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Real estate has always been an important asset class and should be part of every investor’s portfolio. You can earn rental income and benefit from property appreciation. However, entering the real estate market is associated with many roadblocks. Access has been difficult for retail investors in the past.
Crowdfunding platforms are effectively changing the way people invest in real estate. And this is where Arrived comes into play. Their entire platform and process are simplified to make real estate investing accessible to everyone at low costs.
In this Arrived review, we’ll take a deeper look into how you can invest in rental homes on the platform, the available features, and what fees you can expect. In addition, we show you the pros and cons and who the platform is best suited for.
Bottom Line: Arrived is a real estate investment platform where users can invest in fractional shares of income-producing rental homes. Arrived manages the properties on behalf of its customers and enables investors to collect net rental income and a share of the home’s appreciation.
|Features and tools
|Ease of use
What Is Arrived?
Arrived is an online crowdfunding real estate platform. Their goal is to make it easier for everyday investors to invest in single-family homes and collect dividend payments from rental properties. The company also takes care of everything else, like finding tenants or handling maintenance needs.
Arrived is backed by world-class investors such as Jeff Bezos (Amazon), Marc Benioff (Salesforce), and Dara Khosrowshahi (Uber), among others. With just $100, you can embark on your real estate investment journey on the platform.
How Does Arrived Work?
If you want to buy shares of rental homes on Arrived, you can do so by going through a simple four-step process on the platform. That way, you can buy shares immediately and earn income right away.
- Browse properties: You start by browsing available rental homes that have already been pre-vetted by Arrived and are open for new investors.
- Select a property: Once you have found a property you want to invest in, you determine how much money you want to spend to buy shares.
- Invest in a property: Next, you check the terms, sign the contract, and fund the investment by linking your bank account.
- Earn income & appreciation: Now, you can earn rental income and participate in the property’s value appreciation.
Arrived Homes strives to make their investment platform as accessible as possible with low minimum deposits of $100 per property. However, according to Arrived’s FAQ portal, most investors spend closer to $3,200 on their first deal.
Requirements to Open an Account
American investors over the age of 18 — regardless of whether they have an accredited or non-accredited status — are free to sign up for Arrived Homes.
To create an account on Arrived’s website, you only need to supply some know-your-customer (KYC) information like an email address and legal name, as well as create a password.
How to Open an Arrived Account
To open an account with Arrived, click on the Sign-Up button in the website’s top right corner. The process takes barely two minutes and only requires you to create an account with your email address and a password. You then provide your name and agree to the company’s terms of service.
Now, you can explore the listings on the website. If there are no homes available for investment, you can reserve shares and be notified. Besides, linking your bank account is only necessary if you invest in a rental home.
Arrived offers many interesting features for beginner and experienced real estate investors. Find out more below:
|Sourcing fee: 3.5% to 5.0% of the property purchase price, and AUM fee: 0.15% of the property purchase price (quarterly)
|Between 6% to 12%
|5 to 7 years
|Single-family rental properties
|Taxable and Self-directed IRA
|Phone (+1 814 277 4883) and Email ([email protected])
On the Arrived marketplace, you will find available and funded rental homes as well as additional information about them. This includes general data on the house, its purchase price, and monthly rent.
Moreover, you will find an independent valuation report for the property, a market overview, financing data, and real estate price trends for the area. Offer details and a financial breakdown of the property complete the section.
Low Minimum Investment
All you need to invest on the platform is $100. Compared to the typically high investment minimums of $25,000 and more, this is a game-changer for retail investors and allows them to add real estate to their portfolios.
Earn Rental Income
By investing with Arrived, you essentially buy shares of single-family rental properties. Once your share ownership is complete, you will earn your share of passive income in the form of quarterly dividends from the tenants’ rent payments.
As you are a co-owner of the property, you are entitled to any property appreciation that occurs over time. Once the company sells the property (or you sell your shares), you get your returns according to the amount invested. However, appreciation can’t be guaranteed.
No Personal Liability
With Arrived, you also don’t have to worry about personal liability. To fractionalize homes into shares and offer them to investors, the company has to create an LLC structure for every property. This structure protects investors from personal liability, such as lawsuits or accidents that occur on the property.
