Real estate investing online is an easy way to diversify your portfolio, and with all of the low investment platforms available today, you can get started quickly with relatively little money. In fact, Rich Uncles doesn’t have a minimum investment requirement, so fans of the platform gush about building their real estate empire $5 at a time. But, is it the best option?
In addition to sharing what unique traits this company has to offer, and historical funds data, this review will provide the most up-to-date BBB rating and need-to-know factors so you can determine if it’s a good fit for your portfolio and your wallet.
What is Rich Uncles? (Review) Is it really for Everyone?
My Rich Uncles QUICK-LOOK Review
Company Name: Rich Uncles
Company Website: https://www.richuncles.com
Founder: Raymond Wirta and Harold Hofer
Minimum Investment: no minimum investment amount specified
Investment Term: 3+ years (Share Repurchase Program info below)
Account Fees: not disclosed on the company website, must review the individual Prospectuses for various account fees
Annual Yield: 6% and 7% (2 REITs)
Property Types: locations with above average concentrations of younger demographic profiles; single-tenant offices, industrial, retail, student-housing, multi-family housing, quick-service restaurants, convenience stores, and fitness centers with cash flow
Accolades: The Adam Corolla Show – Adam Corolla has also provided an investor review on Rich Uncles website
As Heard On: other shows such as The Dan Patrick Show, The Sean Hannity Show, The Big Podcast with Shaq, and more
Compare your REIT options. Looking for a higher annualized yield? Read this article: What is stREITwise (Review) Should You Invest?
My Rich Uncles FULL Review
About Rich Uncles
In 2006, Uncle Ray had the idea that real estate investing should, and could, be made available to everyone. After the law changes in 2012 that ignited the startup of several online crowdfunded real estate investment companies, Rich Uncles was launched with a strategy to make real estate investing easier and less expensive for all investors.
The Rich Uncles REIT Plan Options
An Affordable Way to Get into Real Estate:
What used to be an investment only obtainable by the wealthy, has become an option for everyone. By using crowdfunding to raise capital for real estate investments, companies have opened the doors to anyone interested in diversifying their portfolio with commercial real estate properties.
The Details on the Rich Uncles REITs:
According to their website, Rich Uncles has an acquisition strategy that involves a team who evaluates 1000 or more properties per week, with about .3% of them qualifying to be considered for a deal. With this method, they aim to carefully select only the highest quality options to add to their portfolios.
There are currently 2 REIT Plans to choose from:
1. The BRIX REIT
- Currently comprised of 6 properties including a Starbucks, a 24 hr Fitness, and 4 student housing buildings
- Estimated Annualized Dividend: 6%
2. The NNN REIT
- Currently comprised of 26 properties including Walgreens, 3M, Harley Davidson, Dollar General, 24 hr Fitness, Costco, several other office buildings, a storage facility, and several hotels
- Estimated Annualized Dividend: 7%
Account Minimum Investments:
There is no minimum investment amount specified. The Prospectus for the BRIX REIT states that there is no minimum amount required to become an investor.
The Potential Return:
The average annualized return of the BRIX REIT since inception has been 6%, and is estimated to remain at 6%.
The average annualized return of the NNN REIT since inception has been 7%, and is estimated to remain at 7%.
Click to view all of the REIT Circulars for SEC filed information.
Must-know Investment Information:
Any investment made in real estate is meant to be a long-term investment, unless you decide to try your hand at flipping. Online platforms are no different. These are designed primarily to provide cash dividends and, eventually, the return of your investment at the end of the term.
However, if a situation should arise that demands the need to get your money back prior to the end of the investment term, Rich Uncles offers a Share Repurchase Program.
The Share Repurchase Program:
- First 90 Days – Blocked. NO redemption requests will be accepted.
- 90 Days to 1 yr – 97%
- 1 yr to 2 yrs – 98%
- 2 yrs to 3 yrs – 99%
- Over 3 yrs – 100%
The remaining percentage is retained as an administration fee. All shares repurchased will depend on the availability of cash flow. So, upon request, you may receive a partial or a full buy back amount. If you receive a partial amount, you will continue to receive partial amounts until all of your shares have been repurchased.
This repurchase program structure is typical of online real estate companies that offer one – and not all companies do.
The Merger of September 2019
When you visit the Rich Uncle’s website, you may notice that they’ve “got exciting news to share!”
Upon reading the linked article, you will learn that just over one month ago, RW Holdings NNN REIT, Inc. (“NNN REIT”) and Rich Uncles Real Estate Investment Trust I (“REIT I”) entered into a merger agreement whereby NNN REIT will acquire REIT I.
Additionally, a contribution agreement has been made for BrixInvest (the REIT Sponsor and Manager) to contribute all of its assets to NNN REIT’s Operating Partnership (“NNN OP”).
These two events are meant to “create the largest real estate crowdfunded equity REIT with over $450 million in real estate assets under management and the first FinTech real estate crowdfunding platform to be wholly owned by its own investors.” (quoted from prnewswire.com – click to read the full article)
The merger will increase the number of properties in the NNN REIT portfolio from 26 to 45 properties.
