EquityMultiple Review 2024: Pros, Cons and How It Compares

EquityMultiple is an online real estate company that allows accredited investors to invest in professionally managed commercial real estate. Accredited investors can use EquityMultiple's online platform to access real estate investments in different markets. EquityMultiple offers equity, preferred equity and senior debt investments, as well as short-term notes.

EquityMultiple is best for:

• Accredited investors looking to diversify through real estate.

• Those who can comfortably invest $5,000 or more.

• Individuals who want access to commercial real estate.

EquityMultiple at a glance

EquityMultiple features you should know

Accredited investors only: EquityMultiple may open up commercial real estate investments to individual investors, but those individuals need to be accredited. Accredited investors are defined as individuals with a net worth, or joint net worth with a spouse, of more than $1 million (excluding their home’s value), or an annual income of more than $200,000 ($300,000 with a spouse) in each of the past two years, with the expectation of maintaining that income going forward. Those with certain professional certificates or credentials may also qualify as accredited investors.

High investment minimum for most offerings: The minimum varies by project, and although it starts at $5,000, a $20,000 minimum is common. Additional shares are typically offered in increments of $5,000 above the minimum.

Specialized investments: EquityMultiple offers preferred equity, common equity, funds, short-term notes and senior debt. The company provides access to these products through three main offerings:

• The Alpine Note offers flexible terms of three, six and nine months, with a minimum investment of $5,000. EquityMultiple considers the Alpine Note a cash management tool, as it offers the most liquidity on the platform.

• The Ascent Income Fund aims to provide steady income by investing in senior real estate debt. Redemption options become available after one year, and the minimum was recently lowered to $5,000.

• The Brooklyn Industrial NPL Acquisition is a commercial real estate investment focused on opportunistic equity. The investment minimum is $20,000, and the target holding period is five years.

Note: Many of these types of investments are complicated and should not be entered into lightly. It’s always a good idea to talk with a financial advisor before adding a new asset to your portfolio.

High returns: The targeted rates of return are fairly high, and depend on the type of investment. EquityMultiple publishes these target rates. As of this review, rates were:

• Alpine Note: 7.4% annualized yield.

• Ascent Income Fund: Target returns of 8% to 12% for senior debt and 10% to 14% for preferred equity.

• Brooklyn Industrial NPL Acquisition: Target net internal rate of return of 18%.

Of course, actual returns will vary from target returns and there is no guarantee that your investment will earn a return at all.

Typically debt and preferred equity investments give investors distributions either monthly or quarterly, though EquityMultiple stresses that each investment will differ, and it says to refer to specific investment documents to know each investment’s distribution timeline.

Keep in mind that these assets can be illiquid, so if you think you may need your money before the timeframe is up, it may be best to consider other investment options.

Easy-to-use platform: Accredited investors start by creating an account. After receiving an email confirmation, you can register (which includes self-certifying that you are, in fact, accredited — though you won’t need to provide documentary evidence of this) and immediately start reviewing the investment offerings. Signing up for an account doesn’t require making a deposit, but if you decide to invest, you can link the funding source online.

Complex fees: Most investments on EquityMultiple charge an annual fee between 0.5% and 1.5%.

Because each investment listed on EquityMultiple’s platform is unique, each investment has its own fee structure. Some may include additional fees, including origination fees and an annual administration fee that can range from $30 to $70. To know exactly how much you can expect to pay in fees for each investment, read the specific disclosure and registration statements. If you don’t understand the fee information, contact one of EquityMultiple’s representatives.

Strong customer support: Many of EquityMultiple's peers only offer an email address or ticketing system to field customer questions. EquityMultiple offers email, chat and phone, available to prospective and existing clients.

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Is EquityMultiple right for you?

EquityMultiple’s unique set of investment opportunities gives accredited investors an easy way to diversify the real estate within their portfolio.

If you’re interested in allocating a small portion of your overall portfolio to real estate, and can do so while meeting EquityMultiple’s investment minimums, you might find a good fit in the platform.

However, it is important to note that some of EquityMultiple's investments are illiquid — meaning you won’t be able to get your investment back immediately, or in some cases for several years. Investing in real estate this way is a long-term game, and if you’re not prepared to wait it out, you may want to consider more liquid assets, such as publicly traded REITs.

» Curious about other options? Check out our guide on how to invest in real estate