Investing in real estate means that you typically invest for the long run and only use the money you don’t need in the foreseeable future. While each property has a particular hold period, most investment timelines are up to 10 years. In the case of Arrived, the estimated hold period sits somewhere between 5 to 7 years.
Cash Flow Distributions
Within this period, the company distributes its Free Cash Flow as dividend payments. Free Cash Flow is considered the net income generated by a rental property plus changes in working capital, depreciation, and amortization minus the expenditures for the property. Arrived distributes this Free Cash Flow every quarter if the distribution amount is at least $5 per investor.
Before being listed on the platform’s marketplace, all properties must undergo a thorough and rigorous vetting process conducted by the acquisitions team.
They start by identifying the most lucrative markets and circling in on the best neighborhoods. Then, the team develops the ideal purchasing criteria, sources deals to find gems, and makes the right offer.
After that, Arrived focuses on managing the rental properties efficiently for its investors.
In its Learn section, Arrived has a real estate investing guide and a blog that keeps users up to speed with the industry and Arrived. The available articles can be a good starting point for beginner investors to learn more about the topic in general.
Arrived Single Family Residential Fund
Arrived markets its Single Family Residential Fund as the “REIT of the future.” This privately managed fund gives investors access to various single-family properties in Arrived’s portfolio, which helps users enjoy a diverse array of assets in one financial vehicle.
Although Arrived views this fund as a long-term strategy, it lets investors redeem their shares early for a percentage. After six months, investors in the Single Family Residential Fund can redeem their shares for a fee of 2%.
This penalty drops to 1% between 1 and 5 years after the initial investment, and Arrived waives this fee if you redeem after holding shares for five years. Arrived also charges a 0.25% quarterly fee for asset management, as well as potential extra fees for activities such as closing, renovations, and legal.
Although Arrived is a relatively new platform, it boasts over $123 million in properties under management in over 58 markets. In terms of average returns for investors, Arrived advertises the following average annual rates for its properties:
- Single-family residential: 6% – 10% without leverage; 7% – 12% with leverage
- Vacation rentals: 5.5% – 12% without leverage; 6% – 15% with leverage
Keep in mind that Arrived expects investors to hold single-family residences for 5 – 7 years and vacation rentals for 5 – 15 years.
Arrived has two fees investors should be aware of. The first fee is an asset-under-management (AUM) fee, which is 0.15% of the property purchase price (quarterly). The fee is paid out of the income distributions from each property.
In addition, the platform charges a one-time sourcing fee, which they call “proceeds to arrive” on the offering page. This fee varies by property type as follows:
- Long-Term Rentals Sourcing Fee: 3.5% of the property purchase price
- Vacation Rentals Sourcing Fee: 5.0% of the property price
Arrived only collects the data investors provide them with when creating an account, contacting the company, or using their services. Their data won’t be sold or shared with anyone unless it’s necessary to provide a service or complete a transaction.
An example would be the payment provider Plaid. Arrived uses Plaid to gather your data from financial institutions and ensure secure transactions to fund your investments.
Arrived Customer Service
If you want to contact Arrived, you have various options to do so. You can get in touch either by calling them via phone or emailing the customer support team. Moreover, you can use the chat function to send a message or schedule a call with their team.
Besides, you can connect with Arrived on many social media outlets like Facebook, Twitter, Instagram, and LinkedIn.
Arrived Ease of Use
The Arrived website has an intuitive layout, making signing up, reviewing different property opportunities, and selecting a deal easy.
Plus, Arrived launched a mobile app for iOS devices to make it possible to manage a portfolio on an Apple device. There are over 100 reviews for the Arrived app on the App Store and a 4.6-star average.
Speaking of reviews, Arrived has a sterling rating on its official Better Business Bureau (BBB) page, with an average score of 5 stars, formal BBB accreditation, and an A+ ranking. Arrived also has a decent 3.7-star average rating on Trustpilot, but there aren’t many reviews on this website.
Arrived Pros Explained
- Low minimum investment of just $100: Arrived has one of the lowest minimum deposits for a crowdfunding real estate site, making it highly accessible for new investors. Even if people don’t have much investable capital, they can begin dollar-cost averaging into properties they like with only $100.