Approval of the merger and of the closing transactions are estimated to occur in late 2019 or early 2020.
What does this mean for investors?
According to the same article, it means…
- new access to a very large diversified non-traded REIT
- no advisory or management fees to external managers
- direct ownership of one of the most successful FinTech real estate crowdfunding platforms
What the Rich Uncles REITs have to Offer
- an alternative investment option to the volatile stock market, with historically higher return potential and inflation protection
- LOW MINIMUM INVESTMENT
- No minimum initial investment amount required
- NO BROKER FEES
- No fees are disclosed on the website. You must review the individual Prospectuses for various account fees
- PROFITABLE TRACK RECORD
- They have been profitable and have paid out monthly dividends since inception
- CUSTOMER SATISFACTION
- 5 stars by investors on BBB, 4.7 stars on Google, and 4.4 stars on Facebook
What Does the BBB Have to Say?
Rich Uncles has been filed and Accredited with the BBB since 2014 with an A+ Rating.
BBB site customer reviews express 5-star response with confidence in the management of funds, company communication, and delivery of monthly dividends when advertised.
The PROS and CONS
Overall, I found the Rich Uncles website to leave investors with more questions than answers.
There are 4 main questions that people want answered when first viewing an online investment platform:
1. What are the investments offered, and what are the historical / expected returns?
2. What is the necessary initial investment amount?
3. What are the terms of the investments?
4. What are the associated account fees?
While the first question is answered clearly, the other three are not stated anywhere on their website.
The only information offered for either REIT is the property list and expected annual return. In order to get more information, you have to click on “Learn More” and create a Login.
As it is not my intention to do business with every company I review, I did not complete the requested Login to receive additional information.
Instead, I clicked on the “Do you have a question?” box at the bottom of the page, which offers the option to send a message or chat… neither of which were functional.
Also, they mention a Share Repurchase Program, then fail to disclose any details on the website. You have to find them in the Prospectus.
The answers to the questions above are not even offered in the FAQ’s.
To me, this is not a new customer friendly website. There is far too much digging required to find important information that is readily accessible for viewing on every other online real estate platform that we’ve reviewed.
- A+ BBB Rating with Accredited status
- Lowest initial investment available as there is no minimum requirement
- Historically paid monthly dividends
- Share Repurchase Program available for early redemptions
- Not new investor friendly. Transparency only through SEC filed documents is not a “user-friendly” experience. They fail to offer basic funds and investor information on their website.
- According to the latest NNN REIT Prospectus, the Company intends to do what is necessary to uphold their REIT status, and intends to continue paying out dividends. However, the dividends are considerably lower than a lot of competitors (such as stREITwise)
How Do You Become a Rich Uncles Investor?
Good Question. We know you need to create a Login. But, until you do, the rest is apparently a secret.
1. Create a new Login
- Full Name
- Email Address
- Phone Number
- How did you hear about Rich Uncles?
If the process is consistent with other platforms, you would then select your investment type, enter your investment amount, sign the appropriate documents, and voila! You’re in.
Getting started is usually an easy process, but it’s nice to see the steps explained prior to creating an account – especially for a new investor.
* 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 Rich Uncles or any other online investment company. We’ll keep sharing what information we have, and we hope you make a lot of money!
Some Rich Uncles FAQ’s
1. Why Rich Uncles?
It seems the main attraction is the lack of a required minimum initial investment. The BRIX REIT circular states that an investor may complete and sign an investor form and subscription agreement with a stated amount of share with no minimum subscription amount. So, they offer the lowest barrier to entry.
2. Can I reinvest my dividends?
Yes, you can opt-in to automatically reinvest any dividends instead of receiving cash distributions.
3. What if I need my money back early?
There is a Share Repurchase Program in place. As detailed above, if you request a refund prior to 3 yrs, you will pay an administration fee. You should understand that you may not get your full amount back at one time.
4. What other info would be helpful in choosing a platform?
- Can you invest in more than one fund / REIT at a time (on the same platform)?
- Can you make additional investments? Is there an auto-invest option?
5. Can I contact somebody at Rich Uncles if I have a question before investing?
Yes. Here is their Contact Information:
Address: 3090 Bristol St Ste 550, Costa Mesa, CA 92626
Phone Number: (855) 742-4862
You can also find them on these social media platforms:
Facebook | LinkedIn
Who are Rich Uncle’s Competitors?
Click to read our DiversyFund Review. Minimum initial investment of $500, but no early redemption plan.
Click to read our Realty Mogul Review. Minimum initial investment of $5,000.
Click to read our stREITwise Review. Minimum initial investment of $1,000 and they offer an early Redemption Plan.
Click to read our Fundrise Review. Minimum initial investment is $500.
Click to read our CrowdStreet Review. ACCREDITED INVESTORS ONLY. Minimum initial investment is $25,000.
There are many real estate crowdfunding companies available to choose from. We’ll keep reviewing, and updating as necessary. We hope you find the right company to meet your goals!
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