If you’re looking for a way to start investing in real estate on a beginner’s budget, there are several companies online to research that provide opportunities for low start-up investors. One of the newest companies to review is DiversyFund. With an impressive first couple of years under way, DiversyFund’s Growth REIT already stands out, and the company aims to disrupt the standards of real estate investing.
In addition to information about what unique traits this company has to offer, and historical funds data, this review will provide the most up-to-date BBB rating and customer reviews so you can determine if it’s a good fit for your portfolio and your wallet.
What is DiversyFund? (Review – Real Estate Investing)
My DiversyFund QUICK-LOOK Review
Company Name: DiversyFund
Company Website: https://diversyfund.com
Owners: Craig Cecilio and Alan Lewis
Minimum Investment: $500
Investment Term: currently 5 years
Account Fees: currently 0% fund side, 2% – 8% sponsor side for acquisition and development
Property Types: multi-family apartment buildings with cash flow
Accolades: Bloomberg, US News, Cheddar, and NBC
RELATED: Not sure you want to commit to 5 years? Look at a REIT with a low initial investment and an early Redemption Plan What is Streitwise? (Review) Should You Invest?
Investing Like The 1%
Most people who invest, invest in stocks and bonds. Employer plans consist of stocks and bonds. Independent Financial Adviser plans consist mostly of stocks and bonds. But, if you research the holdings of the wealthiest people in the world, they all have something in common. They own or invest in a good amount of commercial real estate.
Whether you invest in the stock market or not, you’re likely aware that it fluctuates. So much so, that it is considered volatile. While investing in the right stocks, at the right time, can sometimes lead to incredible gains, and investing for the “long-term” can often lead to great retirement profits, the fact is that the stock market has an average return rate of 7% annually since the 1950s.
Real estate investments are considered to be a lot more stable, and can often lead to higher returns. In a diversified portfolio, REIT’s can be used as a wealth creation tool while providing a buffer from your volatile stock holdings.
What Do REIT’s have to Offer?
A REIT, or Real Estate Investment Trust, is a way to invest in real estate without personally buying any physical property.
REIT’s create wealth through:
- value appreciation
- equity growth
- cash flow of rental properties
REIT’s provide wealth to investors through:
- high dividends consisting of rental income and capital gains
As long as a REIT pays out at least 90% of its taxable income to its shareholders, its profits are not taxed at the corporate level. So, typically, REIT’s distribute the entire 90% to the shareholders. This means tax savings to the REIT company, and dividends to the investors.
While investing in physical real estate yourself can cost hundreds of thousands of dollars or more, investing in REIT’s can be quite affordable, especially if you find a company that doesn’t charge high investment fees.
What about NO fees?
My DiversyFund FULL Review
There are several ways to invest in REIT’s, and several companies that provide easy-to-use platforms to set up accounts and invest right online.
Some have taken a unique approach in that the owners and investment professionals “partner” with their investors rather than provide a brokerage service.
There are no Brokers. No Brokers means no Broker’s Fees.
With DiversyFund, you invest directly into the company’s multi-million dollar assets, without any middleman. They call this a vertically integrated platform, meaning they own all of their properties, manage all of their properties themselves, and you invest directly in those properties.
The DiversyFund Growth REIT
An Affordable Way to Get into Real Estate
If you have enough money to invest as a co-owner on the DiversyFund Real Estate FinTech Platform ($25,000), and there are still positions available to do so, then Congratulations! They have a targeted return of 5x your investment.
But, if you are seeking a lower-cost method of investing, then the Growth REIT is the way to go here.
The Details on the DiversyFund Growth REIT:
- It is a SEC-qualified Real Estate Investment Trust (REIT).
- It builds wealth by investing in cash-flowing apartment buildings.
- Its focus is on long-term capital appreciation of properties that DiversyFund actually owns and manages.
- Its targeted market is in the United States, with properties currently owned in California and Texas.
The New Account Low Minimum:
One of the things that deters, or hinders, investors from adding certain REIT’s to their portfolio is the common requirement that the investor be an “accredited investor.” An accredited investor is a special status that only high net worth individuals can attain, alongside banks, trusts, and insurance companies.
However, not all companies with REIT offerings require the accredited status.
DiversyFund works with both accredited and non-accredited investors, and has recently lowered the minimum investment in the Growth REIT to open the doors to more interested parties. It does not require tens of thousands of dollars to get started. DiversyFund has lowered their initial Growth REIT investment to $500.
The Potential Return:
Based on Historical Performance, the potential return is 17.6% a year.
According to the past two years statements, 2017 saw an annual return of 18%, and 2018 saw an annual return of 17.3%. They are forecasting similar returns in 2019.
Here is the current DiversyFund Offering Circular. To find possible updates, visit DiversyFund’s website, and look under Investments: DF Growth REIT.
Must-know Investment Information:
Though high annual returns are reported, it needs to be understood that this is a long-term investment. Currently, the term is 5 years. During that period, all returns are automatically reinvested into the REIT to increase overall returns to investors. There is no opt-in for cash dividends, and no redemption allowed before the 5 year term. Once a property is sold, the investors receive their principal amount back plus returns.
DiversyFund investors do have a 7% preferred return – meaning the owners don’t make money until you do.
What the DiversyFund Growth REIT Offers
- A long-term option that allows you to diversify from the volatile stock market.