- Diversification is easy to achieve: There are many products available through Arrived’s platform to diversify between property types and geographical areas. Plus, with products like the Single Family Residential Fund, adding a professionally managed diversified portfolio to your Arrived account is straightforward.
- The platform is open to all investors: Don’t worry about meeting the high standards for accredited investor status. Arrived allows all non-accredited American adults to put their money to work on its crowdfunding platform.
- Rental income can be earned through quarterly dividends: While price appreciation is a significant reason people invest in real estate, this opportunity is also fantastic for those who prefer consistent cash flows. As an Arrived shareholder, you get access to regular dividend payouts from tenants directly to your account, providing you with a solid passive income strategy.
- Easy to use platform: The Arrived website is easy to navigate and ranks highly on sites like the BBB. Plus, thanks to Arrived’s new iOS app, people with iPhones have another simple way to monitor their properties.
- Professional property management: The Arrived team has decades of combined experience in real estate and tech at some of the world’s largest firms. A few companies Arrived’s executives worked for include Microsoft, Goldman Sachs, and American Homes. Plus, don’t forget major CEOs like Amazon’s Jeff Bezos, Salesforce’s Marc Benioff, and Uber’s Dara Khosrowshahi back Arrived Homes.
- Protection from personal liability: Arrived keeps a substantial amount of cash in reserve for each of their properties to protect investors from losses. Also, Arrived uses its LLC structure on each of its investments, which helps protect people investing on the platform in case a costly lawsuit emerges.
- Thorough vetting process: To avoid legal hassles and provide the optimal deals for their clients, Arrived has a rigorous screening process for every property they add to their platform. Plus, thanks to this website’s transparent design, it’s easy to review all of Arrived’s data for each deal.
- Good educational resources for real estate investors: The Learning Center on Arrived’s website has a plethora of articles and resources covering topics like the latest trends in real estate, Arrived’s recent performance, and new features on the platform. Users can find answers to their questions either in this Learn tab or the well-maintained FAQ portal.
Arrived Cons Explained
- Limited liquidity with hold periods between five and seven years: While there are ways to sell property shares before the five-year mark, it’s strongly recommended that Arrived investors have a long time horizon. The only way to guarantee you won’t pay penalties for early withdrawal is to hold for five years.
- Share redemption isn’t guaranteed: Related to the last point, there are no guarantees that Arrived will liquidate your shares even if you request a withdrawal. The real estate market is traditionally illiquid, and there may not be enough buyers on the other end to complete a quarterly transfer.
- Fees reduce your income: Arrived charges multiple fees for sourcing, management, and closing, depending on the type of investment you’re involved in. Investors need to factor these average costs (plus taxes) into their Arrived investment to fully understand their expected returns.
While Arrived makes it simple and easy to invest in single-family rental homes, other options also have low minimums and exciting features. Therefore, we added two alternatives to consider:
Arrived vs. Fundrise
A very popular real estate crowdfunding investment platform is Fundrise. Like Arrived, Fundrise is also open to retail investors. However, you will not buy shares of a single rental property but in diversified portfolios that consist of residential and commercial real estate.
Looking at the fees, Arrived has an AUM fee of 0.15% of the purchase price (quarterly) compared to Fundrise’s annual AUM fee of 1%. There are no other fees such as a sourcing fee or a property management fee with Fundrise.
Moreover, the investment minimum is a measly $10, which is even less than the $100 you need for Arrived. Read our full Fundrise review to learn more.
Arrived vs. Roofstock
The second alternative for retail investors looking to invest in single-family properties is Roofstock. However, the platform doesn’t have an exact investment minimum as investors will buy the entire home instead of shares of the property.
Besides, investors can invest in custom portfolios similar to private REITs you might know from other platforms.
While the basic idea of browsing the available listings, deciding on a property, and earning rental income is the same, the approach is entirely different. This is also evident in the fee structure. After your offer has been accepted, Roofstock charges a fee of 0.5% of the purchase price or $500, whichever is higher.
