money to the shareholders evenly based on how much everyone paid in.

If the project turns a profit, DiversyFund will pay all profits out to investors until they earn at least a 7% annual return. Once investors have received at least 7% a year, DiversyFund will collect a share of the remaining profits.

For example, it might take up a third of the profits until investors reach an annual return of 12% and 50% of all remaining profits. Each project memorandum lays out how the fee split works.

You don’t pay any fees out-of-pocket to open your account, make the investments or to make withdrawals. The fees and costs are deducted from the investor cash pool and the final profit distribution.

Opening an account with DiversyFund is quick and easy. You get started by creating a username and connecting your email address. With this, you can log into the platform to see the specific investment options.

To invest, you must provide your contact information and social security number, and verify your identity through a credit report or past completed check transaction. You link your bank account to make deposits using Plaid.

After that, you can transfer money into your DiversyFund account. The platform will show the possible real estate investments and funds, including the minimum contribution. Pick the one you want and click “Invest Now” to buy shares of a project.

If you’d like to invest in a premier offering, you can set up your contribution, but it will appear as pending. DiversyFund will need you to send them additional documents, like your income tax return, to confirm that you qualify as an accredited investor. If you meet the standards, your investment will go through.

• Handles all stages of real estate investment management. Investing directly in real estate takes a lot of ongoing time and effort. With DiversyFund, its experts handle the entire process from acquiring properties, handling renovations and improvements to liquidating for a profit. You add real estate to your portfolio without the work.
• Low investment minimum. The DiversyFund REIT has a minimum investment requirement of just $500. You do not have to be an accredited investor to use this fund. DiversyFund makes investing in larger, multifamily real estate developments accessible for small portfolios.
• Decent target returns. DiversyFund says REITs like its Multifamily Fund have an average return of about 11.2% per year. Some of its projects have target returns of 15%. While these returns aren’t guaranteed, it shows that DiversyFund aims high for its clients.
• Well-designed platform. It’s easy to set up an account and start investing with DiversyFund. The platform clearly lists every available investment opportunity plus the details you need to evaluate them.

• Locks up your money for years. You cannot quickly get your money back once you invest in a DiversyFund project. Most projects require you to commit five to seven years until DiversyFund sells the property. It’s not like a publicly traded REIT, where you can sell your shares on the market anytime you want.
• Deducts multiple fees. DiversyFund deducts a 2% annual management fee, a share of the final profits and ongoing fees for managing each project. You wouldn’t owe these fees buying real estate on your own.
• No ongoing income. DiversyFund doesn’t pay out ongoing rental income or profit distributions from its projects. Usually, you’ll only get money back at the end of the project after DiversyFund sells the property.
• Limited investment selection. DiversyFund does not have as many ongoing projects as other online real estate platforms, like Fundrise. Even accredited investors are limited to just a few ongoing deals. DiversyFund also only focuses on projects in six states.

DiversyFund offers a convenient way for investors to buy into real estate with little money down. The target returns are decent, and you don’t have to be an accredited investor to use this system. While the investment selection could be more extensive, it’s an excellent solution for small investors who want to make long-term investments in real estate.