Ever wish you could invest in real estate without committing money for years at a time?
If so, newcomer Concreit is for you.
Unlike most real estate crowdfunding platforms, Concreit lets you pull out your money at virtually any time. And no, they don’t ding your principal investment with fees.
But the differences don’t end there. Here’s what you need to know before investing in Concreit.
Concreit at a Glance
Minimum Investment: $1
Prospective Returns: 5.5% annual dividend (net of fees)
Fees:
-
- Withdrawal Fee: 0.1% for ACH
- Early Withdrawal Fee: 20% of your dividend in Year 1
- Annual Asset Management Fee: 1% of balance (accounted for in the dividend yield)
My Take: Concreit offers better liquidity than any other real estate crowdfunding investment, hands down. But the 5.5% dividend yield looks modest compared to Concreit’s competitors offering longer-term investments.
Concreit Review: Key Features
Founded in Seattle in late 2018 by Jordan Levy and Sean Hsieh, Concreit lets you invest money in a pooled real estate fund through their mobile app. It’s an entirely passive investment, requiring no work on your part.
But before you invest, make sure you understand exactly how Concreit works.
Fractional Real Estate Investing in Loans
Concreit owns and manages a pooled fund of real estate-secured loans. As of April 2022, Concreit’s fund owns over 150 loans across the US, the majority of which are secured against properties in the Pacific Northwest.
But these loans aren’t your typical home mortgages, or even rental property loans. Concreit invests mostly in short-term loans, including:
-
- New construction projects
- Refinance and bridge loans
- Light renovation loans
- Heavy rehabilitation loans
In other words, much of their portfolio consists of hard money loans, usually purchase-rehab loans. Think of your investment as fractional real estate investing in these secured loans.
Because these loans have such short terms, it keeps Concreit’s turnover rapid, allowing them to offer such easy liquidity.
Liquidity
You can request to redeem your shares in Concreit’s fund at any time. In most cases, that means your money transfer starts almost immediately, and the cash hits your checking account within a week.
No other real estate investment allows this kind of liquidity. After all, real estate is inherently a long-term, illiquid investment.
Still, Concreit can’t guarantee a timeframe for redemptions. In rare circumstances, they may not have enough cash in their reserve to cover your withdrawal, for example if many people request redemptions all at the same time.
That’s important to remember, as you compare Concreit’s high yield to other liquid options for storing cash, such as high-yield savings accounts. Also, note that Concreit is an investment, not an FDIC-insured bank account.
Returns
Concreit pays a fixed 5.5% annual dividend, in weekly increments.
While it’s theoretically possible that the share price — AKA net asset value or NAV — could go up in value, Concreit intentionally sets the share price at $1 to keep it simple. That fixes the minimum investment at $1: accessible for any budget, although an investment of only $1 means collecting fractions of a penny each week in dividends.
So, the 5.5% dividend is effectively the only return. Don’t count on appreciation.
But the weekly dividend distributions mean your investment compounds weekly, which is uncommonly rare and boosts your compounding returns.