Additional benefits are reselling the property on the platform and putting your money in a 1031 exchange. Read our full Roofstock review to learn more.
|Source fee: varies by property type, AUM fee: 0.15% of the property purchase price (quarterly)
|Source fee: varies by property, annual management fee: 1%, and property management fee: 8%
|1.0% per year
|Advisory fee waived (*12 months)
|Invest in fractional shares of quality rental homes
|Invest in real estate with single-family rentals
|Access to private real estate deals
|Long term investors
|Long term investors
|Long term investors
Who Is Arrived Best For?
Arrived is perfect for non-accredited investors as they usually are excluded from many other real estate crowdfunding platforms. Moreover, the low investment minimum of just $100 will be incredibly helpful for beginner investors and investors with small account balances.
Arrived is also suitable for people who want to invest in single-family rental properties but don’t want to buy the entire home or deal with the operational headaches that come with homeownership.
Residential properties are especially great for investors looking for passive income streams from rental payments and appreciation.
Arrived Review FAQ
Although this review has covered the most essential aspects of Arrived, we understand that you might have additional questions regarding the company’s offering. That’s why we collected frequently asked questions and provided answers to them.
Is Arrived Safe?
Investing in real estate is never 100% safe because you always have to face the risk of losing money on an investment. However, all investment offerings on the platform are SEC-approved and can therefore be considered safe.
In addition, the platform conducts a thorough and rigorous vetting process. They also have cash reserves for every property. Thanks to the LLC structure of each property, investors are also protected against personal liability, such as ugly and expensive lawsuits.
Who Can Invest with Arrived?
At the moment, all U.S. residents who are 18 years old and older can participate on the platform.
In addition, they don’t have to be accredited investors to invest with Arrived and may even use certain entities or self-direct IRA and retirement accounts.
Is Arrived a REIT?
Real estate investment trusts (REITs) own real estate assets. Available shares can be purchased and sold publicly on stock exchanges.
Therefore, Arrived itself isn’t a REIT, but each property on the platform is. Thus, although the shares are not publicly traded, they qualify to be taxed as REITs and offer the same tax benefits as publicly traded REITs.
Who Has Legal Ownership of a House with Arrived?
As soon as you invest in shares of an Arrived property, you buy direct ownership in the LLC that owns the asset. For example, buying 5% of the shares would entitle you to 5% of the interest, including rental income and property appreciation.
How Does Arrived Make Money?
Arrived has multiple income streams.
The first is agent rebates, which the company collects from the property’s original seller when buying the house.
The second stream is the sourcing fee charged for the “work involved with sourcing the property and preparing it for investment.”
Finally, there is an asset management fee of 0.15% of the property purchase price (quarterly).
Can I Sell My Investment Before My Holding Period Ends with Arrived?
The property offerings are designed for investors who want to invest for at least five to seven years. Still, plans can change in an instant, and investors might need to liquidate earlier than expected.
In that case, you must ask Arrived for an early redemption, which could result in penalties. Plus, redemptions can’t be guaranteed, and a secondary market has not yet been established.
Is it Possible to Do a 1031 Exchange with Arrived?
1031 exchanges exist for those investors who want to defer all their capital gains taxes by reinvesting the proceeds from the sale in new properties.
These new properties must have the same or a higher value than the sold one. Unfortunately, 1031 exchanges into or out of the platform’s offerings are not possible.
In A Nutshell
- Minimum Investment: $100
- Fees: AUM fee: 0.15% of the property purchase price (quarterly), and sourcing fee: varies by property type
- Promotion: None
on Arrived’s website
With as little as $100, you can invest with Arrived and diversify your portfolio. Whether you are a complete beginner or a seasoned pro, you will benefit from the advantages real estate has to offer.
Plus, you don’t have to think about the hassle of renting the place out or taking care of maintenance needs. Instead, you sit back and let the dividends flow in.
The vetting process is rigorous, the investment returns are solid, and the pricing structure is transparent. However, it is worth mentioning that the flow of properties to invest in is relatively limited.
Still, Arrived can be a great starting point for investors who want to get into real estate and can’t — or simply don’t want to — spend $25,000+ on a single investment.
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Carsten is a Freelance Copywriter with a personal interest in money management and investing. Besides taking care of his investments, he loves traveling, reading books, and working out (calisthenics & yoga).