- LOW MINIMUM INVESTMENT
- $500 minimum investment for new accounts.
- NO BROKER FEES
- Additionally, all account management fees and expenses are being waived, so they claim to be the only platform that has no fees, but understand that this is on the Fund side. There are still acquisition and development fees of 2% – 8% that vary with each project (Sponsor side). These are disclosed in the fund’s circular.
- GREAT TRACK RECORD
- Since 2017, the Growth REIT has seen between 17% and 18% average annualized returns. (automatically reinvested, no dividends are paid)
- CUSTOMER SATISFACTION
- Highly reviewed by recent investors
- Featured on Bloomberg, US News, Cheddar, and NBC
The owners have decades of experience in real estate investing, and have built an entire strategic team of qualified professionals to actively manage the portfolio’s life cycle and pursue the best results for all investors.
What Does the BBB Have to Say?
DiversyFund has been previously rated with the BBB. The BBB is currently updating the status of DiversyFund. When it is available, I will update this post. If you want to check now for an updated status, you can visit the BBB’s website.
Through my research, I was able to find that one of the owners of DiversyFund, Craig Cecilio, owned a previous investment company, CCFG. The reviews of CCFG were not good by investors or employees.
However, the reviews of DiversyFund are high among both investors and employees, even receiving 4 and 5 stars on Glassdoor. Their current Google rating is at 4.9 stars. It appears as though a change in business, business direction, vision, and partners has finally brought Craig’s business around to the entity that he was previously trying to create.
DiversyFund is receiving great reviews, seeing great profits, projecting great annualized returns to investors, and continues to grow through smart property acquisitions.
The PROS and CONS
Overall, we found the DiversyFund website to be very informative, and the process of setting up an account very easy. What’s not easy to find are the actual expected fees, which can be up to 8% for acquisition and development. Again, review the current circular before investing.
- $500 Start up Investment with the Growth REIT
- Currently No Broker or Account Fees (but there are still development fees!)
- Higher than average Annual Returns
- Great reviews by both employees and investors
- No regular distributions or fast liquidity. No cash dividends or early Redemption Plan. Think of it as loaning them money to purchase and increase value of a property, then receiving your principal back with interest after a 5-year period.
- It’s a young fund. Two great years doesn’t guarantee that future years will see the same results. However, that’s the risk with all investments, all the time.
- Not as transparent as desired in regards to fees. You shouldn’t claim to have no fees, when there are in fact fees involved, just not on the fund side.
How Do You Become an Investor?
You Can Get Started in 4 Easy Steps:
- Create a Free Account
- Fill out the new account sign up form with your
- full name
- phone number
- email address
- You can alternatively login with your Facebook or LinkedIn account
- Fill out the new account sign up form with your
- Browse Available Investments
- Growth REIT – The newbie or small (non-accredited) investor option ($500 minimum)
- Series A Round – High dollar (accredited) investor option ($25,000 minimum)
- Make Your Investment
- Select your investment amount
- Monitor Your Investment
- Inspect every property in your portfolio, whenever you want, with 24 / 7 access
- Use the DiversyFund Dashboard to see your current account overview
- Receive quarterly investment reports
- Receive annual tax statements
* Disclaimer – BYIO is not providing investment advice. BYIO is not promising a return on your investment. BYIO suggests you consult with your financial professional, or make sound judgment on your own, when debating investing in DiversyFund or any other investment platform. We’ll keep sharing what information we have, and we hope you make a lot of money!
Some DiversyFund FAQ’s
1. Can I invest more than the minimum $500 when I open a new account?
Yes, of course. You can choose your initial investment amount as long as it is above the minimum required amount. High dollar investors will need to know the SEC rules of an accredited investor.
2. Who should consider investing in DiversyFund?
Ideally, anyone who is in good financial standing (no outstanding debt), is already utilizing other favorable investment strategies such as an employer-matched 401K, and has a little savings to distribute to an alternative investment.
3. Who should NOT consider investing in DiversyFund?
Anyone with outstanding debt, little or no retirement funds, low cash reserves, etc. You should not let any investment opportunity put strain on your pocket book or family. If $500 feels like a lot of money to deduct from the checking or savings account, then you probably want to keep it in there.
Also, remember this is a long-term investment, with a term of 5 years.
This type of investment falls more into the lines of “creating additional streams of income.” You look here when you have some extra money you want to put to good work.
4. Can I contact somebody at DiversyFund if I have a question?
Yes. Here is their Contact Information:
Address: 750 B St Suite 1930, San Diego, CA 92101
Phone Number: (858) 430-8528
You can also find them on these social media platforms:
Facebook | Twitter | Instagram | YouTube | LinkedIn
Who are DiversyFund’s Competitors?
Click to read our Fundrise Review. Minimum initial investment is also $500.
Click to read our Realty Mogul Review. Minimum initial investment is $5,000.
Click to read our Streitwise Review. Minimum initial investment is $1,000 – and check out their early Redemption Plan.
Click to read our CrowdStreet Review. ACCREDITED INVESTORS ONLY. Minimum initial investment is $25,000.
Click to read our Rich Uncles Review. No minimum initial investment required.
To name a few. This list could go on and on. So, if real estate is your current focus, there are many more companies to research! We’ll keep providing the reviews, and we hope you find the right company to invest your money in real estate.
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