DiversyFund Overview
DiversyFund is a real estate crowdfunding platform designed to make investing in commercial real estate accessible and manageable for everyday investors. Here’s a detailed look at what the platform does and its key features:
What DiversyFund Does
DiversyFund invests in undervalued multifamily properties across various U.S. markets with high growth potential. The platform uses a crowdfunding model to pool funds from investors, which are then used to purchase, renovate, and manage these properties. The primary goal is to increase the market value of these properties through renovations and then sell them for a profit after a holding period of typically four to six years.
Key Features
Investment Options
- Multifamily Fund: This is the primary investment option available to both accredited and non-accredited investors. It allows investors to diversify their portfolios across multiple multifamily properties such as apartment complexes, townhomes, and duplexes. Non-accredited investors can only invest in this fund.
- Premier Offerings: These are single-asset real estate offerings available only to accredited investors. These investments target vetted multifamily properties with potential for long-term wealth and may offer unique tax benefits.
Minimum Investment
- The minimum investment required to start is $500, making it accessible to a broader range of investors. For Premier Offerings, the minimum investment is typically higher, such as $50,000.
Management and Fees
- DiversyFund manages the properties directly, aligning the company’s objectives with those of its investors. The platform charges a 2% annual asset management fee and a closing real estate transaction fee.
Investment Approach
- DiversyFund employs a three-step strategy:
- Acquire multifamily apartment buildings that are already generating revenue but need improvements.
- Add value through renovations to increase property value and rental income.
- Hold the properties until they appreciate further and then sell them for a maximum profit.
Returns and Distributions
- Investors are offered a 7% preferred annual return, meaning that DiversyFund does not profit until investors receive at least this return. However, the platform does not pay out dividends, and investors must wait until the properties are sold to receive their earnings.
Liquidity and Holding Period
- Investments are highly illiquid, with a required holding period of four to six years. Investors cannot withdraw their earnings until the properties are sold.
Accessibility
- DiversyFund is open to all U.S. residents over 18, including both accredited and non-accredited investors, making real estate investing more democratized.
Automation and Ease of Use
- The platform offers automated real estate investment management through its Auto-Invest feature, allowing for recurring monthly payments. It also provides a user-friendly interface through both its desktop website and mobile app.
In summary, DiversyFund is a user-friendly and accessible real estate crowdfunding platform that allows everyday investors to participate in the private commercial real estate market with a relatively low minimum investment. It is particularly suited for passive investors who are willing to hold their investments for the long term.